5 ms·

Using a very naive calculation of valuation = 5x yearly income, is PagerDuty really pulling in $260,000,000/year? My company is currently paying them about $90/

Using a very naive calculation of valuation = 5x yearly income, is PagerDuty really pulling in $260,000,000/year? My company is currently paying them about $90/month. or $1,080/year. We are most likely one of the smallest clients they have, but that is still quite a leap.

pbiggar 8y ago
"The company says it passed $100 million in annual recurring revenue in recent months"
- samstave 8y ago
  Assume 100MM/yr - if they have ~20K paying customers with an avg of $500/month per customer, that number is easily achievable. They will have a long-tail of free, and small clients - then a few whales and it seems completely doable... Pagerduty is a great service.
  - drb91 8y ago
    > Pagerduty is a great service. Well, they're good at alerting. They're not great at incident revie/. The interface makes it pretty difficult to look at, say, "what are all the incidents I got paged for related to this schedule". In general, the interface is pretty painful to use for large organizations. This is a fairly common theme, though....
    - spullara 8y ago
      My guess is that is where they will focus their acquisition energy.
throwaway5752 8y ago
That's not income, that's revenue/run rate. Also, your 5x revenue (while reasonable historically) is out of line with current valuations for peers. A couple of similiar public ones: Atlassian is almost 25 x ttm sales and and Zendesk is 15.
paxys 8y ago
> Using a very naive calculation of valuation = 5x yearly income How did you come up with that metric? Pretty much every company at that stage has negative income. If you mean revenue, that isn't accurate either. Even the largest tech giants are valued at ~8x annual revenue or more, and that number is higher for the SaaS sector. It is common for a smaller, fast-growing company to be valued at 15-20x ARR.

5 ms·

Using a very naive calculation of valuation = 5x yearly income, is PagerDuty really pulling in $260,000,000/year? My company is currently paying them about $90/

by NickBusey 8y ago

pbiggar 8y ago
"The company says it passed $100 million in annual recurring revenue in recent months"
- samstave 8y ago
  Assume 100MM/yr - if they have ~20K paying customers with an avg of $500/month per customer, that number is easily achievable. They will have a long-tail of free, and small clients - then a few whales and it seems completely doable... Pagerduty is a great service.
  - drb91 8y ago
    > Pagerduty is a great service. Well, they're good at alerting. They're not great at incident revie/. The interface makes it pretty difficult to look at, say, "what are all the incidents I got paged for related to this schedule". In general, the interface is pretty painful to use for large organizations. This is a fairly common theme, though....
    - spullara 8y ago
      My guess is that is where they will focus their acquisition energy.
throwaway5752 8y ago
That's not income, that's revenue/run rate. Also, your 5x revenue (while reasonable historically) is out of line with current valuations for peers. A couple of similiar public ones: Atlassian is almost 25 x ttm sales and and Zendesk is 15.
paxys 8y ago
> Using a very naive calculation of valuation = 5x yearly income How did you come up with that metric? Pretty much every company at that stage has negative income. If you mean revenue, that isn't accurate either. Even the largest tech giants are valued at ~8x annual revenue or more, and that number is higher for the SaaS sector. It is common for a smaller, fast-growing company to be valued at 15-20x ARR.