PagerDuty (PD) reported mixed fiscal Q2 results and guidance as businesses reduced user licenses and tightened technology budgets, RBC Capital Markets said Thursday in a report.

Despite ongoing reductions in user volume, management sees improved performance and pricing changes as catalysts for H2 acceleration, RBC said.

"While we remain cautious on seat-based headwinds, we are encouraged by the pricing moves," RBC said.

The company's appointment of Todd McNabb as chief revenue officer is expected to strengthen the go-to-market strategy in the medium term, the report said.

RBC reduced its price target on PagerDuty stock to $18 from $20 on lower estimates and maintained its outperform rating.

PagerDuty shares rose 5.6% in recent Thursday trading.

Price: 16.47, Change: +0.88, Percent Change: +5.64