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Datadog (DDOG) Q1 Earnings Beat Estimates, Revenues Up Y/Y
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Datadog (DDOG - Free Report) reported first-quarter 2022 non-GAAP earnings of 24 cents per share, which beat the Zacks Consensus Estimate by 118.18%. The bottom line also increased from 6 cents reported in the year-ago quarter.
The company’s net revenues of $363 million surpassed the consensus mark by 7.63%. The figure increased 82.8% year over year.
Quarter Details
Steady customer additions drove the top line in the first quarter. Datadog had more than 19,800 customers at the end of the first quarter, up from 14,170 in the year-ago quarter.
Of these customers, 2,250 have an annual run rate (ARR) of $100K or more, up from 1,406 in the year-ago quarter. These customers generate about 85% of the total ARR.
As of the end of the first quarter, 81% of customers used two or more products, up from 75% in the year-ago quarter. Additionally, 35% of customers utilized four or more products, up from 25% in the year-ago quarter.
Datadog’s dollar-based retention rate was above 130% in the first-quarter, driven by increased usage and adoption of existing and new products.
In the first quarter, Datadog’s adjusted gross margin increased 330 basis points (bps) on a year-over-year basis to 80.4%.
Research & development expenses increased 67.1% on a year-over-year basis to $102.6 million, driven by increased investments in Datadog’s platform. Research & development, as a percentage of revenues, contracted 270 bps to 28.3%.
Sales and marketing expenses increased 51.8% year over year to $85.3million. Sales and marketing expenses, as a percentage of revenues, declined 480 bps to 23.5%.
General & administrative expenses were up year over year by 27%, reaching $20.2 million in the reported quarter. General & administrative expenses, as a percentage of revenues, contracted 240 bps to 5.6%.
Datadog reported a non-GAAP operating income of $84 million compared with $20 million in the year-ago quarter.
Balance Sheet & Cash Flow
As of Mar 31, 2022, Datadog had cash, cash equivalents and marketable securities of $1.7 billion compared with $1.6 billion as of Dec 31, 2021.
Operating cash flow was $147 million in the reported quarter, up from $116 million reported in the previous quarter.
Free cash flow during the quarter was $130 million compared with $107 million in the prior quarter.
Guidance
For the second quarter of 2022, Datadog anticipates revenues between $376 million and $380 million. The Zacks Consensus Estimate for the same is pegged at $361.27 million.
Non-GAAP earnings are expected to be 13-15 cents per share. The consensus mark for earnings is pegged at 11 cents per share.
Non-GAAP operating income is expected in the range of $49 million to $53 million.
For 2022, Datadog anticipates revenues between $1.60 billion and $1.61 billion. The Zacks Consensus Estimate for the same is pegged at $1.52 billion
Non-GAAP earnings are expected to be between 70 cents and 77 cents. The Zacks Consensus Estimate for earnings stands at 49 cents per share.
Non-GAAP operating income is expected in the range of $240 million to $260 million.
Post Quarter Highlights
In April, Datadog launched its Application Security Monitoring (ASM) product. This product helps in breaking down silos by leveraging distributed tracing to accurately identify OWASP threats targeting code-level vulnerabilities in web applications and APIs.
Datadog also announced the availability of two capabilities for its AI engine, Watchdog, namely Log Anomaly Detection and Root Cause Analysis. These capabilities will help engineers understand and detect patterns and abnormalities in data volumes and also identify issues across an organization’s services.
Zacks Rank & Stocks to Consider
Currently, Datadog carries a Zacks Rank #3 (Hold).
Datadog’s shares have declined 33.2% compared with the Zacks Computer and Technology sector’s fall of 22.9% in the year-to-date period.
Analog Devices’ shares have outperformed the sector in the year-to-date period, declining 5.8%. The company is set to announce second-quarter 2022 results on May 18.
BWX Technologies shares have outperformed the sector in the year-to-date period, returning 10%. The company is set to announce first-quarter 2022 results on May 9.
Camtek shares have underperformed the sector in the year-to-date period, declining 32.2%. The company is scheduled to release first-quarter 2022 results on May 12.
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Datadog (DDOG) Q1 Earnings Beat Estimates, Revenues Up Y/Y
Datadog (DDOG - Free Report) reported first-quarter 2022 non-GAAP earnings of 24 cents per share, which beat the Zacks Consensus Estimate by 118.18%. The bottom line also increased from 6 cents reported in the year-ago quarter.
The company’s net revenues of $363 million surpassed the consensus mark by 7.63%. The figure increased 82.8% year over year.
Quarter Details
Steady customer additions drove the top line in the first quarter. Datadog had more than 19,800 customers at the end of the first quarter, up from 14,170 in the year-ago quarter.
Of these customers, 2,250 have an annual run rate (ARR) of $100K or more, up from 1,406 in the year-ago quarter. These customers generate about 85% of the total ARR.
As of the end of the first quarter, 81% of customers used two or more products, up from 75% in the year-ago quarter. Additionally, 35% of customers utilized four or more products, up from 25% in the year-ago quarter.
Datadog’s dollar-based retention rate was above 130% in the first-quarter, driven by increased usage and adoption of existing and new products.
Datadog, Inc. Price, Consensus and EPS Surprise
Datadog, Inc. price-consensus-eps-surprise-chart | Datadog, Inc. Quote
Operating Details
In the first quarter, Datadog’s adjusted gross margin increased 330 basis points (bps) on a year-over-year basis to 80.4%.
Research & development expenses increased 67.1% on a year-over-year basis to $102.6 million, driven by increased investments in Datadog’s platform. Research & development, as a percentage of revenues, contracted 270 bps to 28.3%.
Sales and marketing expenses increased 51.8% year over year to $85.3million. Sales and marketing expenses, as a percentage of revenues, declined 480 bps to 23.5%.
General & administrative expenses were up year over year by 27%, reaching $20.2 million in the reported quarter. General & administrative expenses, as a percentage of revenues, contracted 240 bps to 5.6%.
Datadog reported a non-GAAP operating income of $84 million compared with $20 million in the year-ago quarter.
Balance Sheet & Cash Flow
As of Mar 31, 2022, Datadog had cash, cash equivalents and marketable securities of $1.7 billion compared with $1.6 billion as of Dec 31, 2021.
Operating cash flow was $147 million in the reported quarter, up from $116 million reported in the previous quarter.
Free cash flow during the quarter was $130 million compared with $107 million in the prior quarter.
Guidance
For the second quarter of 2022, Datadog anticipates revenues between $376 million and $380 million. The Zacks Consensus Estimate for the same is pegged at $361.27 million.
Non-GAAP earnings are expected to be 13-15 cents per share. The consensus mark for earnings is pegged at 11 cents per share.
Non-GAAP operating income is expected in the range of $49 million to $53 million.
For 2022, Datadog anticipates revenues between $1.60 billion and $1.61 billion. The Zacks Consensus Estimate for the same is pegged at $1.52 billion
Non-GAAP earnings are expected to be between 70 cents and 77 cents. The Zacks Consensus Estimate for earnings stands at 49 cents per share.
Non-GAAP operating income is expected in the range of $240 million to $260 million.
Post Quarter Highlights
In April, Datadog launched its Application Security Monitoring (ASM) product. This product helps in breaking down silos by leveraging distributed tracing to accurately identify OWASP threats targeting code-level vulnerabilities in web applications and APIs.
Datadog also announced the availability of two capabilities for its AI engine, Watchdog, namely Log Anomaly Detection and Root Cause Analysis. These capabilities will help engineers understand and detect patterns and abnormalities in data volumes and also identify issues across an organization’s services.
Zacks Rank & Stocks to Consider
Currently, Datadog carries a Zacks Rank #3 (Hold).
Datadog’s shares have declined 33.2% compared with the Zacks Computer and Technology sector’s fall of 22.9% in the year-to-date period.
Some better-ranked stocks in the same sector are Analog Devices (ADI - Free Report) , BWX Technologies (BWXT - Free Report) and Camtek (CAMT - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Analog Devices’ shares have outperformed the sector in the year-to-date period, declining 5.8%. The company is set to announce second-quarter 2022 results on May 18.
BWX Technologies shares have outperformed the sector in the year-to-date period, returning 10%. The company is set to announce first-quarter 2022 results on May 9.
Camtek shares have underperformed the sector in the year-to-date period, declining 32.2%. The company is scheduled to release first-quarter 2022 results on May 12.