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Datadog (DDOG) to Report Q3 Earnings: What's in the Cards?

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Datadog (DDOG - Free Report) is set to release its third-quarter 2022 results on Nov 3.

For the quarter, the company expects non-GAAP earnings in the range of 15-17 cents per share. The Zacks Consensus Estimate for earnings has remained unchanged at 16 cents per share over the past 30 days, indicating growth of 23.08% from the year-ago period.

The company projects third-quarter revenues to be between $410 million and $414 million. The consensus mark for the top line is currently pegged at $412.61 million, suggesting 52.54% growth from the year-ago period.

Markedly, Datadog’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average being 97.03%.

Let’s see how things have shaped up prior to this announcement.

Factors to Consider

Datadog’s quarterly performance is likely to have benefited from increased adoption of its cloud-based monitoring and analytics platform, owing to the accelerated digital transformation and cloud migration across organizations.

Significant investments in sales and marketing to engage customers, greater brand awareness and increased adoption of its platform and products are likely to have expanded its customer base in the to-be-reported quarter.

Notably, the company ended second-quarter 2022 with 2420 customers with an ARR of more than $100K, up 54% year over year. Also, the firm’s dollar-based net retention rate remained more than 130% for the 20th consecutive quarter.

During the to-be-reported quarter, Datadog achieved Amazon Web Services (“AWS”) Security, Networking and Retail competencies that reaffirm Datadog’s commitment to AWS and its position as a global partner across multiple industries and use cases.

Besides this, Datadog also expanded monitoring for Microsoft SQL Server and Microsoft Azure database platforms, which have allowed engineers and database administrators to quickly pinpoint and address database performance issues, such as costly and slow queries, incorrect indexes in SQL Server or Azure databases and bottlenecks in their applications.

Datadog, Inc. Price and EPS Surprise

 

Key Developments

On Aug 4, Datadog acquired Seekret, a highly innovative API observability company. The addition of Seekret’s capabilities is expected to have extended Datadog’s unified platform to deliver deeper API observability, governance and automation across the entire API lifecycle.

What Our Model Indicates

According to the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

Datadog has an Earnings ESP of 0.00% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are a few companies worth considering, as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases:

ZoomInfo Technologies (ZI - Free Report) has an Earnings ESP of +1.27% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here. ZI’s shares have lost 29.6% in the year-to-date period compared with the Zacks Computer - Integrated Systems industry’s decline of 5.3%.

Tencent Music Entertainment Group (TME - Free Report) has an Earnings ESP of +4.76% and a Zacks Rank #2. TME shares have lost 46.5% in the year-to-date period compared with the Zacks Internet - Content industry’s decline of 35.6%.

Upstart (UPST - Free Report) has an Earnings ESP of +114.71% and a Zacks Rank #3. UPST shares have lost 84.3% in the year-to-date period compared with the Zacks Computers - IT Services industry’s decline of 31%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

 

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