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For the third quarter of 2023, Datadog anticipates revenues between $521 million and $525 million. The Zacks Consensus Estimate for the same is currently pegged at $523.3 million, suggesting 19.88% growth from the year-ago period.
Non-GAAP earnings are expected in the range of 33-35 cents per share. The Zacks Consensus Estimate for earnings has remained unchanged at 34 cents per share over the past 30 days, indicating growth of 47.83% from the year-ago period.
Markedly, Datadog’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 33.85%.
Let’s see how things have shaped up prior to this announcement.
Datadog’s quarterly performance is likely to have benefited from the 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, increase brand awareness and drive adoption of its platform and products are likely to have resulted in a growing customer base in the to-be-reported quarter.
In the second quarter of 2023, Datadog had about 2,990 customers with an annual run rate of $100K or more, up from 2,420 in the year-ago quarter. The Zacks Consensus Estimate is pegged at 3,140, indicating growth of 20.77% from the year-ago quarter.
As of the end of the second quarter, 82% of customers used two or more products, up from 79% in the year-ago quarter’s figure. Additionally, 45% of customers utilized four or more products, up from 37% in the year-ago quarter and 21% of customers used six or more products, up from 14% a year ago.
Datadog’s dollar-based retention rate was above 120% as customers increased their usage and adopted more products.
The company introduced new capabilities for its Cloud Cost Management product and observability space. These updates are expected to have boosted clientele growth in the to-be-reported quarter.
DDOG released 15 new integrations across the next-generation artificial intelligence (AI) stack, from GPU infrastructure providers to vector databases, model vendors and AI orchestration frameworks. This integration is expected to have boosted customer growth in the to-be-reported quarter.
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 at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are some stocks worth considering, as our model shows that these have the right combination of elements to beat on earnings this season.
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Datadog (DDOG) to Report Q3 Earnings: What's in the Cards?
Datadog (DDOG - Free Report) is set to release its third-quarter 2023 results on Nov 7.
For the third quarter of 2023, Datadog anticipates revenues between $521 million and $525 million. The Zacks Consensus Estimate for the same is currently pegged at $523.3 million, suggesting 19.88% growth from the year-ago period.
Non-GAAP earnings are expected in the range of 33-35 cents per share. The Zacks Consensus Estimate for earnings has remained unchanged at 34 cents per share over the past 30 days, indicating growth of 47.83% from the year-ago period.
Markedly, Datadog’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 33.85%.
Let’s see how things have shaped up prior to this announcement.
Datadog, Inc. Price and EPS Surprise
Datadog, Inc. price-eps-surprise | Datadog, Inc. Quote
Factors to Consider
Datadog’s quarterly performance is likely to have benefited from the 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, increase brand awareness and drive adoption of its platform and products are likely to have resulted in a growing customer base in the to-be-reported quarter.
In the second quarter of 2023, Datadog had about 2,990 customers with an annual run rate of $100K or more, up from 2,420 in the year-ago quarter. The Zacks Consensus Estimate is pegged at 3,140, indicating growth of 20.77% from the year-ago quarter.
As of the end of the second quarter, 82% of customers used two or more products, up from 79% in the year-ago quarter’s figure. Additionally, 45% of customers utilized four or more products, up from 37% in the year-ago quarter and 21% of customers used six or more products, up from 14% a year ago.
Datadog’s dollar-based retention rate was above 120% as customers increased their usage and adopted more products.
The company introduced new capabilities for its Cloud Cost Management product and observability space. These updates are expected to have boosted clientele growth in the to-be-reported quarter.
DDOG released 15 new integrations across the next-generation artificial intelligence (AI) stack, from GPU infrastructure providers to vector databases, model vendors and AI orchestration frameworks. This integration is expected to have boosted customer growth in the to-be-reported quarter.
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 at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are some stocks worth considering, as our model shows that these have the right combination of elements to beat on earnings this season.
NVIDIA (NVDA - Free Report) has an Earnings ESP of +6.93% and sports a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
NVIDIA is set to announce third-quarter 2023 results on Nov 21. Shares of NVDA have rallied 197.5% year to date.
Upstart (UPST - Free Report) has an Earnings ESP of +9.09% and a Zacks Rank #2 at present.
Upstart is set to announce third-quarter 2023 results on Nov 7. Shares of UPST have gained 107.5% year to date.
Clarivate (CLVT - Free Report) has an Earnings ESP of +5.56% and a Zacks Rank #3 at present.
Clarivate is set to announce third-quarter 2023 results on Nov 7. Shares of CLVT have declined 20.5% year to date.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.