We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Datadog (DDOG - Free Report) reported third-quarter 2023 non-GAAP earnings per share of 45 cents, which beat the Zacks Consensus Estimate of 34 cents and increased 95.7% from the year-ago quarter.
The company’s net revenues of $547.5 million increased 25.4% year over year. The Zacks Consensus Estimate for revenues was pegged at $523 million.
In the third quarter of 2023, Datadog had about 3,130 customers with an annual run rate (ARR) of $100K or more, up from 2,600 in the year-ago quarter.
As of the end of the third quarter, 82% of customers used two or more products, up from 80% in the year-ago quarter. Additionally, 46% of customers utilized four or more products, up from 40% in the year-ago quarter.
Datadog’s dollar-based retention rate was slightly below 120% as customers increased their usage and adopted more products.
Operating Details
In the third quarter, Datadog’s adjusted gross margin increased 260 basis points (bps) on a year-over-year basis to 82.3%.
Research & development expenses gained 12.7% on a year-over-year basis to $155.8 million, driven by increased investments in Datadog’s platform. Research & development, as a percentage of revenues, decreased 320 bps to 28.5%.
Sales and marketing expenses increased 18.6% year over year to $127.5 million. Sales and marketing expenses, as a percentage of revenues, decreased 130 bps to 23.3%.
General & administrative expenses increased 34.2% year over year, reaching $36.8 million in the reported quarter. General & administrative expenses, as a percentage of revenues, expanded 40 bps to 6.7%.
Datadog reported a non-GAAP operating income of $130.8 million compared with $74.8 million in the year-ago quarter.
Balance Sheet & Cash Flow
As of Sep 30, 2023, Datadog had cash, cash equivalents, restricted cash and marketable securities of $2.3 billion compared with $2.2 billion as of Jun 30, 2023.
Operating cash flow was $152.8 million in the reported quarter, down from $153.2 million reported in the previous quarter.
Free cash flow during the quarter was $138.2 million compared with $141.7 million in the prior quarter.
Guidance
For the fourth quarter of 2023, Datadog anticipates revenues between $564 million and $568 million. The Zacks Consensus Estimate for the same is pegged at $541.39 million.
Non-GAAP earnings are expected in the range of 42-44 cents per share. The consensus mark for earnings is pegged at 34 cents per share.
Non-GAAP operating income is expected in the range of $129-$133 million.
For 2023, Datadog anticipates revenues between $2.103 billion and $2.107 billion. The Zacks Consensus Estimate for the same is pegged at $2.06 billion.
Non-GAAP earnings per share are expected between $1.52 and $1.54. The Zacks Consensus Estimate for earnings is pegged at $1.32 per share.
Non-GAAP operating income is expected in the range of $453-$457 million.
Q3 Highlights
Datadog had a strong quarter for infrastructure monitoring ARR, which exceeded $1 billion due to continuous innovation and demand for serverless functions.
Datadog launched new logos, workloads and products in the third quarter. This attracted a number of exciting new customers in the third quarter.
For the second quarter in a row, the company closed a record number of new deals with more than $100,000 in annual commitments.
Some of the notable deals done in third-quarter 2023 are a seven-figure deal with a South American FinTech company, the U.S. federal agency and a Fortune 500 industrial company. Datadog’s other important agreement includes an eight-figure deal with a major American chain of convenience stores.
Zacks Rank & Other Stocks to Consider
Currently, Datadog sports a Zacks Rank #1 (Strong Buy).
Image: Bigstock
Datadog (DDOG) Q3 Earnings Beat Estimates, Revenues Rise Y/Y
Datadog (DDOG - Free Report) reported third-quarter 2023 non-GAAP earnings per share of 45 cents, which beat the Zacks Consensus Estimate of 34 cents and increased 95.7% from the year-ago quarter.
The company’s net revenues of $547.5 million increased 25.4% year over year. The Zacks Consensus Estimate for revenues was pegged at $523 million.
Datadog, Inc. Price, Consensus and EPS Surprise
Datadog, Inc. price-consensus-eps-surprise-chart | Datadog, Inc. Quote
Quarter Details
In the third quarter of 2023, Datadog had about 3,130 customers with an annual run rate (ARR) of $100K or more, up from 2,600 in the year-ago quarter.
As of the end of the third quarter, 82% of customers used two or more products, up from 80% in the year-ago quarter. Additionally, 46% of customers utilized four or more products, up from 40% in the year-ago quarter.
Datadog’s dollar-based retention rate was slightly below 120% as customers increased their usage and adopted more products.
Operating Details
In the third quarter, Datadog’s adjusted gross margin increased 260 basis points (bps) on a year-over-year basis to 82.3%.
Research & development expenses gained 12.7% on a year-over-year basis to $155.8 million, driven by increased investments in Datadog’s platform. Research & development, as a percentage of revenues, decreased 320 bps to 28.5%.
Sales and marketing expenses increased 18.6% year over year to $127.5 million. Sales and marketing expenses, as a percentage of revenues, decreased 130 bps to 23.3%.
General & administrative expenses increased 34.2% year over year, reaching $36.8 million in the reported quarter. General & administrative expenses, as a percentage of revenues, expanded 40 bps to 6.7%.
Datadog reported a non-GAAP operating income of $130.8 million compared with $74.8 million in the year-ago quarter.
Balance Sheet & Cash Flow
As of Sep 30, 2023, Datadog had cash, cash equivalents, restricted cash and marketable securities of $2.3 billion compared with $2.2 billion as of Jun 30, 2023.
Operating cash flow was $152.8 million in the reported quarter, down from $153.2 million reported in the previous quarter.
Free cash flow during the quarter was $138.2 million compared with $141.7 million in the prior quarter.
Guidance
For the fourth quarter of 2023, Datadog anticipates revenues between $564 million and $568 million. The Zacks Consensus Estimate for the same is pegged at $541.39 million.
Non-GAAP earnings are expected in the range of 42-44 cents per share. The consensus mark for earnings is pegged at 34 cents per share.
Non-GAAP operating income is expected in the range of $129-$133 million.
For 2023, Datadog anticipates revenues between $2.103 billion and $2.107 billion. The Zacks Consensus Estimate for the same is pegged at $2.06 billion.
Non-GAAP earnings per share are expected between $1.52 and $1.54. The Zacks Consensus Estimate for earnings is pegged at $1.32 per share.
Non-GAAP operating income is expected in the range of $453-$457 million.
Q3 Highlights
Datadog had a strong quarter for infrastructure monitoring ARR, which exceeded $1 billion due to continuous innovation and demand for serverless functions.
Datadog launched new logos, workloads and products in the third quarter. This attracted a number of exciting new customers in the third quarter.
For the second quarter in a row, the company closed a record number of new deals with more than $100,000 in annual commitments.
Some of the notable deals done in third-quarter 2023 are a seven-figure deal with a South American FinTech company, the U.S. federal agency and a Fortune 500 industrial company. Datadog’s other important agreement includes an eight-figure deal with a major American
chain of convenience stores.
Zacks Rank & Other Stocks to Consider
Currently, Datadog sports a Zacks Rank #1 (Strong Buy).
NetEase (NTES - Free Report) , AST SpaceMobile (ASTS - Free Report) and Genius Sports Limited (GENI - Free Report) are some other top-ranked stocks that investors can consider in the broader sector. While NTES sports a Zacks Rank #1, ASTS and GENI carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of NetEase have gained 54% year to date. NTES is set to report its third-quarter 2023 results on Nov 16.
Shares of AST SpaceMobile have declined 17.6% year to date. ASTS is slated to report its third-quarter 2023 results on Nov 13.
Shares of Genius Sports Limited have gained 51.3% year to date. GENI is set to report its third-quarter 2023 results on Nov 13.