AYX and DDOG numbers tell of two different paths

Investment Analysis Clubs Saul’s Investing Discussions
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AYX and DDOG tell of two companies reporting numbers today.

AYX dropped 5.41% by end of market today, then another 18.65% after hours.

DDOG dropped 4.57% by end of market today, then another 6.29% after hours (although it was down +18% after hours at one point).

AYX reported a 2nd quarter revenue of 96.2m up 17% yoy, they had projected 95m as top end of the range in Q1 report. So they beat slightly 1.2%

Today AYX reported predicted 3Q revenue of 115m or 11% yoy. I would imagine they will slightly beat.

AYX also reported Full Year Revenue of 460-465m

That would make AYX Q4 revenue prediction of 145m (if using the higher 465m number). Last year AYX Q4 revenue number was 156.5m……So that is a negative yoy growth predicted for Q4. Its not even close. I know management is conservative but I do not see anyway they are going to be able to not be negative yoy revenue number for Q4 based on managements full year revenue predictions.

AYX
Q1 109m
Q2 96m
Q3 115m (predicted high end)

total of first three quarters equals 320m. Total year of 465m-320m(first three quarters)=145m for 4th Q

DDOG reported a 2nd quarter revenue of 140m in revenue 68% yoy, they had projected 136m as top end of the range in Q1 report. They beat slightly more 2.8%.

Today DDOG predicted 3Q revenue of 145m or 51% yoy. I would imagine they will beat slightly more.

DDOG also reported Full Year Revenue of 566-572m.

That would make DDOG Q4 revenue prediction of 200m…So that would be 75% yoy growth for Q4.

DDOG
Q1 131m
Q2 96m
Q3 145m

total of first three quarts equals 372m. Total year of 572m-372m=200m for 4th Q

This brings me to what I did with most of my AYX shares. I sold in after hours for 134.75 and 135.75. I still own less than 0.5% of portfolio in AYX. I used all of the proceeds plus some extra cash to buy DDOG shares after hours for 77.50 and 77.60.

The numbers do not lie. In my quest to be ruthless allocator of capital I made the switch. I will see how it works out over next few days. DDOG has already risen in after hours from where I bought quite a bit, AYX rose slightly from where I sold.

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Q2 revenue is 140M, not 96M. I think the implied Q4 forecast is much less than your calculation but the full year forecast is less meaningful than Q3 forecast.

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Good catch yes I put AYX’s 3Q in DDOG 3Q number.

New #'s
Q1 131m
Q2 140m
Q3 145m last year 96m 51%
Total 416m
Q4 156m last year 114m 37%

Not nearly as impressive. But I think the comparison point is still the same. DDOG still growing rapidly, AYX not so much.

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Nice post Retirementdough (and Saul),

I tend to be pretty reactive this days and should make it a personal note to not post ANYTHING in earnings season until I have had a night to sleep on it.

Best,

bulwnkl

PS I’m going to take my AYX below 1% and hold tight with DDOG to see if it will return to it’s former glory. Long-term any company able to manage +65% is going to do remarkable things when the economy returns to any semblance of normalcy.

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“Tech” catches up, fast. A whole lot of first mover advantage can be lost between now and when.

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DDOG last Q couple Qs of growth slowdown 86%->68%->51% (Q3 guide)-> 37% (Q4 guide)

This is an extremely FAST deceleration in revs. What is going on? Pressure from competitors on pricing? I am surprised DDOG is only down 15% with how it was priced

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