Datadog kills it... Q2 2021……

Datadog (NASDAQ:DDOG) shares are up 10.6% in pre-market trading following the company’s upside second-quarter earnings report, strong third-quarter guidance and raised full-year outlook.
Revenue was up 67% year-over-year to $233.5M, topping analyst estimates by $21M. Adjusted earnings of $0.09 per share beat consensus by six cents.
Customers with annual recurring revenue over $100,000 grew to 1,610 from 1,015 in last year’s quarter.
For the third quarter, Datadog (DDOG) forecasts revenue of $246M to $248M, above the $226.4M consensus, and adjusted EPS of $0.05-0.06 versus the $0.03 estimate.
The full-year forecast includes sales of $938-944M, up from the prior $880-890M guidance and above the $889.2M consensus. The EPS estimate raises from $0.13-0.16 to $0.26-0.28, above the $0.16 consensus.

Amazing results!


Congrats to this board for seeing this narrative a year ago. While the market floundered, this board had long, thoughtful discussions which led to the understanding that this “slow down” would be a 1 year problem based on comparables. Now here we are, and the thesis was proven correct.

Just to add, based on their huge guidance, if they beat Q3-2021 guidance by their average beat of 8.6% (taken since Q4-2019), they will see YoY revenue growth of 73.4%! This one required some patience but it is already showing signs of paying off handsomely.

Again, congrats to all and thanks to all.



Yep an another classic Saul case of follow the numbers and the highest growth quality opportunity available and do not be distracted or discouraged by the valuation stretch.



Congrats to SAUL who kindly pointed this out OVER AND OVER AGAIN.


Fun line from the conference call:

Now for our outlook for the third quarter and the full year 2021. We are optimistic about our long-term opportunities and believe we will deliver high growth for the foreseeable future. We are addressing a very large market and are executing well against that opportunity. Taking this into account with the usual conservatism applied, we are updating our guidance as follows.

Then they proceed to forecast 60% year-over-year growth for Q3 and 56% year-over-year growth for FY 2021.



Datadog finally got around to publishing their 10-Q (which I was waiting for for revenue breakdown in North America vs. International and RPOs).

Both NA and International sequential growth was up 18%! and YoY for International stood out at 92.7%!!

Their Remaining Performance Obligations (RPOs) were $583.3 million, which was up 25.6% sequentially!!

If you now look at their YoY on RPOs the past 4 quarters, it goes 53%, 78%, 81% and now 103%!

Lastly, note that DDOG grew revenues from 51% YoY last quarter to 67% YoY this quarter, a massive jump. DDOG has beat their top of the range revenue estimates since Q4 2019 by an average of 7.75% (having just beat this quarter by 9.65%).

If you take that average and apply it to their top of the range revenue guide of $248 million in Q3, you get $267 million for Q3 revenues, which would be a 73% YoY growth increase!.

That would mean YoY revenue growth of 51%, 66%, and 73%! in subsequent quarters.

On those numbers alone, its no wonder why the stock exploded higher yesterday. Between DDOG and ZI - you’d be hard pressed to find a sore spot in these reports.

Long DDOG 12%


Between DDOG and ZI - you’d be hard pressed to find a sore spot in these reports.

The longer I follow the board and iterate on a concentrated portfolio, the more I realize how important this aspect is. Compare this to Roku or Pinterest (I owned both) where everything looked great except a couple of metrics. Rather than dismiss those as not that important, it’s better to instead put money into companies that are absolutely killing it today in the near-term, and have longterm tailwinds.

In Datadog’s case, they had sore spots in their report a year ago, but the CEO and CFO had very good explanations, and empirical evidence that it was a mere speed bump, and that the company was already back to operating at pre-pandemic levels.