Today, Amazon just posted probably the worst earning report in the recent several years. Besides the commerce business experiencing headwinds, AWS revenue only grew 4% sequentially and 27% YoY (28% if adjusted for consistent currency). Azure’s growth trend was better but was also slowing down, based on Microsoft’s recent earning report.
Because Datadog’s main business is to provide infrastructure monitoring and Datadog’s revenue model is based on usage, Datadog’s revenue should has strong positive correlation to the assumption data on the public clouds (AWS, Azure, GCP etc).
I’m guessing that Datadog’s Q3 earning will also show the same slowdown trend. And since Datadog’s sequential revenue growth rate in the last two quarters were only about 11% (way less than its growth rate in last year), the potential slowdown of Q3 may result in an even worse YoY number.
I think the ER next week is going to be tough for Datadog. Curious about you guys’ thoughts.
Luffy