I missed a little and had to jump off early so please add anything you heard, corrections, points, etc!
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Customers using 3+ products 20% up from 7% last year ← I think I got the amount of products right. The percentages are right. Note they have 8 NEW products now so this should grow a couple of ways ahead.
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Usage has returned to pre-covid levels (was lower)
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YoY comparison is tough because of acceleration in the same quarter last year
…for this one I wanted to get a better idea of how the YoY is affected. QoQ growth definitely shows great acceleration from last quarter in line with their comments about usage coming back. TTM is nice as it smooths things out but is still not
Quarter 2020-09 2020-06 2020-03 2019-12 2019-09 2019-06 2019-03 2018-12 2018-09 2018-06 2018-03 2017-12
Revenue 154.7 140 131.2 113.6 95.9 83.2 70.1 61.6 51.1 45.7 39.7 33.7
YoY Growth 61% 68% 87% 84% 88% __82% 76%*__ 83% 91%
**QoQ Growth 11% 7%** 15% 18% 15% __19%*__
TTM Rev 539.5 480.7 423.9 362.8 310.8 266 228.5 198.1 170.2
TTM Growth 49% 55% 59% 59% 57% 56%
* This is the acceleration leading to tough YoY comps
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TAM not limiting and very early on. Ramping up sales to drive growth. Able to hire during pandemic
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Azure and Google Partnership revenue will start hopefully adding significantly over the next couple of quarters. Still developing these.
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Outlook continues to be very conservative in both revenue and new logo expectations
…SNIP…had to leave the call =(—
Plugging the numbers from guidance in with a 7% beat looks like this by the way:
Quarter 2020-12 2020-09 2020-06 2020-03 2019-12
Revenue 175 154.7 140 131.2 113.6
YoY Growth 54% 61% 68% 87% 84%
QoQ Growth __13% 11%*__ 7% 15% 18%
TTM Rev 601 539.5 480.7 423.9 362.8
TTM Growth 42% 49% 55% 59% 59%
*That would make for a nice QoQ acceleration again even while the YoY and TTM comps show a deceleration. (assuming my math is right of course).
I think it is fair to take the top end of guidance and extend it considering the return of usage plus how conservative they said they are still being due to macro environment related stuff.
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These are the notes i took that aren’t already printed above:
Gave some examples of important customers without giving names. E.g. a 6-figure account with a European country’s postal service. Some others. Some 7-figure accounts.
NRR > 130%.
Lots of hiring. Not just sales. Priority remains “top line growth”. I checked their website for open jobs. 97 engineers, 4 marketing, 32 sales, 12 general and administrative, 38 “technical solutions” (tech support?).
Partnered with Azure and Google. Not a big part of the income yet. Will be.
60% of revenue growth is from existing customers. “Opportunities tend not to be a limit”. Big market and they are early on in the growth. Their successful territories need “more feet on the street”.
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Hi Rafe
Looks good although I think there is something not adding up correctly in the TTM % growth rates which show growth below all historic quarters - which can’t possibly be the case.
Just comparing TTM sales of Q3 2020 539.5m vs Q3 2019 310.8m (assuming those numbers are correct) gives a growth of 74% not 49%.
Just going back and looking at the 154.7m actuals in Q3 vs what was guided in Q2 (143-145m) again, the mid point of 144m basically represented a guide of 50.2% off a Q3 2019 base of 95.9m and they ended up at 61.4% growth so an 11.2% percentage points beat.
So the 162-164m guide for Q4 (as equally tight as ever - which appears no indication of proximity between actuals and guidance), represents a 43.4% growth over 113.64m in Q4 2019.
Based on the Q3 11.2% beat there looks like the potential to reach 54-55% YOY growth.
Last Q4 Datadog guided for 101-103m, so 102m at the mid point was a guide of 65.6% growth over 61.6m in Q4 2018 resulting in a beat of 18.9%, (84.5%-65.6%)
Based on the Q4 18.9% beat there could be the potential of reaching 62.3% YoY growth.
I would say the cone of possibility falls between 54%-62.3% YoY growth.
If you assume that the more recent trend towards narrower beats off a lower base is the dominant factor then go for the lower end.
If you feel that Q4 factors together with the possibility for post covid re-acceleration and possible impact from Azure, Google Cloud and new product launches are likely to come into play then you could go for the higher end of that range.
Overall - still a top draw business that is growing in the top quartile/decile of SaaS growth stocks with plenty of TAM opportunity remaining and passed the breakeven point but admittedly expensive on an EV/TTM or NTM basis. (But then haven’t we concluded that the already expensive faster growers still produce greater returns than the lower growth better value growers?)
Ant
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Thanks for catching the TTM growth issue Ant! It was referencing 3 quarters back instead of 4. Here are the results with it fixed and also showing the data with your various scenarios applied.
This really shows the importance of what they said about YoY being a tough comparison. Look at the QoQ grow beyond what is reasonable as we try and make YoY consistent. Note in this quarter the QoQ growth looks quite good compared to last yet the YoY is down!
Top of actual guidance…
Quarter 2020-12 2020-09 2020-06 2020-03 2019-12 2019-09
Revenue 164 154.7 140 131.2 113.6 95.9
**YoY Growth 44%** 61% 68% 87% 84% 88%
**QoQ Growth 6%** 11% 7% 15% 18% 15%
TTM Rev 590 539.5 480.7 423.9 362.8 310.8
TTM Growth 63% 74% 81% 86% 83% 83%
7% beat on guidance…
Quarter 2020-12 2020-09 2020-06 2020-03 2019-12 2019-09
Revenue 175 154.7 140 131.2 113.6 95.9
**YoY Growth 54%** 61% 68% 87% 84% 88%
**QoQ Growth 13%** 11% 7% 15% 18% 15%
TTM Rev 601 539.5 480.7 423.9 362.8 310.8
TTM Growth 66% 74% 81% 86% 83% 83%
11.2% beat on guidance…
Quarter 2020-12 2020-09 2020-06 2020-03 2019-12 2019-09
Revenue 182 154.7 140 131.2 113.6 95.9
**YoY Growth 61%** 61% 68% 87% 84% 88%
**QoQ Growth 18%** 11% 7% 15% 18% 15%
TTM Rev 608 539.5 480.7 423.9 362.8 310.8
TTM Growth 68% 74% 81% 86% 83% 83%
18.9% beat on guidance…
Quarter 2020-12 2020-09 2020-06 2020-03 2019-12 2019-09
Revenue 195 154.7 140 131.2 113.6 95.9
**YoY Growth 72%** 61% 68% 87% 84% 88%
**QoQ Growth 26%** 11% 7% 15% 18% 15%
TTM Rev 621 539.5 480.7 423.9 362.8 310.8
TTM Growth 71% 74% 81% 86% 83% 83%
I have a hard time believing they will beat by 18.9%. It would represent a huge increase in QoQ growth, not to mention it would mean management is being surprised by their own performance to an extreme extent. I’d question why.
"I would say the cone of possibility falls between 54%-62.3% YoY growth. "
I agree. I would be quite happy with the 7% scenario, which is 54% YoY growth, because that is when QoQ growth accelerates (read: trends the right way), which is far more important than YoY acceleration IMO (assuming they aren’t seasonal, which I see no sign of). They are being very conservative but they also were correct in the trend of usage coming back to pre-covid levels. Also, they were clear that some partnership boosts are not happening yet and I trust they will build in a reasonable effect in to guidance, though there is a potential to surprise if the ramp up happens all within one quarter. This is truly unknown ground (they can model it, but not really know for sure…educated guesses that are more educated than mine.)
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