I know the guidance game isn’t one to take too much stock in. But given DDOG’s consistency in their numbers and guidance, I wondered if we could predict where next quarter’s revenue might land given the guidance given today and their history of beating guidance. Below is the guidance given for each quarter’s revenue growth, the actual growth announced at EOQ, and the percentage by which DDOG beat the guidance. All revenue growth numbers are sequential.
Q4Y19 Q1Y20 Q2Y20 Q3Y20 Q4Y20 Q1Y21 Q2Y21 Q3Y21 **Q4Y21 Guidance** Guidance 6% 4% 3% 3% 5% 5% 7% 6% **7%** Actual Growth 19% 15% 7% 10% 15% 12% 18% 16% **17%(?)** Revenue Beat 11.37% 11.19% 3.70% 7.41% 8.90% 6.72% 10.14% 9.51% **8.82%(?)**
I took the average revenue guidance beat for the last 4 quarters (8.82%) and extrapolated that to assume DDOG would beat their Q4 revenue guidance by the same 8.82%.
DDOG guided a Q4 revenue midpoint of $291m (7% sequential growth), and with these numbers I’ll be expecting to see actual revenue come in at $314-316M. That would put Q4’s actual YoY growth at 78%, a slight acceleration from the 75% from today’s results.
While this may just be trying to read tea leaves late at night after an espresso martini with dinner, I do think it’s significant they guided for 7% growth rather than stick with the 5% or 6% they’ve used before. The last time they guided for 7% was a pretty significant quarter with 18% actual sequential growth.
I welcome all thoughts, especially from you west coast night owls as I sit here and contemplate my insane choice of cocktail tonight.