DDOG operating loss

I’m traveling and haven’t yet been able to listen to a replay of the conference call, but did note that the earnings release included to following:

"Full Year 2019 Financial Highlights:

Non-GAAP operating loss was $(5.4) million; non-GAAP operating margin was (1.5)%.

Full Year 2020 Outlook:

Non-GAAP operating loss between $(30.0) million and $(20.0) million."

Does anyone know why the loss for 2020 is anticipated to be about 4-6 times what it was in 2019?

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Full Year 2020 Outlook: “Non-GAAP operating loss between $(30.0) million and $(20.0) million.”

Does anyone know why the loss for 2020 is anticipated to be about 4-6 times what it was in 2019?

Hi Speedy,

I’ll take a stab at that. They implied in the conference call that the fourth quarter was soooo beyond even their expectations that they accidentally outperformed. (They couldn’t spend fast enough on growing the business).

While we have operated around breakeven to slightly profitable and outperformed on profitability in Q4, we see ample opportunities to continue to invest in the large market opportunity ahead of us
our intention remains to invest much of our recent outperformance, including aggressive hiring targets in R&D and sales and marketing. We do expect approximately $10 million to $13 million of interest income for the full-year based on our cash.

The high end of their operating loss is $20 million. I figure they plan to beat that by $10 million, come in at an operating loss of $10 million, but make $10 to $13 million in interest, as they just said, and end up with a slight profit for the year.

Best,

Saul

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Thanks, Saul.

Full Year 2020 Outlook: “Non-GAAP operating loss between $(30.0) million and $(20.0) million.”

The high end of their operating loss is $20 million. I figure they plan to beat that by $10 million, come in at an operating loss of $10 million, but make $10 to $13 million in interest, as they just said, and end up with a slight profit for the year.

Wouldn’t the high end of their operating loss be $30 million? Meaning that other than ending up with a slight profit for the year, they’d have a loss of about $10 million?

how do you think about their 2020 top line projections? That is only in mid 40s% growth compared to 2019 which is not a dramatic slowdown?
you don’t put any credence in projections? or you do only do when it reinforce your existing views?

or you do only do when it reinforce your existing views?

TJ,

Talk about biting the hand that feeds you. I wouldn’t blame Saul if he ignored your questions. Maybe instead of insinuating Saul is cherry picking, you could politely point out where you’ve seen him be inconsistent, and ask nicely what the deal is.

Personally, I don’t think he has been inconsistent. He’s constantly saying how companies constantly sandbag and we should basically ignore guidance.

Your attitude is disappointing.

Bear

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Full Year 2020 Outlook: “Non-GAAP operating loss between $(30.0) million and $(20.0) million.”

Wouldn’t the high end of their operating loss be $30 million?

Hi Speedy, The high end of outlooks are the most positive, and beating the high end by $10 million would give a loss of $10 million.

Saul

how do you think about their 2020 top line projections?

I almost never even READ the guidance of these companies (I just skip past them), in order to not contaminate my mind with low-balling nonsense.

Saul

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Bear: there is nothing about attitude and insinuations in my question as you would want to read what is not there. I am surprised at the reaction. Talk about biting…

I am asking about Saul’s views about how he treats projections. An actual deceleration from 83% down to 40% would make him reconsider his position, would it not? But he replied (he did not ignore me) that he does not give any credence to projections. But still low balling is one thing but -again just a question, Fido don’t bite me please:-)- cutting the growth by half is it not more than low balling?

Saul-
That is what I do not get. That doesn’t give you any pause? really? Certainly if in the next few quarters this kind of slowdown is nowhere to be seen then sure it was low balling. But that is not what Datadog management is saying now.

tj

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An actual deceleration from 83% down to 40% would make him (Saul) reconsider his position, would it not?

Okay tj, you finally made me look at the guidance for next quarter. They guided to $117 to $119 million. So if they beat their estimates by 10%, which is the minimum you would expect (and by coincidence, what they beat by this quarter), they would have $130 million. That would be up from $70 million roughly and they’d be up 86%. So what the heck are you worrying about!!! And then they’ll raise estimates for the next quarter and the year and they’ll do that each quarter.

And besides, after doing 85% next quarter, the only way they could come in at 40% for the year would be if they averaged 25% for each of the last three quarters. And if you believe that… Well what can I say?

And besides THAT, if they just meet their estimate for next year they’d be up 48.8% (148.8% of this years revenue). And if they beat that by a minimal 10%, they’d be up 63.6% (1.488 times 1.1 equals 1.636). And they will raise even that every quarter. So again, WHERE the heck are you getting worries about 40% for next year? That’s just total scare tactics and nonsense.

Saul

You don’t put any credence in projections? or you do only do when it reinforce your existing views?

Bear: there is nothing about attitude and insinuations in my question

And tj, OF COURSE I thought you were being SNIDE and hostile when you wrote that? How else did you expect it to be interpreted? I consistently warn people not to pay attention to guidance on these companies unless they are actually having problems (like Nutanix, for example).
Saul

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