DDOG Q3 Results

Link to press release: https://investors.datadoghq.com/static-files/35df76ac-de1f-4…

Link to supplemental information: https://investors.datadoghq.com/static-files/a70c79df-7e32-4…

Datadog Announces Third Quarter 2021 Financial Results
November 4, 2021
Third quarter revenue grew 75% year-over-year to $270 million
Strong growth of larger customers, with 1,800 $100k+ ARR customers, up from 1,082 a year ago
Announced ten new products and features at Dash
NEW YORK-- Datadog, Inc. (NASDAQ:DDOG), the monitoring and security platform for cloud applications,
today announced financial results for its third quarter ended September 30, 2021.
"We are pleased with our third quarter performance, with revenue growth accelerating to 75% year-over-year.
We saw broad-based strength across customer segments and products," said Olivier Pomel, co-founder and
CEO of Datadog. "Digital transformation and cloud migration continue to be transformational forces for
companies of all sizes."
Pomel added, “With ten new products and major features announced at our annual user conference, Dash, we
are continuing to innovate at a rapid pace. We are broadening our observability platform, further developing our
Cloud Security Platform, and launching the general availability of CI Visibility, which represents a major step
towards shift-left observability for developer workflows."
Third Quarter 2021 Financial Highlights:
• Revenue was $270.5 million, an increase of 75% year-over-year.
• GAAP operating loss was $(4.9) million; GAAP operating margin was (2)%.
• Non-GAAP operating income was $44.0 million; non-GAAP operating margin was 16%.
• GAAP net loss per diluted share was $(0.02); non-GAAP net income per diluted share was $0.13.
• Operating cash flow was $67.4 million, with free cash flow of $57.1 million.
• Cash, cash equivalents, restricted cash, and marketable securities were $1.5 billion as of
September 30, 2021.
Exhibit 99.1
Third Quarter & Recent Business Highlights:
• As of September 30, 2021, we had 1,800 customers with ARR of $100,000 or more, an increase of
66% from 1,082 as of September 30, 2020.
• Announced ten new products and features at our annual user conference, Dash. Product
announcements included:
? The general availability of CI Visibility, to help customers gain visibility into their developer tests
and pipelines.
? The general availability of Session Replay, a new product in our Real User Monitoring suite,
through which customers can watch individual user sessions using a video-like interface.
? The general availability of Funnel Analysis, to track user behavior through conversion funnels.
? The general availability of Network Device Monitoring, enabling customers to automatically
discover and monitor on-premise network devices and appliances.
? The general availability of Datadog Apps, which allows partners to add new functionality and
deeper integrations to the Datadog platform, including new visualizations and custom
? The introduction of Online Archives for Log Management, a warehousing solution with long-term
archival and online query capabilities.
? The private beta launch of Cloud Cost Management, to help our customers control costs for
their rapidly growing cloud and container environments.
? Official Datadog support of Vector, an open-source tool that allows users to collect, enrich, and
transform observability data, and automatically route it to the destination of their choice.
? The private beta launch of Observability Pipelines, which will include enterprise-class capability
for Vector, and the ability for end users to control it remotely using Datadog while running on
their premises or their cloud accounts.
? The private beta launch of Universal Service Monitoring, to track performance of all applications
and services without requiring custom code or instrumentation.
? The private beta launch of Application Security, a product within our Cloud Security Platform, to
monitor attacks and correlate them with application traces.
• Announced the general availability of Database Monitoring. With insights into query performance and
explain plans, as well as automatic correlation of query metrics with application and infrastructure
metrics, Database Monitoring provides engineers and database administrators the visibility they need to
quickly find and fix application performance issues that arise from slow running database queries.
Fourth Quarter and Full Year 2021 Outlook:
Based on information as of today, November 4, 2021, Datadog is providing the following guidance:
• Fourth Quarter 2021 Outlook:
? Revenue between $290 million and $292 million.
? Non-GAAP operating income between $38 million and $40 million.
? Non-GAAP net income per share between $0.11 and $0.12, assuming approximately 347 million
weighted average diluted shares outstanding.
• Full Year 2021 Outlook:
? Revenue between $993 million and $995 million.
? Non-GAAP operating income between $133 million and $135 million.
? Non-GAAP net income per share between $0.39 and $0.40, assuming approximately 344 million
weighted average diluted shares outstanding.



Thanks for the post. Here’s my top-line thoughts.

Although revenue growth dipped to 51% in Q1, it accelerated to 67% last quarter and further accelerated to 75% this quarter.

Non-GAAP Operating margins were 10% in Q1, 13% in Q2, and 16% in Q3. It’s great to see that as revenue grows, more is going to the bottom line.

Customers with ARR > 100k, has been nicely accelerating since Q4 last year. Q4 2020 = 46%, Q1 2021 = 50%, Q2 = 59%, and Q3 = 66%

I think it’s pretty amazing to see such consistent growth.