Why do I have confidence in Datadog

Saul, why are you so confident in DDOG?

Hi Bear,
Well they grew revenue at 85% last quarter. Their gross margins rose 300 basis points from 75% to 78%. Their adjusted operating income was positive $7.0 million, giving them an adjusted operating margin of positive 6%, improved from negative 7% the year before. Their adjusted net margin was positive 9% up from negative 7%. Their operating cash flow was $17 million, and free cash flow was $11 million. Their customers over $100,000 were at 858, up 89% from 453 a year-ago. Customers over $1 million were at 50, up 72% from 29 a year-ago. They added about 1,000 new customers in Q4, which was a record and almost twice the number they added a year ago. About 60% of their customers are now using two or more of their products, up from 25% a year ago. Their net retention rate continues over 130%. Calculated billings were up 77%. Their average ARR of their enterprise customers was about $230,000, up from $160,000 a year ago. And average ARR of our mid-market customers was about $170,000, up from $110,000… … ETC.

I’d guess that there have been very few companies that have EVER had a quarter like that at a run rate approaching half a billion dollars. And they were cash flow positive and profitable too!

They finished by saying, We believe we are at the very early stages of a multi-billion dollar market opportunity and we feel very good about our ability to build a large and successful company.

And if you put all that together, that’s why I have confidence in Datadog.




The thing I like about Datadog is in their last quarter they said they are not displacing anybody in their wins. Each deal is a new application/first time use. Another indicator it could be as big an industry they say it is.


Works well in WFH economy as DEVs are still able to do their jobs remote and need DDOG capability. That and the fact that DDOG is a “sell to developer” thinking/start small and grow/low service effort required to implement… This still wins.