Yahoo Finance Datadog (DDOG) Q1 Earnings Beat Estimates, Revenues Rise Y/Y
Datadog DDOG reported first-quarter 2024 non-GAAP earnings per share (EPS) of 44 cents, which increased 57.1% from the year-ago quarter and beat the Zacks Consensus Estimate by 29.41%.
The company’s net revenues of $611.25 million rose 26.9% year over year and beat the consensus estimate by 3.61%.
Datadog, Inc. Price, Consensus and EPS Surprise
Datadog, Inc. price-consensus-eps-surprise-chart | Datadog, Inc. Quote
Quarter Details
The company ended the quarter with 28,000 customers, up from 25,500 in the prior-year period.
In the first quarter, Datadog had 3,340 customers with an annual run rate (ARR) of $100,000 or more, which increased 14.8% year over year. These customers generated about 87% of the total ARR.
As of Mar 31, 2024, 82% of customers used two or more products, up from 81% in the year-ago quarter. Additionally, 47% of customers utilized four or more products, up from 43% in the year-ago quarter.
Datadog’s net revenue retention was in the mid-110s as customers increased their usage and adopted more products.
Operating Details
Datadog’s adjusted gross margin increased 280 basis points (bps) on a year-over-year basis to 83.3%.
Research & development expenses gained 13.7% on a year-over-year basis to $170.8 million, driven by increased investments in DDOG’s platform. Research & development, as a percentage of revenues, decreased 320 bps to 27.9%.
Sales and marketing expenses rose 18.2% year over year to $143 million. Sales and marketing expenses, as a percentage of revenues, contracted 170 bps to 23.4%.
General & administrative expenses increased 2% year over year, reaching $30.7 million in the reported quarter. General & administrative expenses, as a percentage of revenues, contracted 120 bps to 5%.
Datadog reported a non-GAAP operating income of $164.5 million compared with $86.4 million in the year-ago quarter.
Balance Sheet & Cash Flow
As of Mar 31, 2024, Datadog had cash, cash equivalents, restricted cash and marketable securities of $2.8 billion compared with $2.6 billion as of Dec 31, 2023.
Operating cash flow was $212 million in the reported quarter, down from $220.2 million reported in the previous quarter.
Free cash flow during the quarter was $187 million compared with $201.3 million in the previous quarter.
Guidance
For the second quarter of 2024, Datadog anticipates revenues between $620 million and $624 million. Non-GAAP EPS is expected in the range of 34-36 cents. Non-GAAP operating income is expected in the band of $134-$138 million.
For 2024, DDOG expects revenues between $2.59 billion and $2.61 billion. Non-GAAP EPS is projected between $1.51 and $1.57. Non-GAAP operating income is expected in the range of $585-$605 million.
Zacks Rank & Stocks to Consider
Currently, Datadog carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader Computer and Technology sector are Babcock BK, NVIDIA NVDA and Dell Technologies DELL, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of Babcock have risen 10.3% year to date. BK is set to report first-quarter 2024 results on May 9.
Shares of NVIDIA have surged 82.9% year to date. NVDA is slated to report first-quarter fiscal 2025 results on May 22.
Shares of Dell Technologies have rallied 66.7% year to date. DELL is set to report first-quarter fiscal 2025 results on May 30.
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