Core Viewpoint - Datadog's stock has experienced a significant decline of -18.3% over the past month, underperforming compared to the S&P 500's -1.3% and the Zacks Internet - Software industry's -6.2% [1] Earnings Estimate Revisions - Datadog is expected to report earnings of $0.42 per share for the current quarter, reflecting a year-over-year decrease of -4.6% and a 30-day estimate change of -21.8% [4] - For the current fiscal year, the consensus earnings estimate is $1.70, indicating a -6.6% change from the previous year, with a 30-day estimate change of -40.8% [4] - The next fiscal year's consensus earnings estimate of $2.11 suggests a +23.7% increase from the prior year, although it has changed -11.8% in the past month [5] Revenue Growth Forecast - The consensus sales estimate for Datadog is $739.51 million for the current quarter, representing a year-over-year growth of +21% [8] - For the current and next fiscal years, the sales estimates are $3.19 billion and $3.79 billion, both indicating a growth of +18.9% [8] Last Reported Results and Surprise History - Datadog reported revenues of $737.73 million in the last quarter, a year-over-year increase of +25.1%, with an EPS of $0.49 compared to $0.44 a year ago [9] - The reported revenues exceeded the Zacks Consensus Estimate of $711.65 million by +3.67%, and the EPS surprise was +13.95% [10] - The company has consistently beaten consensus EPS and revenue estimates over the last four quarters [10] Valuation - Datadog is graded F in the Zacks Value Style Score, indicating it is trading at a premium compared to its peers [14]

Core Viewpoint - Datadog, Inc. will present at the Morgan Stanley Technology, Media and Telecom Conference on March 4, 2025, at 1:45 p.m. Eastern Time, with a live webcast available for the presentation [1]. Group 1: Company Overview - Datadog is a monitoring and security platform for cloud applications, providing a SaaS platform that integrates various capabilities such as infrastructure monitoring, application performance monitoring, log management, user experience monitoring, and cloud security [2]. - The platform is designed to offer unified, real-time observability and security for customers' entire technology stack, facilitating digital transformation and cloud migration across organizations of all sizes and industries [2]. - Datadog's services aim to enhance collaboration among development, operations, security, and business teams, accelerate application time to market, reduce problem resolution time, secure applications and infrastructure, understand user behavior, and track key business metrics [2].

Even though major U.S. stock market indexes like the S&P 500 and the Nasdaq Composite continue climbing to new highs, not every individual stock is following along.Datadog (DDOG -5.23%) stock is still trading 33% below its record level from 2021. It was unquestionably overvalued back then, but it's starting to look attractive thanks to the company's rapid revenue growth, soaring profits, and expanding portfolio of artificial intelligence (AI) products.In fact, The Wall Street Journal tracks 46 analysts who ...

Shares of Datadog (DDOG -5.23%) are down 19% since the cloud security platform provider issued a weaker-than-expected 2025 outlook with slower revenue growth and higher expenses.However, there could still be an opportunity in the stock as the company looks to transition from a platform that alerts customers of potential problems to one that takes action and fixes them.With that in mind, let's take a closer look at the company's most recent results and guidance to see if this is a buying opportunity.Operatin ...

Datadog Opens Registration for Its 2025 DASH ConferenceThe annual conference will take place in New York on June 10-11 and feature speaking sessions from customers like Redfin, Thales IFE, Toyota and VolkswagenFebruary 20, 2025 4:05 PM EST | Source: Datadog, Inc.New York, New York--(Newsfile Corp. - February 20, 2025) - Datadog, Inc. (NASDAQ: DDOG), the monitoring and security platform for cloud applications, today opened registration for DASH, its eighth annual global conference for CIOs, CIS ...

For the quarter ended December 2024, Datadog (DDOG) reported revenue of $737.73 million, up 25.1% over the same period last year. EPS came in at $0.49, compared to $0.44 in the year-ago quarter.The reported revenue represents a surprise of +3.67% over the Zacks Consensus Estimate of $711.65 million. With the consensus EPS estimate being $0.43, the EPS surprise was +13.95%.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street e ...

Financial Performance - As of December 31, 2024, the company reported revenues of $2,684.3 million, representing a year-over-year growth of 26% from $2,128.4 million in 2023[219]. - Revenue for the year ended December 31, 2024, was $2,684,275, an increase of $555,916 or 26% compared to $2,128,359 in 2023[252]. - Approximately 75% of the revenue increase was attributed to growth from existing customers, while 25% was from new customers[252]. - The company incurred net losses of $183.7 million, $48.6 million, and $(50.2) million for the fiscal years ended December 31, 2024, 2023, and 2022, respectively[219]. Customer Metrics - The company had approximately 30,000 customers as of December 31, 2024, an increase from approximately 27,300 customers in 2023[226]. - The annual run-rate revenue (ARR) from customers with $100,000 or more increased to approximately 3,610, representing 88% of total ARR, up from 3,190 customers in 2023[228]. - The trailing 12-month dollar-based net retention rate was in the high-110% range as of December 31, 2024, an increase from the mid-110% range in 2023[229]. - Approximately 83% of customers used more than one product as of December 31, 2024, indicating strong product adoption[231]. Geographic Expansion - The company intends to expand geographically, particularly in EMEA and APAC, despite potential short-term adverse effects on operating results[233]. - Revenue from regions outside of North America accounted for approximately 30% of total revenue for both 2024 and 2023[233]. Expenses and Costs - Cost of revenue increased by $105,623 or 26% to $515,531 in 2024, primarily due to a $78.5 million increase in third-party cloud infrastructure hosting and software costs[253]. - Research and development expenses rose by $190,256 or 20% to $1,152,703 in 2024, driven by a $158.9 million increase in personnel costs[255]. - Sales and marketing expenses increased by $147,329 or 24% to $756,605 in 2024, primarily due to a $115.2 million rise in personnel costs[256]. - General and administrative expenses grew by $24,960 or 14% to $205,152 in 2024, mainly due to a $24.3 million increase in personnel costs[258]. Cash Flow and Liquidity - Cash and cash equivalents totaled $1.2 billion, with marketable securities of $2.9 billion as of December 31, 2024, indicating strong liquidity[260]. - Net cash provided by operating activities for the year ended December 31, 2024, increased by $210.6 million to $870.6 million compared to $659.9 million in 2023[265]. - Free cash flow for the year ended December 31, 2024, was $775.1 million, an increase from $597.5 million in 2023[270]. - Net cash used in investing activities for the year ended December 31, 2024, increased by $5.5 million to $736.8 million compared to $731.4 million in 2023, primarily due to an increase in purchases of marketable securities[266]. - Net cash provided by financing activities for the year ended December 31, 2024, increased by $728.8 million to $787.1 million compared to $58.3 million in 2023, driven by proceeds from the issuance of the 2029 Notes of $978.9 million[267]. Financing Activities - The company completed a private offering of $1.0 billion aggregate principal amount of convertible senior notes in December 2024, with net proceeds of approximately $979.1 million[222]. - The company issued $1.0 billion in aggregate principal amount of the 2029 Notes in December 2024, with net proceeds of approximately $979.1 million[262]. - The company used $196.8 million of the net proceeds from the 2029 Notes to repurchase approximately $112.0 million in aggregate principal amount of the 2025 Notes[262]. Other Financial Information - Other income, net increased by $55,957 or 60% to $149,656 in 2024, primarily driven by a $51.9 million increase in interest income[259]. - The company reported an increase of $88.0 million in stock-based compensation as part of the increase in non-cash charges[265]. - A hypothetical 10% relative change in interest rates would not have a material impact on the company's consolidated financial statements[282]. - The company has not entered into any hedging arrangements with respect to foreign currency risk, although it may choose to do so in the future[285].

Core Viewpoint - Datadog delivered strong Q4 2024 results, exceeding expectations, but shares fell approximately 9% due to conservative 2025 guidance overshadowing the performance [1] Financial Performance - Q4 2024 revenue reached $738 million, up 25.1% year over year, surpassing analyst expectations of $714 million [6] - Non-GAAP earnings per share were 49 cents, exceeding the consensus mark of 43 cents and increasing 11.4% from the previous year [6] - The company reported approximately 30,000 customers, up from 27,300 a year ago, with significant growth in high-value customers [7] Customer Metrics - Customers generating annual recurring revenue (ARR) of $1 million or more increased to 462, a 17% year-over-year growth [7] - 83% of customers used two or more products, with 50% using four or more, indicating successful cross-selling [8] 2025 Guidance - Datadog projected 2025 revenues between $3.175 billion and $3.195 billion, suggesting 18-19% growth, below the 25% growth achieved in Q4 2024 [10] - First-quarter 2025 revenue guidance of $737-$741 million implies just 21% year-over-year growth [10] Strategic Initiatives - Datadog's AI-related business shows promise, with AI native customers contributing about five percentage points to year-over-year revenue growth [14] - The company plans to increase operating expenses in the high 20% range year over year in 2025, focusing on sales, marketing, and R&D investments [15] Product Developments - Datadog launched several strategic products, including Datadog On-Call and enhanced security offerings, which strengthen its competitive position [16][17] Investment Perspective - Current shareholders may consider holding positions due to strong platform adoption metrics and expanding product portfolio [18] - New investors might benefit from waiting for a better entry point, given the disconnect between record bookings and conservative revenue guidance [20] Valuation - The stock trades at a forward 12-month price-to-sales (P/S) ratio of 13.54x, compared to the broader Zacks Internet - Software industry's 3.15x, indicating a pricey valuation [21]

Group 1: Datadog - Datadog provides observability software with a platform that includes around two dozen products for monitoring application and IT infrastructure performance, enhancing collaboration between development and operations teams [2] - Gartner recognized Datadog as a technology leader in observability and digital experience monitoring software, with demand for observability products projected to grow at 11% annually through 2028 due to increasing IT complexity from cloud migration and AI [3] - Datadog's fourth-quarter results exceeded expectations, with revenue rising 25% to $738 million and a 10% increase in customer count to 30,000, while average spending per existing customer also grew by 10% [4] - Despite strong performance, management provided disappointing guidance for 2025, expecting revenue growth of about 19% to $3.2 billion and a 6% drop in adjusted earnings to $1.70 per diluted share, leading to a stock price drop of over 10% [5] - The importance of observability software is expected to increase as enterprises deploy AI applications, with Morgan Stanley analyst suggesting that future spending will shift towards running inference on AI models, which could serve as a catalyst for Datadog [6] - Wall Street estimates adjusted earnings growth at 22% annually through 2027, although the current valuation of 71 times adjusted earnings appears expensive; however, Datadog has historically beaten consensus estimates by an average of 21% over the last six quarters, suggesting potential undervaluation for long-term investors [7] Group 2: The Trade Desk - The Trade Desk operates a leading independent adtech platform that assists media buyers in planning, measuring, and optimizing digital campaigns, leveraging advanced machine learning and measurement capabilities [8] - The company has a strong presence in retail media and connected TV (CTV), benefiting from its independent business model that avoids conflicts of interest by not owning ad inventory [9] - Among analysts, the median target price for The Trade Desk is $142 per share, indicating a potential upside of 75% from its current price of $81 [10] - The Trade Desk reported a 22% revenue increase to $741 million in the fourth quarter, which fell short of its guidance, but non-GAAP net income rose 44% to $0.59 per diluted share; the CEO attributed the shortfall to minor execution missteps [12] - Despite the disappointing results, Morgan Stanley analyst views the situation as a buying opportunity, emphasizing that the challenges faced were transitory and unrelated to competition or market size [13] - Wall Street anticipates earnings growth of 21% annually through 2026, with the current valuation of 49 times earnings being more reasonable compared to the previous 80 times earnings before the fourth-quarter report, suggesting that patient investors should consider buying [14]

Core Insights - Datadog reported fourth-quarter 2024 non-GAAP EPS of 49 cents, an 11.4% increase year-over-year, exceeding the Zacks Consensus Estimate by 13.95% [1] - The company's net revenues reached $737.73 million, reflecting a 25.1% year-over-year growth and surpassing the consensus estimate by 3.67% [1] Quarter Details - Datadog ended the fourth quarter with 30,000 customers, up from 27,300 in the prior-year period [2] - The company had 3,610 customers with an annual run rate (ARR) of $100,000 or more, a 13.2% increase year-over-year, contributing approximately 88% of total ARR [2] - 83% of customers used two or more products, while 50% utilized four or more products, up from 47% in the previous year [3] - Net revenue retention was in the high 110s, indicating increased usage and product adoption by customers [3] Operating Details - Adjusted gross margin contracted by 170 basis points year-over-year to 81.7% [4] - Research & development expenses rose 29.4% year-over-year to $211.6 million, with R&D as a percentage of revenues increasing by 1,000 basis points to 28.7% [4] - Sales and marketing expenses increased by 31.3% year-over-year to $173.3 million, representing 23.5% of revenues, an increase of 110 basis points [5] - General & administrative expenses grew 29.6% year-over-year to $38.7 million, accounting for 5.2% of revenues, an increase of 20 basis points [5] - Non-GAAP operating income was reported at $179.2 million, compared to $166.7 million in the year-ago quarter [5] Balance Sheet & Cash Flow - As of December 31, 2024, Datadog had cash, cash equivalents, restricted cash, and marketable securities totaling $4.2 billion, up from $3.2 billion as of September 30, 2024 [6] - Operating cash flow for the quarter was $265 million, an increase from $229 million in the previous quarter [6] - Free cash flow during the quarter was $241 million, compared to $204 million in the prior quarter [6] Guidance - For the first quarter of 2025, Datadog expects revenues between $737 million and $741 million, with non-GAAP EPS projected in the range of 41-43 cents [7] - For the full year 2025, revenues are anticipated to be between $3.175 billion and $3.195 billion, with non-GAAP EPS projected between $1.65 and $1.70 [8]