Core Viewpoint - Datadog's shares have increased by approximately 12.9% over the past month, outperforming the S&P 500, raising questions about the sustainability of this positive trend leading up to the next earnings release [1] Estimates Movement - Estimates for Datadog have trended upward in the past month, with the consensus estimate shifting by -20.31% due to these changes [2] VGM Scores - Datadog has a Growth Score of B but is rated F for Momentum and Value, resulting in an overall aggregate VGM Score of F, indicating it is in the lowest quintile for the value investment strategy [3] Outlook - The upward trend in estimates is promising, and Datadog holds a Zacks Rank of 3 (Hold), suggesting an expectation of in-line returns in the coming months [4] Industry Performance - Datadog is part of the Zacks Internet - Software industry, where Meta Platforms has seen a 15.3% increase in the past month, reporting revenues of $42.31 billion with a year-over-year change of +16.1% [5] - Meta Platforms is projected to report earnings of $5.83 per share for the current quarter, reflecting a year-over-year change of +13%, with a Zacks Rank of 3 (Hold) and a VGM Score of B [6]

Core Insights - Datadog is a platform designed for production engineers and DevOps to monitor the creation, deployment, and functioning of software applications, primarily in cloud environments [2][3] - The platform helps in reducing latency and maximizing uptime, ensuring optimal customer interaction with applications [3] - Over the years, Datadog has expanded its offerings from infrastructure monitoring to a comprehensive range of products including application monitoring, code monitoring, logs, and security [4] Company Overview - Datadog addresses critical business needs by providing monitoring solutions for customer-facing software applications [2] - The company utilizes modern technologies such as containers, serverless architecture, and increasingly artificial intelligence in its platform [2][4] - Datadog's investment in product development has led to a diverse portfolio of monitoring tools that cater to various aspects of software performance [4]

Summary of Datadog (DDOG) 2025 Conference Call Company Overview - **Company**: Datadog - **Industry**: Cloud Monitoring and Observability - **Core Function**: Provides a platform for production engineers and DevOps to monitor software applications, focusing on cloud-based and modern technology environments [3][4] Key Points and Arguments Current Market Position - Datadog has evolved from infrastructure monitoring to a comprehensive platform that includes application monitoring, security, and AI capabilities [4][5] - The company aims to be the "single pane of glass" for managing and remediating applications [4] Pain Points Addressed - The primary challenge for customers is the complexity and speed of application deployment in cloud environments, necessitating transparency and optimization [5][6] - Datadog's platform provides visibility into all factors affecting application performance, enabling better optimization and remediation [5] AI Integration and Growth - Datadog is experiencing significant growth from AI-native companies, which are rapidly innovating and expanding their workloads [8][9] - The company has introduced products specifically for monitoring large language models, reflecting the increasing complexity of applications [9][10] - AI-related revenue is growing faster than non-AI segments, driven by increased investment in AI technologies [12][14] Cloud Migration Trends - A significant portion of applications remains on legacy systems, with only 20-30% currently in the cloud [36] - Datadog's growth is attributed to the ongoing migration of applications to cloud environments and the consolidation of its product offerings [37][42] Customer Base and Expansion - Datadog serves 45% of the Fortune 500, with a focus on expanding within these enterprises through a "land and expand" strategy [44][45] - The company has a strong enterprise sales team and is investing in marketing and channel relationships to drive growth [45] Security Strategy - Datadog is building its security business around the concept of DevSecOps, integrating security into its observability platform [51][52] - The security segment is still developing, with potential for significant growth given the large total addressable market (TAM) [64][65] Financial Metrics - Datadog's revenue growth is primarily driven by existing customer expansion (75-80%) and new customer acquisition (20-25%) [71] - Gross margins are expected to remain around 80%, with fluctuations based on workload management and new product introductions [76][80] - The company aims for operating margins of 25%+, focusing on maximizing long-term cash flow [85][86] Additional Insights - Datadog is actively working on improving its cloud operations to better manage costs associated with spiky usage patterns [78][79] - The company is cautious about its federal business, which is currently a small part of its overall strategy but may grow as government agencies modernize their infrastructure [49][50] - FlexLogs, a new product line, has shown rapid growth, indicating successful penetration into new use cases [68][69] This summary encapsulates the key insights from the Datadog conference call, highlighting the company's strategic focus, market dynamics, and financial performance.

Financial Data and Key Metrics Changes - The meeting reported that proxies were received for approximately 91% of the aggregate voting power of the outstanding shares, indicating strong shareholder engagement [4]. Business Line Data and Key Metrics Changes - No specific business line data or key metrics were discussed during the meeting. Market Data and Key Metrics Changes - No specific market data or key metrics were discussed during the meeting. Company Strategy and Development Direction and Industry Competition - The company is focused on the election of directors and the approval of executive compensation, indicating a commitment to governance and management accountability [7][8]. Management's Comments on Operating Environment and Future Outlook - Management did not provide specific comments on the operating environment or future outlook during the meeting. Other Important Information - The meeting included the ratification of Deloitte and Touche LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2025, which reflects the company's commitment to maintaining high standards of financial oversight [8][11]. Q&A Session Summary Question: Were there any questions submitted by shareholders? - No questions were submitted during the Q&A session, leading to the adjournment of the meeting [14][15].

Core Insights - BofA Securities analyst Brad Sills reported a decline in software spending growth intentions for the second half of 2025 and 2026, with expected growth rates of +9.9% for 2025 and +10.8% for 2026, down from previous estimates [2] Software Spending Trends - The survey indicates a healthy pipeline for new software projects in 2026, with Data Analytics regaining the top spending priority, followed by Cloud Communications and Videoconferencing, and Security in third place [3] - Categories with higher spending expectations include observability and financials/ERP, while front-office applications like CRM Sales, Marketing, and Support scored lower due to firms reassessing AI priorities [4] AI Investment Insights - Infrastructure and Back Office are identified as the top software categories for AI investment, with Back Office seeing the largest increase since the last survey [5] - After LLMs, Workday Inc was the most selected for Back Office investments, while Salesforce Inc led in front-office AI offerings [5][6] Vendor Preferences - Amazon, Microsoft, and Alphabet's Google were the most frequently selected vendors for AI in infrastructure, while Adobe Inc remains the market leader in AI investments for desktop applications [6][7] - Hiring expectations for 2025 are down, with recession fears impacting spending plans more than tariffs [7]

Core Insights - Datadog AI Research has launched two significant projects: Toto, an open-weights foundation model for observability, and BOOM, the largest public benchmark for observability metrics [1][2][4] Group 1: Datadog AI Research Initiatives - Toto is the first open-source foundation model focused on observability, trained on Datadog's internal telemetry metrics, achieving superior performance compared to existing time series foundation models (TSFMs) [2][3] - BOOM provides a comprehensive benchmark with 350 million observations across 2,807 real-world multivariate series, addressing unique challenges in production telemetry [4][5] Group 2: Technical Features and Benefits - Toto's zero-shot forecasting capability allows for immediate anomaly detection and capacity planning without the need for per-series tuning, which is essential for monitoring billions of ephemeral time series [3][5] - BOOM serves as an actively maintained resource for the research community, facilitating advancements in forecasting models specific to observability metrics [4][6] Group 3: Future Directions and Collaboration - Datadog AI Research aims to continuously release AI projects and collaborate with applied AI teams to develop tools that address customer challenges and enhance engineering workflows [5][6] - The open-source nature of Toto and BOOM invites contributions from the research and open-source software communities to advance observability forecasting [6]

Core Insights - Datadog is advancing towards achieving FedRAMP High authorization, which will enhance federal agencies' ability to monitor, secure, and optimize critical applications and infrastructure [1][2][3] - The company aims to align with federal modernization and digital transformation initiatives by providing a unified platform for observability and security [2][3] - Being 'In Process' indicates that Datadog is actively working on obtaining full FedRAMP authorization, which involves stringent security controls for sensitive data protection [3] Company Overview - Datadog is a monitoring and security platform for cloud applications, offering a SaaS solution that integrates various monitoring capabilities to provide real-time observability and security [5] - The platform is designed to support organizations of all sizes across different industries, facilitating digital transformation and cloud migration [5]

Core Viewpoint - The Nasdaq-100 index includes innovative companies like Datadog and The Trade Desk, which are currently trading below their recent highs but still present attractive long-term growth prospects [1] Datadog - Datadog's shares are down 17% year to date, but the company has seen a rebound following strong earnings reports [2] - The company reported a 25% year-over-year revenue growth to $762 million in Q1, alleviating concerns about software spending due to potential economic downturns [5] - High demand for AI monitoring tools is driving growth, with Datadog signing 11 deals worth at least $10 million each in the quarter [6][7] - Datadog's revenue is currently $2.8 billion, serving a market projected to reach $81 billion by 2028, indicating significant growth potential [9] The Trade Desk - The Trade Desk, a leading digital ad-buying platform, has experienced a 34.5% decline in shares year to date but has shown recovery with a 29% increase since its earnings report on May 8 [2][13] - The company reported a 25% year-over-year revenue growth in Q1, indicating healthy ad spending on its platform despite earlier concerns about a slowdown in the ad market [13] - The Trade Desk is capitalizing on the $1 trillion ad market with its Unified ID 2.0 and AI-powered Kokai platform, which enhances ad performance measurement and improves returns on ad spending [14] - The stock's forward price-to-earnings ratio has decreased to 44, making it more attractive for investors compared to earlier in the year [15] - Analysts project an annualized earnings growth rate of 31% for The Trade Desk, suggesting strong long-term returns for investors [16]

Core Viewpoint - Snowflake (SNOW) and Datadog (DDOG) are significant players in the cloud computing sector, focusing on data analytics and observability solutions, respectively [1][2]. Industry Overview - The global cloud computing market was valued at $752.44 billion in 2024 and is projected to grow at a CAGR of 20.4% from 2025 to 2030, presenting substantial growth opportunities for both SNOW and DDOG [2]. Snowflake (SNOW) Analysis - SNOW has a net revenue retention rate of 126% as of January 31, 2025, indicating strong platform adoption and usage [3]. - The number of customers generating over $1 million in revenue increased from 455 to 580 between January 31, 2024, and January 31, 2025 [3]. - SNOW's customer base grew from 9,384 to 11,159 in the same period, with 745 customers from the Forbes Global 2000 contributing to 45% of its fiscal 2025 revenues of $3.6 billion, a 29% increase from fiscal 2024 [4]. - In April 2025, SNOW enhanced its AI Data Cloud by integrating capabilities with Apache Iceberg tables, improving query performance and data sharing [5]. - SNOW expanded its AI Data Cloud with automotive-specific solutions in May 2025, driving digital transformation and AI innovation [6]. Datadog (DDOG) Analysis - DDOG reported 3,770 customers with an annual run rate (ARR) of $100,000 or more in Q1 2025, up from approximately 3,340 in the previous year, accounting for 88% of total ARR [7]. - New products like Flex Logs and Database Monitoring quickly achieved $50 million in ARR in Q1 2025, indicating strong demand for advanced log management [8]. - DDOG's acquisitions, including Eppo and Metaplane, are enhancing its product offerings and capabilities in observability and data quality [9][10]. Performance Comparison - Year-to-date, SNOW shares have increased by 18.2%, while DDOG shares have decreased by 17.6%, attributed to macroeconomic challenges and rising expenses for DDOG [11]. - Both companies are currently considered overvalued, with SNOW trading at a forward Price/Sales ratio of 12.71X compared to DDOG's 11.89X [14]. Earnings Estimates - The Zacks Consensus Estimate for SNOW's fiscal 2026 earnings is $1.15 per share, reflecting a 38.55% year-over-year increase [16]. - The Zacks Consensus Estimate for DDOG's 2025 earnings is $1.69 per share, indicating a 7.14% year-over-year decrease [16]. Conclusion - Both SNOW and DDOG present strong growth prospects in the cloud market, but SNOW's robust portfolio and client base make it more attractive for long-term investors, while DDOG faces margin pressures and slower earnings growth [17].

Core Insights - Datadog is one of only four enterprise software companies with at least $3 billion in revenue and a growth rate in the mid-20s percentage range, indicating a rare achievement in the industry [4] Company Overview - Datadog specializes in observability and security for cloud environments, primarily serving engineering teams to ensure applications and systems are functioning properly and securely [5] - The company addresses significant trends such as digital transformation, cloud migration, and AI transformation, which are driving its growth and value delivery to customers [6]