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Datadog Announces Second Quarter 2024 Financial Results

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Datadog (NASDAQ: DDOG) released its Q2 2024 financial results, reporting a 27% revenue increase YoY to $645 million. The company’s GAAP operating income was $13 million with a 2% operating margin, while non-GAAP operating income stood at $158 million with a 24% operating margin. GAAP net income per share was $0.12; non-GAAP net income per share was $0.43. The company generated $164 million in operating cash flow and $144 million in free cash flow. Datadog's customer base with ARR of $100k+ grew by 13% to about 3,390 customers. Additionally, Datadog announced the general availability of LLM Observability, innovations in Generative AI, and other security and analytics tools at DASH 2024. The company provided Q3 revenue guidance between $660 million and $664 million and full-year revenue guidance between $2.62 billion and $2.63 billion.

Datadog (NASDAQ: DDOG) ha pubblicato i risultati finanziari del secondo trimestre 2024, registrando un aumento del fatturato del 27% rispetto all'anno precedente, raggiungendo $645 milioni. Il reddito operativo GAAP dell'azienda è stato di $13 milioni con un margine operativo del 2%, mentre il reddito operativo non GAAP è stato di $158 milioni con un margine operativo del 24%. L'utile netto GAAP per azione era di $0.12; l'utile netto non GAAP per azione era di $0.43. L'azienda ha generato $164 milioni in flusso di cassa operativo e $144 milioni in flusso di cassa free. La banca clienti di Datadog con ARR di oltre $100k è cresciuta del 13%, raggiungendo circa 3.390 clienti. Inoltre, Datadog ha annunciato la disponibilità generale di LLM Observability, innovazioni in AI generativa e altri strumenti di sicurezza e analisi al DASH 2024. L'azienda ha fornito previsioni di fatturato per il terzo trimestre comprese tra $660 milioni e $664 milioni e previsioni di fatturato per l'intero anno comprese tra $2.62 miliardi e $2.63 miliardi.

Datadog (NASDAQ: DDOG) publicó sus resultados financieros del segundo trimestre de 2024, reportando un incremento en los ingresos del 27% interanual, alcanzando $645 millones. El ingreso operativo GAAP de la empresa fue de $13 millones con un margen operativo del 2%, mientras que el ingreso operativo no GAAP fue de $158 millones con un margen operativo del 24%. El ingreso neto GAAP por acción fue de $0.12; el ingreso neto no GAAP por acción fue de $0.43. La empresa generó $164 millones en flujo de caja operativo y $144 millones en flujo de caja libre. La base de clientes de Datadog con ARR de más de $100k creció un 13% hasta alrededor de 3,390 clientes. Además, Datadog anunció la disponibilidad general de LLM Observability, innovaciones en IA Generativa y otras herramientas de seguridad y análisis en DASH 2024. La empresa proporcionó orientación de ingresos para el tercer trimestre entre $660 millones y $664 millones y orientación de ingresos para todo el año entre $2.62 mil millones y $2.63 mil millones.

Datadog (NASDAQ: DDOG)는 2024년 2분기 재무 결과를 발표하며, 전년 대비 27%의 매출 증가를 보고하여 $645백만에 달했습니다. 회사의 GAAP 운영 소득$13백만으로 2%의 운영 마진을 기록했으며, 비 GAAP 운영 소득$158백만으로 24%의 운영 마진을 보였습니다. GAAP 순익은 주당 $0.12였고, 비 GAAP 순익은 주당 $0.43였습니다. 회사는 $164백만의 운영 현금 흐름$144백만의 자유 현금 흐름을 창출했습니다. $100k 이상의 ARR을 가진 Datadog의 고객 기반13% 성장하여 약 3,390 고객에 도달했습니다. 추가로, Datadog은 DASH 2024에서 LLM Observability, 생성 AI 혁신 및 기타 보안 및 분석 도구의 일반적인 가용성을 발표했습니다. 회사는 3분기 매출 가이던스를 $660백만 및 $664백만 사이로, 연간 매출 가이던스를 $2.62억 및 $2.63억 사이로 제공했습니다.

Datadog (NASDAQ: DDOG) a publié ses résultats financiers du deuxième trimestre 2024, rapportant une augmentation des revenus de 27% par rapport à l'année précédente, atteignant $645 millions. Le revenu d'exploitation GAAP de l'entreprise s'élevait à $13 millions avec une marge d'exploitation de 2%, tandis que le revenu d'exploitation non-GAAP était de $158 millions avec une marge d'exploitation de 24%. Le résultat net GAAP par action était de $0.12; le résultat net non-GAAP par action était de $0.43. L'entreprise a généré $164 millions de flux de trésorerie d'exploitation et $144 millions de flux de trésorerie disponible. La base de clients de Datadog avec un ARR supérieur à $100k a augmenté de 13%, atteignant environ 3,390 clients. De plus, Datadog a annoncé la disponibilité générale de LLM Observability, des innovations en IA Générative et d'autres outils de sécurité et d'analyse lors de DASH 2024. L'entreprise a fourni des prévisions de revenus pour le troisième trimestre entre $660 millions et $664 millions et des prévisions de revenus pour l'année complète entre $2.62 milliards et $2.63 milliards.

Datadog (NASDAQ: DDOG) hat die finanziellen Ergebnisse des 2. Quartals 2024 veröffentlicht und berichtet von einem Umsatzanstieg von 27% im Vergleich zum Vorjahr auf $645 Millionen. Das GAAP-Betriebsergebnis des Unternehmens betrug $13 Millionen bei einer operativen Marge von 2%, während das nicht-GAAP-Betriebsergebnis bei $158 Millionen mit einer operativen Marge von 24% lag. Der GAAP-Nettoertrag pro Aktie betrug $0.12; der nicht-GAAP-Nettoertrag pro Aktie betrug $0.43. Das Unternehmen generierte $164 Millionen an operativem Cashflow und $144 Millionen an freiem Cashflow. Die Kundenbasis von Datadog mit ARR über $100.000 wuchs um 13% auf etwa 3.390 Kunden. Darüber hinaus kündigte Datadog die allgemeine Verfügbarkeit von LLM Observability, Innovationen in Generativer KI und anderen Sicherheits- und Analysetools auf DASH 2024 an. Das Unternehmen gab eine Umsatzprognose für das 3. Quartal von $660 Millionen bis $664 Millionen und eine Jahresprognose von $2.62 Milliarden bis $2.63 Milliarden bekannt.

Positive
  • Revenue grew by 27% YoY to $645 million.
  • Non-GAAP operating income was $158 million with a 24% operating margin.
  • Generated $164 million in operating cash flow and $144 million in free cash flow.
  • Customer base with ARR of $100k+ grew by 13% to 3,390.
  • Provided positive Q3 2024 revenue guidance between $660 million and $664 million.
  • Full-year 2024 revenue guidance between $2.62 billion and $2.63 billion.
Negative
  • GAAP operating income was only $13 million with a 2% operating margin.
  • GAAP net income per share was low at $0.12.

Insights

Datadog's Q2 2024 results show robust growth with revenue increasing 27% year-over-year to $645 million. The company's customer base expansion is noteworthy, with 3,390 customers having ARR of $100,000+, up 13% from last year. The non-GAAP operating margin of 24% demonstrates strong profitability.

The company's financial outlook for Q3 and full-year 2024 indicates continued growth expectations. With $3.0 billion in cash and equivalents, Datadog has a solid financial position to fund innovation and potential acquisitions. However, investors should note the slight deceleration in revenue growth compared to previous quarters, which warrants monitoring in future reports.

Datadog's product innovations announced at DASH 2024 showcase its commitment to staying at the forefront of cloud monitoring and security. The introduction of LLM Observability and enhancements for Generative AI applications position the company well in the rapidly evolving AI landscape. New offerings like Agentless Scanning, Data Security and Code Security expand Datadog's security portfolio, potentially opening new revenue streams.

The unified experience integrating Datadog Agent with OpenTelemetry Collector is a strategic move, enhancing interoperability and potentially increasing market share. The Kubernetes Autoscaling feature addresses a critical need in cloud resource optimization, which could drive further adoption among enterprise customers managing complex cloud environments.

Datadog's State of Cloud Costs 2024 report revealing a 40% increase in GPU instance spending highlights the growing demand for AI and machine learning capabilities. This trend aligns with Datadog's strategic focus on AI-related products and could drive future growth as companies invest more in these technologies.

The addition of high-profile executives like Yanbing Li as CPO and David Galloreese as CPO brings valuable experience from industry leaders like Google, VMware and Figma. These hires could enhance Datadog's product strategy and talent management, potentially leading to improved innovation and employee retention. Investors should watch for the impact of these leadership changes on product development and company culture in the coming quarters.

Second quarter revenue grew 27% year-over-year to $645 million

Strong growth of larger customers, with about 3,390 $100k+ ARR customers, up from about 2,990 a year ago

Announced general availability of LLM Observability

Announced innovations for Generative AI, Observability, Cloud Security, Product Analytics, Software Delivery, and Cloud Service Management at DASH 2024

NEW YORK, Aug. 8, 2024 /PRNewswire/ -- Datadog, Inc. (NASDAQ:DDOG), the monitoring and security platform for cloud applications, today announced financial results for its second quarter ended June 30, 2024.

"Datadog executed well in the second quarter, with 27% year-over-year revenue growth, continued customer growth, and expanding multi-product adoption across our platform," said Olivier Pomel, co-founder and CEO of Datadog.

Pomel added, "At our DASH 2024 user conference, we announced dozens of new products and capabilities, delivering innovations to help our customers observe their environments, secure their infrastructures and workloads, and act to remediate problems before they affect users."

Second Quarter 2024 Financial Highlights:

  • Revenue was $645 million, an increase of 27% year-over-year.
  • GAAP operating income was $13 million; GAAP operating margin was 2%.
  • Non-GAAP operating income was $158 million; non-GAAP operating margin was 24%.
  • GAAP net income per diluted share was $0.12; non-GAAP net income per diluted share was $0.43.
  • Operating cash flow was $164 million, with free cash flow of $144 million.
  • Cash, cash equivalents, and marketable securities were $3.0 billion as of June 30, 2024.

Second Quarter & Recent Business Highlights:

  • As of June 30, 2024, we had about 3,390 customers with ARR of $100,000 or more, an increase of 13% from about 2,990 as of June 30, 2023.
  • Announced that Yanbing Li joined as Chief Product Officer. Li has more than 25 years of product, technology and engineering experience, having led global engineering, operations and infrastructure teams at Aurora, Google and VMware.
  • Announced that David Galloreese joined as Chief People Officer. Galloreese has more than 20 years of human resources experience at tech companies and large-scale, high visibility brands, like Figma, Wells Fargo, and Walmart.
  • Announced new additions to our security product portfolio, including Agentless Scanning, Data Security and Code Security, which allow security teams to easily secure their code, cloud environments and production applications.
  • Announced the launch of Live Debugger, a new tool that enables developers to step through code in production environments and find the exact root cause of coding errors.
  • Announced a unified experience integrating the Datadog Agent and OpenTelemetry Collector. With this announcement, customers can use Datadog's fully supported Agent while accessing the complete capabilities of the OpenTelemetry Collector; onboard quickly using the existing collector configuration; and centralize the management of collectors remotely - all while benefiting from Datadog's reliability and global support team.
  • Announced Log Workspaces, a suite of capabilities in a powerful, collaborative space that allows analysts and engineers from all teams in an organization to connect logs and other datasets, and build multi-stage queries that allow for sophisticated analytics to answer complex questions on business, securities and application issues.
  • Announced Datadog On-Call, a modern on-call experience with observability-enriched paging and seamless incident management workflows.
  • Announced the general availability of LLM Observability, which allows AI application developers and machine learning engineers to efficiently monitor, improve and secure large language model applications.
  • Announced Datadog Kubernetes Autoscaling, a set of capabilities that intelligently automates resource optimization and can automatically scale customers' Kubernetes environments based on real-time and historical utilization metrics.
  • Announced the general availability of Data Jobs Monitoring, a new product that helps data platform teams and data engineers detect problematic Spark and Databricks jobs anywhere in their data pipelines, remediate failed and long-running-jobs faster, and optimize over-provisioned compute resources to reduce costs.
  • Announced the general availability of Datadog App Builder, a low-code development tool that helps teams rapidly create self-service applications and integrate them securely into their monitoring stacks.
  • Released its State of Cloud Costs 2024 report. The report found organizations that use graphics processing unit (GPU) instances have increased their average spending on those instances by 40% in the last year.

Third Quarter and Full Year 2024 Outlook:

Based on information as of today, August 8, 2024, Datadog is providing the following guidance:

  • Third Quarter 2024 Outlook:
    • Revenue between $660 million and $664 million.
    • Non-GAAP operating income between $146 million and $150 million.
    • Non-GAAP net income per share between $0.38 and $0.40, assuming approximately 360 million weighted average diluted shares outstanding.
  • Full Year 2024 Outlook:
    • Revenue between $2.62 billion and $2.63 billion.
    • Non-GAAP operating income between $620 million and $630 million.
    • Non-GAAP net income per share between $1.62 and $1.66, assuming approximately 360 million weighted average diluted shares outstanding.

Datadog has not reconciled its expectations as to non-GAAP operating income, or as to non-GAAP net income per share, to their most directly comparable GAAP measure as a result of uncertainty regarding, and the potential variability of, reconciling items such as stock-based compensation and employer payroll taxes on equity incentive plans. Accordingly, reconciliation is not available without unreasonable effort, although it is important to note that these factors could be material to Datadog's results computed in accordance with GAAP.

Conference Call Details:

  • What: Datadog financial results for the second quarter of 2024 and outlook for the third quarter and the full year 2024
  • When: August 8, 2024 at 8:00 A.M. Eastern Time (5:00 A.M. Pacific Time)
  • Dial in: To access the call in the U.S., please register here. Callers are encouraged to dial into the call 10 to 15 minutes prior to the start to prevent any delay in joining.
  • Webcast: https://investors.datadoghq.com (live and replay)
  • Replay: A replay of the call will be archived on the investor relations website

About Datadog

Datadog is the observability and security platform for cloud applications. Our SaaS platform integrates and automates infrastructure monitoring, application performance monitoring, log management, user experience monitoring, cloud security and many other capabilities to provide unified, real-time observability and security for our customers' entire technology stack. Datadog is used by organizations of all sizes and across a wide range of industries to enable digital transformation and cloud migration, drive collaboration among development, operations, security and business teams, accelerate time to market for applications, reduce time to problem resolution, secure applications and infrastructure, understand user behavior, and track key business metrics.

Forward-Looking Statements

This press release and the earnings call referencing this press release contain "forward-looking" statements, as that term is defined under the federal securities laws, including but not limited to statements regarding Datadog's strategy, product and platform capabilities, the growth in and ability to capitalize on long-term market opportunities including the pace and scope of cloud migration and digital transformation, gross margins and operating margins including with respect to sales and marketing, research and development expenses, net interest and other income, cash taxes, investments and capital expenditures, and Datadog's future financial performance, including its outlook for the third quarter and the full year 2024 and related notes and assumptions. These forward-looking statements are based on Datadog's current assumptions, expectations and beliefs and are subject to substantial risks, uncertainties, assumptions and changes in circumstances that may cause Datadog's actual results, performance or achievements to differ materially from those expressed or implied in any forward-looking statement.

The risks and uncertainties referred to above include, but are not limited to (1) our recent rapid growth may not be indicative of our future growth; (2) our history of operating losses; (3) our limited operating history; (4) our dependence on existing customers purchasing additional subscriptions and products from us and renewing their subscriptions; (5) our ability to attract new customers; (6) our ability to effectively develop and expand our sales and marketing capabilities; (7) risk of a security breach; (8) risk of interruptions or performance problems associated with our products and platform capabilities; (9) our ability to adapt and respond to rapidly changing technology or customer needs; (10) the competitive markets in which we participate; (11) risks associated with successfully managing our growth; and (12) general market, political, economic, and business conditions including concerns about reduced economic growth and associated decreases in information technology spending. These risks and uncertainties are more fully described in our filings with the Securities and Exchange Commission (SEC), including in the section entitled "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 24, 2024. Additional information will be made available in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2024 and other filings and reports that we may file from time to time with the SEC. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, we cannot guarantee future results, levels of activity, performance, achievements, or events and circumstances reflected in the forward-looking statements will occur. Forward-looking statements represent our beliefs and assumptions only as of the date of this press release. We disclaim any obligation to update forward-looking statements.

About Non-GAAP Financial Measures

Datadog discloses the following non-GAAP financial measures in this release and the earnings call referencing this press release: non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses (research and development, sales and marketing and general and administrative), non-GAAP operating income (loss), non-GAAP operating margin, non-GAAP net income (loss), non-GAAP net income (loss) per diluted share, non-GAAP net income (loss) per basic share, free cash flow and free cash flow margin. Datadog uses each of these non-GAAP financial measures internally to understand and compare operating results across accounting periods, for internal budgeting and forecasting purposes, for short- and long-term operating plans, and to evaluate Datadog's financial performance. Datadog believes they are useful to investors, as a supplement to GAAP measures, in evaluating its operational performance, as further discussed below. Datadog's non-GAAP financial measures may not provide information that is directly comparable to that provided by other companies in its industry, as other companies in its industry may calculate non-GAAP financial results differently, particularly related to non-recurring and unusual items. In addition, there are limitations in using non-GAAP financial measures because the non-GAAP financial measures are not prepared in accordance with GAAP and may be different from non-GAAP financial measures used by other companies and exclude expenses that may have a material impact on Datadog's reported financial results.

Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. A reconciliation of the historical non-GAAP financial measures to their most directly comparable GAAP measures has been provided in the financial statement tables included below in this press release.

Datadog defines non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses (research and development, sales and marketing and general and administrative), non-GAAP operating income (loss), non-GAAP operating margin and non-GAAP net income (loss) as the respective GAAP balances, adjusted for, as applicable: (1) stock-based compensation expense; (2) the amortization of acquired intangibles; (3) employer payroll taxes on employee stock transactions; (4) amortization of issuance costs; and (5) an assumed provision for income taxes based on our long-term projected tax rate. Our estimated long-term projected tax rate is subject to change for a variety of reasons, including the rapidly evolving global tax environment, significant changes in Datadog's geographic earnings mix, or other changes to our strategy or business operations. We will re-evaluate our long-term projected tax rate as appropriate. Datadog defines free cash flow as net cash provided by operating activities, minus capital expenditures and minus capitalized software development costs, if any. Investors are encouraged to review the reconciliation of these historical non-GAAP financial measures to their most directly comparable GAAP financial measures.

Management believes these non-GAAP financial measures are useful to investors and others in assessing Datadog's operating performance due to the following factors:

Stock-based compensation. Datadog utilizes stock-based compensation to attract and retain employees. It is principally aimed at aligning their interests with those of its stockholders and at long-term retention, rather than to address operational performance for any particular period. As a result, stock-based compensation expenses vary for reasons that are generally unrelated to financial and operational performance in any particular period.

Amortization of acquired intangibles. Datadog views amortization of acquired intangible assets as items arising from pre-acquisition activities determined at the time of an acquisition. While these intangible assets are evaluated for impairment regularly, amortization of the cost of acquired intangibles is an expense that is not typically affected by operations during any particular period.

Employer payroll taxes on employee stock transactions. Datadog excludes employer payroll tax expense on equity incentive plans as these expenses are tied to the exercise or vesting of underlying equity awards and the price of Datadog's common stock at the time of vesting or exercise. As a result, these taxes may vary in any particular period independent of the financial and operating performance of Datadog's business.

Amortization of issuance costs. In June 2020, Datadog issued $747.5 million of convertible senior notes due 2025, which bear interest at an annual fixed rate of 0.125%. Debt issuance costs, which reduce the carrying value of the convertible debt instrument, are amortized as interest expense over the term. The expense for the amortization of debt issuance costs is a non-cash item, and we believe the exclusion of this interest expense will provide for a more useful comparison of our operational performance in different periods.

Additionally, Datadog's management believes that the non-GAAP financial measure free cash flow is meaningful to investors because it is a measure of liquidity that provides useful information in understanding and evaluating the strength of our liquidity and future ability to generate cash that can be used for strategic opportunities or investing in our business. Free cash flow represents net cash provided by operating activities, reduced by capital expenditures and capitalized software development costs, if any. The reduction of capital expenditures and amounts capitalized for software development facilitates comparisons of Datadog's liquidity on a period-to-period basis and excludes items that management does not consider to be indicative of our liquidity.

Operating Metrics

Datadog's number of customers with ARR of $100,000 or more is based on the ARR of each customer, as of the last month of the quarter.

We define the number of customers as the number of accounts with a unique account identifier for which we have an active subscription in the period indicated. Users of our free trials or tier are not included in our customer count. A single organization with multiple divisions, segments or subsidiaries is generally counted as a single customer. However, in some cases where they have separate billing terms, we may count separate divisions, segments or subsidiaries as multiple customers.

We define ARR as the annualized revenue run-rate of subscription agreements from all customers at a point in time. We calculate ARR by taking the monthly recurring revenue, or MRR, and multiplying it by 12. MRR for each month is calculated by aggregating, for all customers during that month, monthly revenue from committed contractual amounts, additional usage, usage from subscriptions for a committed contractual amount of usage that is delivered as used, and monthly subscriptions. ARR and MRR should be viewed independently of revenue, and do not represent our revenue under GAAP on a monthly or annualized basis, as they are operating metrics that can be impacted by contract start and end dates and renewal rates. ARR and MRR are not intended to be replacements or forecasts of revenue.

Datadog, Inc.

Condensed Consolidated Statements of Operations

(In thousands, except per share data; unaudited)




Three Months Ended

June 30,


Six Months Ended

June 30,



2024


2023


2024


2023

Revenue


$         645,279


$         509,460


$      1,256,532


$         991,174

Cost of revenue (1)(2)(3)


123,499


101,846


233,597


201,760

Gross profit


521,780


407,614


1,022,935


789,414

Operating expenses:









Research and development (1)(3)


274,599


239,494


544,587


468,972

Sales and marketing (1)(2)(3)


187,005


147,455


360,886


292,426

General and administrative (1)(3)


47,558


42,671


92,848


84,992

Total operating expenses


509,162


429,620


998,321


846,390

Operating income (loss)


12,618


(22,006)


24,614


(56,976)

Other income (loss):









Interest expense (4)


(1,477)


(1,526)


(2,851)


(3,707)

Interest income and other income, net


36,652


22,624


72,215


39,351

Other income, net


35,175


21,098


69,364


35,644

Income (loss) before provision for income taxes


47,793


(908)


93,978


(21,332)

Provision for income taxes


3,969


3,061


7,523


6,723

Net income (loss)


$            43,824


$            (3,969)


$            86,455


$          (28,055)

Net income (loss) per share - basic


$                0.13


$              (0.01)


$                0.26


$              (0.09)

Net income (loss) per share - diluted


$                0.12


$              (0.01)


$                0.24


$              (0.09)

Weighted average shares used in calculating net income (loss) per share:









Basic


334,941


322,215


333,373


320,788

Diluted


356,740


322,215


356,650


320,788










(1) Includes stock-based compensation expense as follows:









Cost of revenue


$              6,393


$              4,157


$            11,920


$              7,882

Research and development


87,105


75,730


175,518


150,433

Sales and marketing


29,201


25,884


57,732


48,898

General and administrative


11,953


12,566


24,515


23,852

Total


$         134,652


$         118,337


$         269,685


$         231,065










(2) Includes amortization of acquired intangibles as follows:









Cost of revenue


$              1,281


$              2,064


$              3,308


$             4,080

Sales and marketing


205


206


410


409

Total


$              1,486


$              2,270


$              3,718


$             4,489


(3) Includes employer payroll taxes on employee stock transactions as follows:

Cost of revenue


$                   68


$                 109


$                 260


$                 169

Research and development


6,589


5,360


17,408


9,953

Sales and marketing


608


1,253


2,761


2,028

General and administrative


1,521


1,143


3,578


2,108

Total


$              8,786


$              7,865


$            24,007


$            14,258










(4) Includes amortization of issuance costs as follows:









Interest expense


$                 910


$                 846


$              1,760


$              1,691

Total


$                 910


$                 846


$              1,760


$              1,691

 

Datadog, Inc.

Condensed Consolidated Balance Sheets

(In thousands; unaudited)




June 30,
2024


December 31,
2023

ASSETS





CURRENT ASSETS:





Cash and cash equivalents


$                410,963


$                330,339

Marketable securities


2,549,143


2,252,559

Accounts receivable, net of allowance for credit losses of $12,902 and $12,096 as
of June 30, 2024 and December 31, 2023, respectively


533,292


509,279

Deferred contract costs, current


49,518


44,938

Prepaid expenses and other current assets


49,174


41,022

Total current assets


3,592,090


3,178,137

Property and equipment, net


198,911


171,872

Operating lease assets


166,941


126,562

Goodwill


350,864


352,694

Intangible assets, net


5,804


9,617

Deferred contract costs, non-current


77,040


73,728

Other assets


20,741


23,462

TOTAL ASSETS


$             4,412,391


$             3,936,072

LIABILITIES AND STOCKHOLDERS' EQUITY





CURRENT LIABILITIES:





Accounts payable


$                115,991


$                  87,712

Accrued expenses and other current liabilities


104,791


127,631

Operating lease liabilities, current


24,565


21,974

Convertible senior notes, net, current


743,970


Deferred revenue, current


801,562


765,735

Total current liabilities


1,790,879


1,003,052

Operating lease liabilities, non-current


193,835


138,128

Convertible senior notes, net, non-current



742,235

Deferred revenue, non-current


14,049


21,210

Other liabilities


6,320


6,093

Total liabilities


2,005,083


1,910,718

STOCKHOLDERS' EQUITY:





Common stock


3


3

Additional paid-in capital


2,484,264


2,181,267

Accumulated other comprehensive loss


(9,716)


(2,218)

Accumulated deficit


(67,243)


(153,698)

Total stockholders' equity


2,407,308


2,025,354

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY


$             4,412,391


$             3,936,072

 

Datadog, Inc.

Condensed Consolidated Statements of Cash Flow

(In thousands; unaudited)




Three Months Ended

June 30,


Six Months Ended

June 30,



2024


2023


2024


2023

CASH FLOWS FROM OPERATING ACTIVITIES:









Net income (loss)


$           43,824


$           (3,969)


$           86,455


$         (28,055)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:









Depreciation and amortization


12,440


10,550


25,335


20,825

(Accretion) amortization of (discounts) premiums on marketable securities


(12,569)


(8,096)


(26,695)


(13,291)

Amortization of issuance costs


910


846


1,760


1,691

Amortization of deferred contract costs


12,450


9,348


24,294


17,996

Stock-based compensation, net of amounts capitalized


134,652


118,337


269,685


231,065

Non-cash lease expense


6,781


6,252


13,591


12,196

Allowance for credit losses on accounts receivable


3,842


2,579


6,574


6,311

Loss on disposal of property and equipment


300


333


343


421

Changes in operating assets and liabilities:









Accounts receivable, net


(86,076)


31,366


(30,586)


60,139

Deferred contract costs


(19,534)


(15,868)


(32,170)


(27,618)

Prepaid expenses and other current assets


5,632


(1,013)


(8,443)


(16,823)

Other assets


(443)


2,077


2,171


2,241

Accounts payable


48,692


6,352


31,570


24,897

Accrued expenses and other liabilities


(8,423)


(16,009)


(15,856)


(44,089)

Deferred revenue


21,946


10,073


28,666


39,039

Net cash provided by operating activities


164,424


153,158


376,694


286,945

CASH FLOWS FROM INVESTING ACTIVITIES:









Purchases of marketable securities


(602,950)


(632,547)


(1,240,301)


(1,390,334)

Maturities of marketable securities


564,319


520,669


965,985


1,018,317

Proceeds from sale of marketable securities


8


15,292


8


36,633

Purchases of property and equipment


(4,415)


(2,339)


(18,573)


(11,078)

Capitalized software development costs


(16,229)


(9,087)


(27,594)


(17,798)

Cash paid for acquisition of businesses; net of cash acquired


(444)


(2,025)


(444)


(2,025)

Net cash used in investing activities


(59,711)


(110,037)


(320,919)


(366,285)

CASH FLOWS FROM FINANCING ACTIVITIES:









Proceeds from exercise of stock options


1,753


5,436


3,944


7,534

Proceeds for issuance of common stock under the employee stock purchase plan


22,507


19,986


22,507


19,986

Repayments of convertible senior notes


(25)



(25)


Net cash provided by financing activities


24,235


25,422


26,426


27,520










Effect of exchange rate changes on cash, cash equivalents and restricted cash


(203)


213


(1,577)


836










NET DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH


128,745


68,756


80,624


(50,984)

CASH, CASH EQUIVALENTS AND RESTRICTED CASH—Beginning of period


282,218


222,548


330,339


342,288

CASH, CASH EQUIVALENTS AND RESTRICTED CASH—End of period


$         410,963


$         291,304


$         410,963


$         291,304










RECONCILIATION OF CASH AND CASH EQUIVALENTS WITHIN THE CONDENSED CONSOLIDATED BALANCE SHEETS TO THE AMOUNTS
SHOWN IN THE STATEMENTS OF CASH FLOWS ABOVE:

Cash and cash equivalents


$         410,963


$         291,304


$         410,963


$         291,304

Total cash and cash equivalents


$         410,963


$         291,304


$         410,963


$         291,304

 

Datadog, Inc.

Reconciliation from GAAP to Non-GAAP Results

(In thousands, except per share data; unaudited)




Three Months Ended

June 30,


Six Months Ended

June 30,



2024


2023


2024


2023

Reconciliation of gross profit and gross margin









GAAP gross profit


$          521,780


$          407,614


$       1,022,935


$          789,414

Plus: Stock-based compensation expense


6,393


4,157


11,920


7,882

Plus: Amortization of acquired intangibles


1,281


2,064


3,308


4,080

Plus: Employer payroll taxes on employee stock transactions


68


109


260


169

Non-GAAP gross profit


$          529,522


$          413,944


$       1,038,423


$          801,545

GAAP gross margin


81 %


80 %


81 %


80 %

Non-GAAP gross margin


82 %


81 %


83 %


81 %










Reconciliation of operating expenses









GAAP research and development


$          274,599


$          239,494


$          544,587


$          468,972

Less: Stock-based compensation expense


(87,105)


(75,730)


(175,518)


(150,433)

Less: Employer payroll taxes on employee stock transactions


(6,589)


(5,360)


(17,408)


(9,953)

Non-GAAP research and development


$          180,905


$          158,404


$          351,661


$          308,586










GAAP sales and marketing


$          187,005


$          147,455


$          360,886


$          292,426

Less: Stock-based compensation expense


(29,201)


(25,884)


(57,732)


(48,898)

Less: Amortization of acquired intangibles


(205)


(206)


(410)


(409)

Less: Employer payroll taxes on employee stock transactions


(608)


(1,253)


(2,761)


(2,028)

Non-GAAP sales and marketing


$          156,991


$          120,112


$          299,983


$          241,091










GAAP general and administrative


$            47,558


$            42,671


$            92,848


$            84,992

Less: Stock-based compensation expense


(11,953)


(12,566)


(24,515)


(23,852)

Less: Employer payroll taxes on employee stock transactions


(1,521)


(1,143)


(3,578)


(2,108)

Non-GAAP general and administrative


$            34,084


$            28,962


$            64,755


$            59,032










Reconciliation of operating income (loss) and operating margin









GAAP operating income (loss)


$            12,618


$         (22,006)


$            24,614


$         (56,976)

Plus: Stock-based compensation expense


134,652


118,337


269,685


231,065

Plus: Amortization of acquired intangibles


1,486


2,270


3,718


4,489

Plus: Employer payroll taxes on employee stock transactions


8,786


7,865


24,007


14,258

Non-GAAP operating income


$          157,542


$          106,466


$          322,024


$          192,836

GAAP operating margin


2 %


(4) %


2 %


(6) %

Non-GAAP operating margin


24 %


21 %


26 %


19 %

 

Datadog, Inc.

Reconciliation from GAAP to Non-GAAP Results

(In thousands, except per share data; unaudited)




Three Months Ended

June 30,


Six Months Ended

June 30,



2024


2023


2024


2023

Reconciliation of net income (loss)









GAAP net income (loss)


$            43,824


$           (3,969)


$            86,455


$         (28,055)

Plus: Stock-based compensation expense


134,652


118,337


269,685


231,065

Plus: Amortization of acquired intangibles


1,486


2,270


3,718


4,489

Plus: Employer payroll taxes on employee stock transactions


8,786


7,865


24,007


14,258

Plus: Amortization of issuance costs


910


846


1,760


1,691

Non-GAAP net income before non-GAAP tax adjustments


$          189,658


$          125,349


$          385,625


$          223,448

Income tax effects and adjustments (1)


36,693


23,905


75,038


41,613

Non-GAAP net income after non-GAAP tax adjustments


$          152,965


$          101,444


$          310,587


$          181,835

Net income per share before non-GAAP tax adjustments - basic


$                0.57


$                0.39


$                1.16


$                0.70

Net income per share before non-GAAP tax adjustments - diluted


$                0.53


$                0.36


$                1.08


$                0.64










Net income per share after non-GAAP tax adjustments - basic


$                0.46


$                0.31


$                0.93


$                0.57

Net income per share after non-GAAP tax adjustments - diluted


$                0.43


$                0.29


$                0.87


$                0.52










Shares used in non-GAAP net income per share calculations:









Basic


334,941


322,215


333,373


320,788

Diluted


356,740


348,551


356,650


347,311



1)

Non-GAAP financial information for the periods shown are adjusted for an assumed provision for income taxes based on our long-term projected tax rate of 21%. Due to the differences in the tax treatment of items excluded from non-GAAP earnings, our estimated tax rate on non-GAAP income may differ from our GAAP tax rate and from our actual tax liabilities.

 

Datadog, Inc.

Reconciliation of GAAP Cash Flow from Operating Activities to Free Cash Flow

(In thousands; unaudited)




Three Months Ended

June 30,


Six Months Ended

June 30,



2024


2023


2024


2023

Net cash provided by operating activities


$     164,424


$     153,158


$     376,694


$     286,945

Less: Purchases of property and equipment


(4,415)


(2,339)


(18,573)


(11,078)

Less: Capitalized software development costs


(16,229)


(9,087)


(27,594)


(17,798)

Free cash flow


$     143,780


$     141,732


$     330,527


$     258,069

Free cash flow margin


22 %


28 %


26 %


26 %

 

Contact Information
Yuka Broderick
Datadog Investor Relations
IR@datadoghq.com

Dan Haggerty
Datadog Public Relations
Press@datadoghq.com

Datadog is a registered trademark of Datadog, Inc.

All product and company names herein may be trademarks of their registered owners.

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/datadog-announces-second-quarter-2024-financial-results-302217275.html

SOURCE Datadog, Inc.

FAQ

What was Datadog's Q2 2024 revenue?

Datadog's Q2 2024 revenue was $645 million, a 27% increase year-over-year.

How did Datadog's larger customer base change in Q2 2024?

Datadog's customers with ARR of $100k+ increased by 13% to about 3,390.

What is Datadog's Q3 2024 revenue guidance?

Datadog's Q3 2024 revenue guidance is between $660 million and $664 million.

What is Datadog's full-year 2024 revenue outlook?

Datadog's full-year 2024 revenue outlook is between $2.62 billion and $2.63 billion.

What were Datadog's GAAP and non-GAAP net incomes per share in Q2 2024?

Datadog's GAAP net income per share was $0.12, and non-GAAP net income per share was $0.43 in Q2 2024.

Datadog, Inc.

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