10-QPeriod: Q3 FY2024

Datadog, Inc. Quarterly Report for Q3 Ended Sep 30, 2024

Filed November 8, 2024For Securities:DDOG

Summary

Datadog, Inc. reported strong financial results for the third quarter of 2024, demonstrating continued growth and profitability. Revenue for the quarter reached $690.0 million, a 26% increase year-over-year, driven by both new customer acquisition and expansion within the existing customer base. The company achieved a net income of $51.7 million, a significant improvement from the prior year's comparable quarter. Key financial strengths include a robust balance sheet with substantial cash and marketable securities totaling approximately $3.2 billion as of September 30, 2024. Operating cash flow remained strong, indicating efficient cash generation from its core business. The company continues to invest in research and development and sales and marketing, reflecting its commitment to innovation and market expansion, while managing operating expenses effectively.

Financial Highlights

51 data points
Beta

Revenue

$690.02M

80.0% Gross Margin

Net Income

$51.70M

7.5% Net Margin

EPS (Diluted)

$0.14

Total Assets

$4.63B

Cash & Equivalents

$337.42M

Free Cash Flow

$220.30M

Financial Statements
Beta
Revenue$690.02M
Cost of Revenue$137.76M
Gross Profit$552.26M
R&D Expenses$291.80M
Operating Expenses$531.98M
Operating Income$20.28M
Interest Expense$1.15M
Net Income$51.70M
EPS (Basic)$0.15
EPS (Diluted)$0.14
Shares Outstanding (Basic)337.56M
Shares Outstanding (Diluted)357.63M

Key Highlights

  • 1Revenue for the three months ended September 30, 2024, was $690.0 million, a 26% increase year-over-year.
  • 2Net income for the quarter was $51.7 million, compared to $22.6 million in the same period of 2023.
  • 3Total assets grew to $4.63 billion as of September 30, 2024, with cash and cash equivalents and marketable securities totaling $3.2 billion.
  • 4Operating expenses increased by 19% year-over-year for the quarter, outpacing revenue growth slightly, but R&D and Sales & Marketing investments continue to drive future growth.
  • 5Dollar-based net retention rate for the trailing 12 months was in the mid-110%'s as of September 30, 2024, indicating healthy expansion within the existing customer base.
  • 6The company reported $1.82 billion in remaining performance obligations as of September 30, 2024, providing visibility into future revenue.

Frequently Asked Questions

Datadog reported revenue of $690.0 million for the three months ended September 30, 2024, representing a 26% increase compared to $547.5 million in the same period of 2023. This growth was attributed to both new customer acquisition (25%) and expansion from existing customers (75%).

Datadog's profitability improved significantly. Net income for the three months ended September 30, 2024, was $51.7 million, or $0.14 per diluted share, compared to a net income of $22.6 million, or $0.06 per diluted share, for the same period in 2023.

As of September 30, 2024, Datadog maintained a strong liquidity position with $337.4 million in cash and cash equivalents and $2.9 billion in marketable securities, totaling approximately $3.2 billion. The company generated $605.4 million in net cash from operating activities for the nine months ended September 30, 2024, and believes its current resources are sufficient to meet its cash requirements for the next 12 months and beyond.

Datadog has 0.125% convertible senior notes due 2025 with a principal amount of $747.5 million. As of September 30, 2024, the net carrying amount was $744.9 million, and these notes were classified as short-term debt. The company's ability to make payments depends on its future performance and cash flow.