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Datadog 8-K Report, Financial Results (Aug 8, 2024)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed August 8, 2024
Period End
August 8, 2024
Security
DDOG
In the record · 2019–202610-K710-Q218-K44

DDOG filed 7 annual reports (10-K), 21 quarterly reports (10-Q) and 44 current reports (8-K) between 2019 and 2026.

  1. Material agreement8-K · Jun ’20Jun ’20
  2. Leadership change8-K · Mar ’26Mar ’26

01—Abstract

Summary

Summary of the 8-K filed August 8, 2024. Cited figures are marked; the original filing is the authoritative source.

Datadog reported second quarter 2024 results on August 8, 2024, with revenue of $645.3 milliona, up 27% year-over-year from $509.5 million.

Growth was broad-based across larger customers, with about 3,390 customers at $100Kb+ ARR, up 13% from about 2,990 a year earlier. Profitability improved meaningfully: GAAP operating income was $12.6 million (2% margin) versus a $22.0 million loss a year ago, and non-GAAP operating income was $157.5 million (24% margin, up from 21%). GAAP net income was $43.8 million, or $0.12 per diluted share, and free cash flow was $143.8 million (22% margin), compared with $141.7 million in the prior-year quarter.

The company raised its outlook. For Q3 2024, it guided to revenue of $660c-664 million and non-GAAP operating income of $146-150 million. For full year 2024, it guided to revenue of $2.62-2.63 billion, non-GAAP operating income of $620-630 million, and non-GAAP EPS of $1.62-1.66 on roughly 360 million diluted shares.

Because the Q3 revenue guide implies sequential growth of only about 2-3%, and the Q3 non-GAAP operating income guide is below Q2's level, investors may look closely at margin trajectory and the pace of customer growth in coming quarters. On the balance sheet, cash, cash equivalents and marketable securities totaled $3.0 billiond at June 30, 2024. The $747.5 million of 0.125% convertible senior notes due 2025 moved to current liabilities, a reclassification that reflects their maturity approaching within twelve months.

Operating cash flow was $164.4 million in the quarter. Accounts receivable rose sharply to $533.3 million, and the filing discloses product launches at DASH 2024, including general availability of LLM Observability and Data Jobs Monitoring, along with new leadership hires. Note that the GAAP-to-non-GAAP guidance reconciliation is not provided, as management cited uncertainty in stock-based compensation and related payroll taxes.

02—Key points

Key Highlights

  1. Revenue of $645.3M grew 27% YoY, up from $509.5M in Q2 2023.
  2. Customers with ARR of $100K+ reached about 3,390, up 13% from about 2,990 a year earlier, signaling continued upmarket traction.
  3. GAAP operating income turned positive at $12.6M (2% margin) versus a $22.0M loss in Q2 2023; GAAP net income was $43.8M ($0.12 diluted EPS).
  4. Non-GAAP operating margin expanded to 24% from 21%, and non-GAAP operating income reached $157.5M.
  5. Free cash flow of $143.8M (22% margin) was roughly flat year-over-year in dollar terms, though its margin declined from 28%.
  6. Raised full-year 2024 revenue guidance to $2.62-2.63B and non-GAAP operating income guidance to $620-630M; Q3 revenue guided to $660-664M.
  7. Cash, cash equivalents and marketable securities of $3.0B, with the $747.5M convertible notes now classified as current due to 2025 maturity.

03—Questions

Frequently Asked Questions

  1. How strong was Datadog's revenue growth in Q2 2024?

    Revenue grew 27% year-over-year to $645.3 million, up from $509.5 million in Q2 2023. Growth was supported by customer expansion, with customers spending $100K+ ARR rising 13% to about 3,390.

  2. Did Datadog become profitable in the quarter?

    On a GAAP basis, yes. Operating income was $12.6 million (2% margin) compared with a $22.0 million loss a year earlier, and net income was $43.8 million, or $0.12 per diluted share. On a non-GAAP basis, operating margin was 24%, up from 21%.

  3. What did Datadog guide for the rest of 2024?

    For Q3 2024, the company guided to revenue of $660-664 million and non-GAAP operating income of $146-150 million. For full-year 2024, it guided to revenue of $2.62-2.63 billion, non-GAAP operating income of $620-630 million, and non-GAAP EPS of $1.62-1.66.

  4. Why is the Q3 guidance a potential concern for investors?

    The Q3 revenue midpoint implies only about 2-3% sequential growth from Q2, and the Q3 non-GAAP operating income guide of $146-150 million is below Q2's $157.5 million. Investors may watch whether this reflects seasonality, investment timing, or a slowdown in growth momentum.

  5. How is Datadog's balance sheet and liquidity position?

    The company held $3.0 billion in cash, cash equivalents and marketable securities at June 30, 2024. Its $747.5 million of 0.125% convertible senior notes due 2025 are now classified as current liabilities, so repayment or refinancing will become a near-term consideration, though liquidity comfortably covers it. Operating cash flow was $164.4 million in the quarter.

04—Continue

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