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Datadog 8-K Report, Financial Results (Nov 7, 2024)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed November 7, 2024
Period End
November 7, 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 November 7, 2024. Cited figures are marked; the original filing is the authoritative source.

Datadog reported third quarter 2024 results on November 7, 2024, with revenue of $690 milliona, up 26% year-over-year from $547.5 million.

Growth was driven in part by larger customers: the company had about 3,490 customers with ARR of $100,000b or more, up 12% from about 3,130 a year earlier. Profitability was solid on a non-GAAP basis, with non-GAAP operating income of $173 million (25% margin) and non-GAAP diluted EPS of $0.46. GAAP operating income was $20 million (3% margin), and GAAP diluted EPS was $0.14, with stock-based compensation of $142 million the main gap between the two measures.

Cash generation was strong. Operating cash flow was $229 millionc and free cash flow was $204 million (30% margin) in the quarter. Cash, cash equivalents and marketable securities totaled $3.2 billion at September 30, 2024.

Deferred revenue and accounts receivable both moved in ways worth watching, with deferred revenue down $1.4 milliond sequentially-to-period in the quarter's cash flow line and receivables down, but overall working capital remained healthy. Looking forward, Datadog guided Q4 2024 revenue to $709-713 million and full-year 2024 revenue to $2.656-2.660 billion, with non-GAAP EPS of $0.42-0.44 for Q4 and $1.75-1.77 for the full year.

The company did not provide GAAP reconciliations for its guidance because of variability in stock-based compensation and payroll tax items. Investors should weigh the strong top-line growth and cash flow against the large gap between GAAP and non-GAAP profitability, which is driven by equity compensation.

02—Key points

Key Highlights

  1. Q3 2024 revenue of $690.0 million, up 26% year-over-year from $547.5 million
  2. About 3,490 customers with ARR of $100,000+, up 12% from about 3,130 a year earlier
  3. Non-GAAP operating income of $173.0 million (25% margin) versus GAAP operating income of $20.3 million (3% margin)
  4. GAAP diluted EPS of $0.14 versus non-GAAP diluted EPS of $0.46; stock-based compensation was $142.2 million in the quarter
  5. Operating cash flow of $228.7 million and free cash flow of $203.6 million (30% margin)
  6. Cash, cash equivalents and marketable securities of $3.2 billion at September 30, 2024, with $1.6 billion in convertible notes on the balance sheet
  7. Q4 2024 revenue guidance of $709-713 million and full-year 2024 revenue guidance of $2.656-2.660 billion

03—Questions

Frequently Asked Questions

  1. How fast is Datadog growing and is growth accelerating?

    Q3 2024 revenue grew 26% year-over-year to $690.0 million. Nine-month revenue reached $1.95 billion, up about 27% from $1.54 billion a year earlier. The filing does not give prior-quarter growth, so acceleration or deceleration cannot be confirmed from this document alone.

  2. Why is GAAP profitability so much lower than non-GAAP profitability?

    The main reconciling item is stock-based compensation, which was $142.2 million in Q3 2024, about 21% of revenue. Amortization of acquired intangibles and employer payroll taxes on equity plans add further adjustments. Stock-based compensation is a real cost to shareholders through dilution, so investors often weigh GAAP results more heavily when judging profitability.

  3. Is Datadog generating enough cash to fund its operations?

    Yes. Operating cash flow was $228.7 million in Q3 2024 and $605.4 million for the first nine months. Free cash flow was $534.1 million year-to-date, a 27% margin, up from $396.3 million a year earlier. Cash and marketable securities totaled $3.2 billion.

  4. What does the company expect for the rest of 2024?

    Datadog guided Q4 2024 revenue to $709-713 million and full-year 2024 revenue to $2.656-2.660 billion. It guided Q4 non-GAAP EPS to $0.42-0.44 and full-year non-GAAP EPS to $1.75-1.77. Guidance is based on information as of November 7, 2024, and is subject to the risks described in the forward-looking statements section.

  5. What are the key balance sheet considerations?

    Convertible senior notes of about $745 million were reclassified to current liabilities, as they mature in 2025 and carry a 0.125% coupon. Against this, the company held about $3.2 billion in cash and marketable securities, so the notes appear well covered. Shareholders' equity rose to $2.63 billion, largely from additional paid-in capital growth tied to stock compensation.

04—Continue

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