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Sep 30, 2020
Datadog Q3 2020 Earnings Report
Reported strong results, demonstrating continued high growth at scale and extended leadership as the most complete and cloud native end-to-end observability platform.
Key Takeaways
Datadog announced strong third-quarter results with revenue increasing by 61% year-over-year to $154.7 million. The company saw significant growth in larger customers, with 1,107 having ARR of $100,000 or more, up from 727 the previous year. Additionally, eight new products and features were unveiled at the annual Dash conference, alongside strategic partnerships with Microsoft and Google.
Revenue was $154.7 million, an increase of 61% year-over-year.
GAAP operating loss was ($9.3) million; GAAP operating margin was (6%).
Non-GAAP operating income was $13.8 million; non-GAAP operating margin was 9%.
Operating cash flow was $36.3 million, with free cash flow of $28.6 million.
Forward Guidance
Datadog is providing the following guidance for the fourth quarter and full year 2020:
Positive Outlook
- Fourth Quarter 2020 Revenue between $162 million and $164 million.
- Fourth Quarter 2020 Non-GAAP operating income between $3 million and $5 million.
- Fourth Quarter 2020 Non-GAAP net income per share between $0.01 and $0.02, assuming approximately 335 million weighted average diluted shares outstanding.
- Full Year 2020 Revenue between $588 million and $590 million.
- Full Year 2020 Non-GAAP operating income between $48.5 and $50.5 million.
Challenges Ahead
- 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 reconciling items.
- Reconciling items such as stock-based compensation and employer payroll taxes on equity incentive plans.
- Reconciliation is not available without unreasonable effort.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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