Datadog, Inc. (NASDAQ:DDOG), the monitoring and security platform for cloud applications, today announced financial results for its second quarter ended June 30, 2023.
“We continued to execute well in the second quarter, with 25% year-over-year revenue growth, strong new logo bookings, continued customer growth, and increased multi-product adoption by our customers,” said Olivier Pomel, co-founder and CEO of Datadog.
Pomel added, “Last week at our annual user conference, DASH, we announced dozens of new products and capabilities, showcasing our rapid innovation at scale. We launched new AI offerings including LLM Observability, the Bits AI assistant, and over a dozen new AI-related integrations. And we broadened our platform across Observability, Cloud Security, Developer Experience, and Cost Optimization use cases.”
Second Quarter 2023 Financial Highlights:
- Revenue was $509.5 million, an increase of 25% year-over-year.
- GAAP operating loss was $(22.0) million; GAAP operating margin was (4)%.
- Non-GAAP operating income was $106.5 million; non-GAAP operating margin was 21%.
- GAAP net loss per diluted share was $(0.01); non-GAAP net income per diluted share was $0.36.
- Operating cash flow was $153.2 million, with free cash flow of $141.7 million.
- Cash, cash equivalents, and marketable securities were $2.2 billion as of June 30, 2023.
Second Quarter & Recent Business Highlights:
- As of June 30, 2023, we had about 2,990 customers with ARR of $100,000 or more, an increase of 24% from about 2,420 as of June 30, 2022.
- Announced a new Large Language Model (LLM) observability solution and over a dozen new integrations, to enable organizations building their LLM-based applications to monitor and troubleshoot Large Language Model stacks.
- Announced Bits AI, a new Generative AI-based assistant that learns from customers’ observability data and helps engineers resolve application issues in real time.
- Announced Historical Investigations with Cloud SIEM, with new detection and exploration capabilities so security teams can conduct historical investigations and uncover threats hidden within their cloud and IT environments.
- Announced the general availability of Security Inbox for Cloud Security Management, a new capability for Security and DevOps engineers to prioritize and remediate the most important security issues impacting their production applications.
- Announced the general availability of Intelligent Test Runner, which helps save developer time and minimize failures in organizations’ CI/CD pipelines by automatically selecting and running only the tests that are relevant to code changes.
- Launched Flex Logs for Log Management. Built on top of Datadog’s Husky technology, Flex Logs enables organizations to keep high-volume logs for long periods of time.
- Named a leader in the 2023 Gartner Magic Quadrant for Application Performance Monitoring and Observability. This is the third year in a row Gartner has positioned Datadog as a Leader in its Magic Quadrant.
- Extended new capabilities for Cloud Cost Management including container cost allocation, cost monitors and support for Microsoft Azure.
- Announced the general availability of Workflow Automation. This new product enables teams to automate end-to-end remediation processes – with out-of-the-box actions and pre-built templates – across all systems, apps and services to help identify, investigate and resolve service disruptions and security threats faster.
- Released new capabilities and integrations for Microsoft Azure at Microsoft Build, including support for Azure OpenAI Service, Azure Arc, Cloudcraft for Azure and Cloud Cost Management for Azure.
- Announced an integration that monitors OpenAI API usage patterns, costs and performance for various OpenAI models, including GPT-4 and other completion models.
Third Quarter and Full Year 2023 Outlook:
Based on information as of today, August 8, 2023, Datadog is providing the following guidance:
- Third Quarter 2023 Outlook:
- Revenue between $521 million and $525 million.
- Non-GAAP operating income between $98 million and $102 million.
- Non-GAAP net income per share between $0.33 and $0.35, assuming approximately 354 million weighted average diluted shares outstanding.
- Full Year 2023 Outlook:
- Revenue between $2.05 billion and $2.06 billion.
- Non-GAAP operating income between $390 million and $400 million.
- Non-GAAP net income per share between $1.30 and $1.34, assuming approximately 351 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.
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, real-user monitoring, 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.
