Datadog Q3 earnings beat estimates, stock falls

Investing.com -- Datadog, Inc. (NASDAQ: DDOG) reported third-quarter earnings that surpassed analyst expectations, but its stock fell 2.6% premarket on Thursday following the release.

The cloud monitoring and security platform provider posted adjusted earnings per share of $0.46, beating the analyst consensus of $0.40. Revenue for the quarter came in at $690 million, up 26% YoY and exceeding the $665.05 million estimate.

Despite the strong quarterly performance, Datadog (NASDAQ:DDOG)'s stock declined. The company's full-year 2024 guidance of $1.75-$1.77 EPS and revenue of $2.656-2.66 billion, while above analyst expectations, may have disappointed some investors looking for more robust growth.

Olivier Pomel, co-founder and CEO of Datadog, commented on the results: "Datadog executed well in the third quarter, with 26% year-over-year revenue growth. We continued to broaden our platform to help our customers observe, secure, and act on their mission-critical cloud applications."

The company reported growth in its larger customer base, with approximately 3,490 customers generating annual recurring revenue of $100,000 or more, up from about 3,130 a year ago.

Datadog's cash position remained strong, with cash, cash equivalents, and marketable securities totaling $3.2 billion as of September 30, 2024. The company generated operating cash flow of $229 million and free cash flow of $204 million during the quarter.

For the fourth quarter of 2024, Datadog expects revenue between $709 million and $713 million, with non-GAAP operating income between $163 million and $167 million.