Datadog announced financial results for its third quarter ended September 30, 2021. 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.
Third quarter 2021 highlights
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.
Third Quarter 2021 Financial Highlights
- Revenue was $270.5 million, an increase of 75% year-over-year.
- GAAP operating loss was $(4.9) million; GAAP operating margin was (2)%.
- Non-GAAP operating income was $44.0 million; non-GAAP operating margin was 16%.
- GAAP net loss per diluted share was $(0.02); non-GAAP net income per diluted share was $0.13.
- Operating cash flow was $67.4 million, with free cash flow of $57.1 million.
- Cash, cash equivalents, restricted cash, and marketable securities were $1.5 billion as of September 30, 2021.
Third Quarter & Recent Business Highlights
- As of September 30, 2021, we had 1,800 customers with ARR of $100,000 or more, an increase of 66% from 1,082 as of September 30, 2020.
- Announced ten new products and features at our annual user conference, Dash. Product announcements included:
- The general availability of CI Visibility, to help customers gain visibility into their developer tests and pipelines.
- The general availability of Session Replay, a new product in our Real User Monitoring suite, through which customers can watch individual user sessions using a video-like interface.
- The general availability of Funnel Analysis, to track user behavior through conversion funnels.
- The general availability of Network Device Monitoring, enabling customers to automatically discover and monitor on-premise network devices and appliances.
- The general availability of Datadog Apps, which allows partners to add new functionality and deeper integrations to the Datadog platform, including new visualizations and custom interactions.
- The introduction of Online Archives for Log Management, a warehousing solution with long-term archival and online query capabilities.
- The private beta launch of Cloud Cost Management, to help our customers control costs for their rapidly growing cloud and container environments.
- Official Datadog support of Vector, an open-source tool that allows users to collect, enrich, and transform observability data, and automatically route it to the destination of their choice.
- The private beta launch of Observability Pipelines, which will include enterprise-class capability for Vector, and the ability for end users to control it remotely using Datadog while running on their premises or their cloud accounts.
- The private beta launch of Universal Service Monitoring, to track performance of all applications and services without requiring custom code or instrumentation.
- The private beta launch of Application Security, a product within our Cloud Security Platform, to monitor attacks and correlate them with application traces.
- Announced the general availability of Database Monitoring. With insights into query performance and explain plans, as well as automatic correlation of query metrics with application and infrastructure metrics, Database Monitoring provides engineers and database administrators the visibility they need to quickly find and fix application performance issues that arise from slow running database queries.
Fourth Quarter and Full Year 2021 Outlook
Based on information as of today, November 4, 2021, Datadog is providing the following guidance:
- Fourth Quarter 2021 Outlook:
- Revenue between $290 million and $292 million.
- Non-GAAP operating income between $38 million and $40 million.
- Non-GAAP net income per share between $0.11 and $0.12, assuming approximately 347 million weighted average diluted shares outstanding.
- Full Year 2021 Outlook:
- Revenue between $993 million and $995 million.
- Non-GAAP operating income between $133 million and $135 million.
- Non-GAAP net income per share between $0.39 and $0.40, assuming approximately 344 million weighted average diluted shares outstanding.