Datadog, Inc.: Sales Capacity & Strategic Market Penetration Driving Our ‘Outperform’ Rating!

Datadog’s third quarter 2024 financial results indicate continued growth and expansion in their operations, though there are a mix of positive and challenging elements to consider. Revenue for the quarter was $690 million, representing a 26% increase year-over-year and surpassing the high end of the company’s guidance. The company added about 2,400 customers over the past year, reaching a total of approximately 29,200. The number of customers generating annual recurring revenue (ARR) of $100,000 or more rose to 3,490, hence contributing about 88% of the ARR. Datadog managed to generate a free cash flow of $204 million, reflecting a margin of 30%. These figures highlight strong growth and the essential role Datadog’s platform plays for businesses, especially in large enterprises where spending increased.