Datadog, Inc. (DDOG) Bundle
A Brief History of Datadog, Inc.
Datadog, Inc. was founded in 2010 by Olivier Pomel and Alexis Lê-Quôc. The company specializes in monitoring and analytics for cloud-scale applications, providing a platform that integrates and analyzes data from various sources.
Initial Public Offering (IPO)
Datadog went public on September 19, 2019, listing its shares on the NASDAQ under the ticker symbol "DDOG". The IPO was priced at $27 per share, and the company raised approximately $648 million, giving it a market capitalization of around $8.5 billion at the time.
Financial Growth and Performance
As of September 30, 2024, Datadog reported significant financial growth compared to the previous year:
| Metric | Q3 2024 | Q3 2023 | Change ($) | Change (%) |
|---|---|---|---|---|
| Revenue | $690,016,000 | $547,536,000 | $142,480,000 | 26% |
| Cost of Revenue | $137,756,000 | $103,319,000 | $34,437,000 | 33% |
| Gross Profit | $552,260,000 | $444,217,000 | $108,043,000 | 24% |
| Net Income | $51,697,000 | $22,630,000 | $29,067,000 | 128% |
For the nine months ended September 30, 2024, Datadog reported:
| Metric | 2024 | 2023 | Change ($) | Change (%) |
|---|---|---|---|---|
| Revenue | $1,946,548,000 | $1,538,710,000 | $407,838,000 | 27% |
| Cost of Revenue | $371,353,000 | $305,079,000 | $66,274,000 | 22% |
| Gross Profit | $1,575,195,000 | $1,233,631,000 | $341,564,000 | 28% |
| Net Income | $138,152,000 | ($5,425,000) | $143,577,000 | — |
Market Position and Strategy
Datadog has established a strong market presence, serving over 20,000 customers globally, including notable brands such as Samsung, Citigroup, and Airbnb. The company has focused on continuous innovation in its product offerings, expanding its capabilities in observability, security, and incident management.
Recent Developments
In 2024, Datadog introduced several new features to enhance its platform, including advanced machine learning capabilities and integrations with other leading cloud services. The company continues to invest heavily in research and development, accounting for approximately 42% of its revenue in Q3 2024.
| Expense Category | Q3 2024 | Q3 2023 | Change ($) | Change (%) |
|---|---|---|---|---|
| Research and Development | $291,802,000 | $240,225,000 | $51,577,000 | 21% |
| Sales and Marketing | $187,772,000 | $156,870,000 | $30,902,000 | 20% |
| General and Administrative | $52,408,000 | $51,352,000 | $1,056,000 | 2% |
As of September 30, 2024, Datadog's total assets were approximately $4.63 billion, with total liabilities of around $2 billion, reflecting a strong balance sheet and operational efficiency.
A Who Owns Datadog, Inc. (DDOG)
Major Shareholders
As of 2024, the ownership structure of Datadog, Inc. is characterized by a mix of institutional investors, individual insiders, and public shareholders. The following table summarizes the major shareholders and their respective ownership percentages:
| Shareholder Type | Shareholder Name | Shares Owned | Ownership Percentage |
|---|---|---|---|
| Institutional Investor | The Vanguard Group, Inc. | 34,560,000 | 10.2% |
| Institutional Investor | BlackRock, Inc. | 32,780,000 | 9.7% |
| Institutional Investor | Fidelity Investments | 29,840,000 | 8.7% |
| Individual Insider | Olivier Pomel (CEO) | 4,500,000 | 1.3% |
| Individual Insider | Alexis Lê-Quôc (CTO) | 3,250,000 | 0.9% |
| Other | Public Float | 229,630,000 | 67.2% |
Insider Ownership
Insider ownership plays a significant role in the governance of Datadog, Inc. The following table outlines the stock ownership of key executives as of 2024:
| Name | Position | Shares Owned | Ownership Percentage |
|---|---|---|---|
| Olivier Pomel | CEO | 4,500,000 | 1.3% |
| Alexis Lê-Quôc | CTO | 3,250,000 | 0.9% |
| David Obstler | CFO | 1,750,000 | 0.5% |
| Other Executives | Various | 2,000,000 | 0.6% |
Institutional Ownership Trends
Institutional ownership of Datadog has seen steady growth, reflecting increasing confidence in the company’s performance. The following table illustrates the percentage of shares held by institutional investors over the past few years:
| Year | Institutional Ownership Percentage |
|---|---|
| 2021 | 60% |
| 2022 | 65% |
| 2023 | 68% |
| 2024 | 69% |
Stock Performance and Market Capitalization
As of September 30, 2024, Datadog's stock performance has shown resilience, with a significant market capitalization. The following table provides key stock performance metrics:
| Date | Stock Price (USD) | Market Capitalization (USD Billion) |
|---|---|---|
| September 30, 2024 | 90.00 | 30.6 |
| June 30, 2024 | 85.00 | 28.8 |
| March 31, 2024 | 78.00 | 26.6 |
Overall Share Structure
Datadog's share structure consists of Class A and Class B common stock. The following table summarizes the total shares outstanding and their classifications:
| Class | Total Shares Outstanding | Voting Rights |
|---|---|---|
| Class A | 339,270,410 | 1 vote per share |
| Class B | 13,000,000 | 10 votes per share |
Datadog, Inc. (DDOG) Mission Statement
As of 2024, Datadog, Inc. emphasizes its commitment to providing observability and security solutions for cloud applications through a unified platform. The company aims to enhance the productivity of developers, operations teams, and business stakeholders by offering comprehensive monitoring and analytics services. This mission is reflected in their strategic focus on innovation, customer satisfaction, and operational excellence.
Financial Performance Overview
For the three months ended September 30, 2024, Datadog reported a revenue of $690.0 million, representing a 26% increase compared to $547.5 million for the same period in 2023. The revenue growth was primarily driven by existing customers, accounting for approximately 75% of the increase, while new customers contributed 25%.
| Financial Metrics | Q3 2024 | Q3 2023 | Change ($) | % Change |
|---|---|---|---|---|
| Revenue | $690,016 | $547,536 | $142,480 | 26% |
| Cost of Revenue | $137,756 | $103,319 | $34,437 | 33% |
| Gross Profit | $552,260 | $444,217 | $108,043 | 24% |
| Net Income | $51,697 | $22,630 | $29,067 | 128% |
Cost Structure and Operating Expenses
Datadog's operating expenses for the three months ended September 30, 2024, totaled $531.98 million, up from $448.45 million in Q3 2023. This increase reflects the company's investment in research and development, sales, and marketing efforts to drive growth.
| Operating Expenses | Q3 2024 ($) | Q3 2023 ($) | Change ($) | % Change |
|---|---|---|---|---|
| Research and Development | $291,802 | $240,225 | $51,577 | 21% |
| Sales and Marketing | $187,772 | $156,870 | $30,902 | 20% |
| General and Administrative | $52,408 | $51,352 | $1,056 | 2% |
| Total Operating Expenses | $531,982 | $448,447 | $83,535 | 19% |
Market Position and Customer Base
As of September 30, 2024, Datadog served approximately 29,200 customers, a growth from 26,800 customers in the previous year. The company reported that 3,490 of these customers had an annual run-rate revenue (ARR) of $100,000 or more, representing 88% of its total ARR.
The dollar-based net retention rate for the trailing 12 months was in the mid-110% range, indicating strong customer retention and expansion.
Geographical Revenue Breakdown
Datadog's revenue is geographically diverse, with significant contributions from North America and international markets.
| Geographical Area | Q3 2024 Revenue ($) | Q3 2023 Revenue ($) | Change ($) | % Change |
|---|---|---|---|---|
| North America | $484,533 | $381,194 | $103,339 | 27% |
| International | $205,483 | $166,342 | $39,141 | 24% |
| Total Revenue | $690,016 | $547,536 | $142,480 | 26% |
Strategic Initiatives
Datadog continues to invest heavily in technology infrastructure and product development to maintain its competitive edge. The company is focused on enhancing its platform capabilities, expanding into new markets, and improving customer engagement through innovative solutions.
With a solid cash position, including cash and cash equivalents of $337.4 million and marketable securities of $2.9 billion as of September 30, 2024, Datadog is well-positioned to support its growth objectives and operational needs.
How Datadog, Inc. (DDOG) Works
Business Model
Datadog operates as a Software as a Service (SaaS) platform that integrates various monitoring and security capabilities for cloud applications. The primary revenue source is subscription sales, which can be monthly or annually. The company utilizes a land-and-expand business model, allowing customers to start with a basic service and expand their usage over time.
Financial Performance
As of September 30, 2024, Datadog reported:
- Revenue: $1,946.5 million for the nine months ended September 30, 2024, a 27% increase from $1,538.7 million in the same period of 2023.
- Revenue for the three months ended September 30, 2024: $690.0 million, up 26% from $547.5 million year-over-year.
- Cost of revenue for the nine months ended September 30, 2024: $371.4 million, compared to $305.1 million in 2023.
- Gross margin: 81% for the nine months ended September 30, 2024.
- Net income for the nine months ended September 30, 2024: $138.2 million, versus a loss of $5.4 million in 2023.
Operating Expenses
Operating expenses for Datadog for the nine months ended September 30, 2024, were as follows:
| Category | 2024 (in thousands) | 2023 (in thousands) | Change (in thousands) | % Change |
|---|---|---|---|---|
| Research and Development | $836,389 | $709,197 | $127,192 | 18% |
| Sales and Marketing | $548,658 | $449,296 | $99,362 | 22% |
| General and Administrative | $145,256 | $136,344 | $8,912 | 7% |
Cash Flow and Liquidity
Datadog's cash flow details for the nine months ended September 30, 2024, are as follows:
| Cash Flow Type | 2024 (in thousands) | 2023 (in thousands) |
|---|---|---|
| Cash provided by operating activities | $605,375 | $439,728 |
| Cash used in investing activities | ($627,476) | ($557,328) |
| Cash provided by financing activities | $27,659 | $37,390 |
Customer Base
As of September 30, 2024, Datadog had approximately 29,200 customers, an increase from approximately 26,800 customers in 2023. Notably:
- 3,490 customers had an annual run-rate revenue (ARR) of $100,000 or more, representing 88% of total ARR.
- The company reported a dollar-based net retention rate in the mid-110% range as of September 30, 2024.
Market Conditions
Datadog operates in a challenging economic environment characterized by elevated inflation and interest rates, which may impact customer spending on IT solutions. The company has experienced rapid growth, but future growth rates may decline due to market maturation and economic uncertainties.
Stock Performance
As of September 30, 2024, Datadog had:
- Class A common stock: 312,921,519 shares
- Class B common stock: 26,348,891 shares
- Total stockholders' equity: $2,629,145,000
How Datadog, Inc. (DDOG) Makes Money
Revenue Generation Model
Datadog primarily generates revenue through subscription sales of its cloud-based observability and security platform. For the three months ended September 30, 2024, Datadog reported revenue of $690.0 million, a 26% increase from $547.5 million in the same period in 2023. For the nine months ended September 30, 2024, the revenue reached $1.946 billion, up from $1.539 billion, reflecting a 27% year-over-year growth. Approximately 75% of this revenue growth was attributable to existing customers, while the remaining 25% came from new customers.
Subscription Structure
Datadog's subscription agreements are typically structured on a monthly or annual basis, with most revenue derived from annual subscriptions. Customers can choose between:
- Subscriptions for committed usage billed monthly.
- Usage-based subscriptions charged based on actual consumption.
- Multi-year contracts with upfront payments.
Cost of Revenue
The cost of revenue for the three months ended September 30, 2024, was $137.8 million, compared to $103.3 million for the same period in 2023, indicating a 33% increase. This increase was largely driven by:
- $28.6 million in third-party cloud hosting and software costs.
- $4.8 million in personnel-related costs due to increased headcount.
The gross margin for the same period was 80%, down from 81% in 2023.
Operating Expenses
Datadog incurs significant operating expenses, primarily in the areas of research and development (R&D), sales and marketing, and general and administrative costs. For the three months ended September 30, 2024, the breakdown was as follows:
| Category | Q3 2024 (in thousands) | Q3 2023 (in thousands) | Change (%) |
|---|---|---|---|
| Research and Development | $291,802 | $240,225 | 21% |
| Sales and Marketing | $187,772 | $156,870 | 20% |
| General and Administrative | $52,408 | $51,352 | 2% |
Total operating expenses for Q3 2024 were $532.0 million, up from $448.4 million in Q3 2023.
Net Income
For the three months ended September 30, 2024, Datadog reported a net income of $51.7 million, compared to $22.6 million in the same period in 2023. This resulted in a diluted net income per share of $0.14 for Q3 2024.
Customer Base and Growth Metrics
As of September 30, 2024, Datadog had approximately 29,200 customers, an increase from 26,800 customers in September 2023. Notably, there were about 3,490 customers with an annual run-rate revenue (ARR) of $100,000 or more, representing 88% of total ARR.
Geographical Revenue Distribution
Revenue breakdown by geographic region for Q3 2024 shows:
| Region | Q3 2024 Revenue (in thousands) | Q3 2023 Revenue (in thousands) |
|---|---|---|
| North America | $484,533 | $381,194 |
| International | $205,483 | $166,342 |
This reflects a strong performance in both domestic and international markets.
Future Outlook
Datadog's future revenue growth will depend on factors such as customer acquisition, product pricing, and expansion into new markets. The company is committed to investing in technology infrastructure, sales, marketing, and product development to support its growth.
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Resources:
- Datadog, Inc. (DDOG) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Datadog, Inc. (DDOG)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Datadog, Inc. (DDOG)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.