Datadog Q3 2024 $DDOG (+5%)
Financial results
- Revenue: Datadog reported revenue of $690 million in Q3 2024, an increase of 26% compared to the same period last year.
- Net income: GAAP net income was $51.7 million, compared to $22.6 million in the third quarter of 2023.
- Non-GAAP net income: Non-GAAP net income amounted to USD 165.7 million.
Balance sheet overview
- Total assets: As of September 30, 2024, total assets were $4.63 billion, compared to $3.94 billion at the end of 2023.
- Total liabilities: Total liabilities were US$2.00 billion.
- Equity: Equity increased from USD 2.03 billion to USD 2.63 billion.
Details of the income statement
- Operating income: GAAP operating income was $20 million, representing a GAAP operating margin of 3%.
- Non-GAAP operating income: Non-GAAP operating income was $173 million, with a non-GAAP operating margin of 25%.
Cash flow overview
- Operating cash flow: Net cash flow from operating activities amounted to USD 228.7 million in the third quarter of 2024.
- Free cash flow: Free cash flow amounted to USD 203.6 million, which corresponds to a free cash flow margin of 30%.
Key figures and profitability metrics
- Free cash flow margin: This increased year-on-year from 25% to 30%.
- Non-GAAP net income margin: Non-GAAP net income per diluted share was USD 0.46.
Segment information
- Customer growth: The number of customers with an annual revenue volume (ARR) of USD 100,000 or more increased by 12% to around 3,490.
Competitive position
Datadog was recognized as a Leader in Observability Platforms and Digital Experience Monitoring in the 2024 Gartner Magic Quadrant.
Management forecasts and comments
Management emphasized the strong growth with larger customers and the expansion of platform functions.
Risks and opportunities
- Risks: Competition, potential security breaches and rapid technological change represent potential risks.
- Opportunities: Growth opportunities exist in the expansion of cloud applications and digital transformation.
Summary of the results
Strong elements
- Significant revenue growth of 26% year-on-year
- Increase in the number of valuable customers with high ARR
- Strong improvement in free cash flow margin
- Recognition as a leading provider in relevant industry reports
- Solid increase in equity
Weak elements
- Low GAAP operating margin of only 3%
- High share-based remuneration expenses weigh on net result
- Continued competitive pressure and rapid technological changes as risks
- Potential impact of global tax environment on future tax rates
- High amortization of acquired intangible assets
