Datadog (DDOG) Reports Q3: Everything You Need To Know Ahead Of Earnings
Cloud monitoring software company Datadog (NASDAQ:DDOG) will be reporting results tomorrow before the bell. Here's what investors should know.
Last quarter Datadog reported revenues of $509.5 million, up 25.4% year on year, beating analyst revenue expectations by 1.7%. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and full-year. The company added 80 enterprise customers paying more than $100,000 annually to a total of 2,990.
Is Datadog buy or sell heading into the earnings? Read our full analysis here, it's free.
This quarter analysts are expecting Datadog's revenue to grow 20.1% year on year to $524.2 million, slowing down from the 61.4% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.34 per share.
Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company has a history of exceeding Wall St's expectations, beating revenue estimates every single time over the past two years on average by 6.2%.
Looking at Datadog's peers in the software development segment, some of them have already reported Q3 earnings results, giving us a hint of what we can expect. Dynatrace delivered top-line growth of 25.9% year on year, beating analyst estimates by 2.1% and JFrog reported revenues up 23.1% year on year, exceeding estimates by 1.2%. Dynatrace traded up 9.0% on the results, JFrog was up 10.8%.
Read our full analysis of Dynatrace's results here and JFrog's results here.
The whole tech sector has been facing a sell-off and while some of the software development stocks have fared somewhat better, they have not been spared, with share price declining 2.7% over the last month. Datadog is down 9.2% during the same time, and is heading into the earnings with analyst price target of $104.5, compared to share price of $82.4.
One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.
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The author has no position in any of the stocks mentioned.
