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ROCE Insights For Datadog

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Benzinga Insights
·2 min read
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Datadog (NASDAQ: DDOG) showed a loss in earnings since Q1, totaling $654.00 thousand. Sales, on the other hand, increased by 6.68% to $140.01 million during Q2. In Q1, Datadog earned $3.78 million and total sales reached $131.25 million.

What Is ROCE?

Changes in earnings and sales indicate shifts in Datadog’s Return on Capital Employed, a measure of yearly pre-tax profit relative to capital employed in a business. Generally, a higher ROCE suggests successful growth in a company and is a sign of higher earnings per share for shareholders in the future. In Q2, Datadog posted an ROCE of 0.0%.

It is important to keep in mind ROCE evaluates past performance and is not used as a predictive tool. It is a good measure of a company's recent performance, but several factors could affect earnings and sales in the near future.

View more earnings on DDOG

ROCE is an important metric for the comparison of similar companies. A relatively high ROCE shows Datadog is potentially operating at a higher level of efficiency than other companies in its industry. If the company is generating high profits with its current level of capital, some of that money can be reinvested in more capital which will lead to higher returns and earnings per share growth.

For Datadog, the return on capital employed ratio shows the number of assets can actually help the company achieve higher returns, an important note investors will take into account when gauging the payoff from long-term financing strategies.

Q2 Earnings Insight

Datadog reported Q2 earnings per share at $0.05/share, which beat analyst predictions of $0.01/share.

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