New York-based Datadog is riding high on growth as it reports a near 50 percent growth and commendable profits after five quarterly losses. The company’s stock witnessed a notable surge of about 18 percent this Thursday. Datadog also reported its very first operating profit after five-quarter losses. Reports also show that the company expects a 47-49 percent growth in annual revenue indicating that brighter days are ahead for the company.
The What and Why
It seems like Datadog is at the end of a rather long and dark tunnel that was sequinned with appalling losses over the last five quarters. However, now the scene has changed for the better and the company is on the lane to growth and progress. The company’s expectations are strengthened by the 70 percent growth which was resourceful in helping the company touch the $1 billion mark in 2021 annual revenue.
With the growing demand for its SaaS platform, the company is aiming rather high with revenue and growth. It is estimated that the revenue for the current year will touch a figure between $1.51 billion and $1.53 billion. Datadog, which began its journey in the year 2010 is a monitoring and security platform that offer observability services for cloud-based applications. It is a monitoring and analytics tool that facilitates real-time observation which helps the customer to keep track of the entire technology stack.
The future trajectory of Datadog looks rather promising with quite a number of wins that have cemented its potential for growth and success. For instance, in the fourth quarter, the company’s revenue grew by an impressive 84 percent, thereby exceeding $326 million. In addition to this milestone, the past year also saw an increase in the number of customers with annual revenue of about $1 million. A major boost for the company which was of substantial help in enhancing its growth was the partnership with Amazon. The integration with Amazon Web Services which is the cloud computing unit of the company has a major role to play in the apparent growth of the company. In the words of Matthew Hedberg, RBC Capital Analyst,
“Results were highlighted by 84 percent revenue growth that accelerated vs. 75 percent last quarter and consensus at 64 percent, or a 12 percent beat, the largest quarterly beat since the third quarter of 2019 and a record on the absolute basis.”
It seems like the company is all set to gain momentum as far as the growth factor is concerned. The company expects to earn revenue between $334 million and $339 million this current quarter.
