Datadog Tops Estimates, Posts Light Billings

Datadog says pandemic is continuing to drive shift to cloud and need for security.
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Datadog, Inc.  (DDOG) - Get Report posted better-than-expected earnings Tuesday after the bell, citing the ongoing shift of IT services to the cloud for driving its results.

The company posted non-GAAP earnings per share of 5 cents, vs. analyst estimates of 1 cent a share. The company’s revenue of $154.7 million topped estimates by $10.4 million.

“The pandemic has driven organizations globally and across industries to prioritize their digital operations like never before, further strengthening the cloud’s position as the IT architecture of choice,” said Olivier Pomel, co-founder and CEO of Datadog, in a statement. "Datadog continues to be a trusted partner in enabling digital transformation and cloud migration.”

Lighter-than-expected billings appeared to be hurting the stock after hours. The company posted billings of around $156 million, vs a $159.1 million consensus, noted RealMoney.com’s Eric Jhonsa.

Shares fell $6.21, or 6.7%, to $86.39 in recent after-hours action. Shares fell 2.4% in the regular session. The stock has risen 5.4% since the company last reported earnings on Aug. 6.

For the fourth quarter Datadog forecast revenue between $162 million and $164 million, non-GAAP operating income between $3 million and $5 million and non-GAAP net income per share between 1 cent and 2 cents, assuming approximately 335 million weighted average diluted shares outstanding.

For the full year it offered guidance of revenue between $588 million and $590 million, non-GAAP operating income between $48.5 and $50.5 million and non-GAAP net income per share between $0.17 and $0.18, assuming approximately 332 million weighted average shares outstanding.

“With eight new products and major features announced at our annual user conference, Dash, we have maintained our strong track record of innovation and extended our leadership as the most complete and cloud native end-to-end observability platform,” Pomel said in the statement. “We continue to make meaningful R&D investments toward what is a very significant long-term opportunity.”