Datadog Announces Third Quarter 2021 Financial Results

Rhea-AI Summary

Datadog (NASDAQ: DDOG) reported Q3 2021 revenue of $270.5 million, up 75% year-over-year, driven by strong customer demand across various segments. The company recorded a GAAP net loss per diluted share of $(0.02) but achieved a non-GAAP net income of $0.13 per share. With 1,800 customers generating over $100,000 in ARR, a 66% increase from the previous year, Datadog continues to innovate, announcing ten new products at its Dash conference. For Q4 2021, revenue guidance is set between $290 million and $292 million, while the full year outlook is $993 million to $995 million.

Positive

• Revenue growth accelerated to 75% year-over-year.
• Q3 2021 revenue reached $270.5 million.
• 1,800 customers with ARR over $100,000, a 66% increase from last year.
• Ten new products announced, enhancing the observability platform.
• Guidance for Q4 2021 revenue between $290 million and $292 million.

Negative

• GAAP operating loss of $(4.9) million.
• GAAP operating margin at (2)%.
• GAAP net loss per diluted share of $(0.02).

NEW YORK, Nov. 4, 2021 /PRNewswire/ -- Datadog, Inc. (NASDAQ: DDOG), the monitoring and security platform for cloud applications, today announced financial results for its third quarter ended September 30, 2021.

"We are pleased with our third quarter performance, with revenue growth accelerating to 75% year-over-year. We saw broad-based strength across customer segments and products," said Olivier Pomel, co-founder and CEO of Datadog. "Digital transformation and cloud migration continue to be transformational forces for companies of all sizes."

Pomel added, "With ten new products and major features announced at our annual user conference, Dash, we are continuing to innovate at a rapid pace. We are broadening our observability platform, further developing our Cloud Security Platform, and launching the general availability of CI Visibility, which represents a major step towards shift-left observability for developer workflows."

Third Quarter 2021 Financial Highlights:

• Revenue was $270.5 million, an increase of 75% year-over-year.
• GAAP operating loss was $(4.9) million; GAAP operating margin was (2)%.
• Non-GAAP operating income was $44.0 million; non-GAAP operating margin was 16%.
• GAAP net loss per diluted share was $(0.02); non-GAAP net income per diluted share was $0.13.
• Operating cash flow was $67.4 million, with free cash flow of $57.1 million.
• Cash, cash equivalents, restricted cash, and marketable securities were $1.5 billion as of September 30, 2021.

Third Quarter & Recent Business Highlights:

• As of September 30, 2021, we had 1,800 customers with ARR of $100,000 or more, an increase of 66% from 1,082 as of September 30, 2020.
• Announced ten new products and features at our annual user conference, Dash. Product announcements included:
• The general availability of CI Visibility, to help customers gain visibility into their developer tests and pipelines.
• The general availability of Session Replay, a new product in our Real User Monitoring suite, through which customers can watch individual user sessions using a video-like interface.
• The general availability of Funnel Analysis, to track user behavior through conversion funnels.
• The general availability of Network Device Monitoring, enabling customers to automatically discover and monitor on-premise network devices and appliances.
• The general availability of Datadog Apps, which allows partners to add new functionality and deeper integrations to the Datadog platform, including new visualizations and custom interactions.
• The introduction of Online Archives for Log Management, a warehousing solution with long-term archival and online query capabilities.
• The private beta launch of Cloud Cost Management, to help our customers control costs for their rapidly growing cloud and container environments.
• Official Datadog support of Vector, an open-source tool that allows users to collect, enrich, and transform observability data, and automatically route it to the destination of their choice.
• The private beta launch of Observability Pipelines, which will include enterprise-class capability for Vector, and the ability for end users to control it remotely using Datadog while running on their premises or their cloud accounts.
• The private beta launch of Universal Service Monitoring, to track performance of all applications and services without requiring custom code or instrumentation.
• The private beta launch of Application Security, a product within our Cloud Security Platform, to monitor attacks and correlate them with application traces.
• Announced the general availability of Database Monitoring. With insights into query performance and explain plans, as well as automatic correlation of query metrics with application and infrastructure metrics, Database Monitoring provides engineers and database administrators the visibility they need to quickly find and fix application performance issues that arise from slow running database queries.

Fourth Quarter and Full Year 2021 Outlook:

Based on information as of today, November 4, 2021, Datadog is providing the following guidance:

• Fourth Quarter 2021 Outlook:
• Revenue between $290 million and $292 million.
• Non-GAAP operating income between $38 million and $40 million.
• Non-GAAP net income per share between $0.11 and $0.12, assuming approximately 347 million weighted average diluted shares outstanding.
• Full Year 2021 Outlook:
• Revenue between $993 million and $995 million.
• Non-GAAP operating income between $133 million and $135 million.
• Non-GAAP net income per share between $0.39 and $0.40, assuming approximately 344 million weighted average diluted shares outstanding.

Datadog has not reconciled its expectations as to non-GAAP operating income, or as to non-GAAP net income per share, to their most directly comparable GAAP measure as a result of uncertainty regarding, and the potential variability of, reconciling items such as stock-based compensation and employer payroll taxes on equity incentive plans. Accordingly, reconciliation is not available without unreasonable effort, although it is important to note that these factors could be material to Datadog's results computed in accordance with GAAP.

Conference Call Details:

• What: Datadog financial results for the third quarter of 2021 and outlook for the fourth quarter and the full year 2021
• When: November 4, 2021 at 5:00 P.M. Eastern Time (2:00 P.M. Pacific Time)
• Dial in: To access the call in the U.S., please dial (800) 708-4540, and for international callers, please dial (847) 619-6397. Callers may provide confirmation number 50234632 to access the call more quickly, and are encouraged to dial into the call 10 to 15 minutes prior to the start to prevent any delay in joining.
• Webcast: https://investors.datadoghq.com (live and replay)
• Replay: A replay of the call will be archived on the investor relations website

About Datadog

Datadog is the monitoring and security platform for cloud applications. Our SaaS platform integrates and automates infrastructure monitoring, application performance monitoring and log management to provide unified, real-time observability of our customers' entire technology stack. Datadog is used by organizations of all sizes and across a wide range of industries to enable digital transformation and cloud migration, drive collaboration among development, operations, security and business teams, accelerate time to market for applications, reduce time to problem resolution, secure applications and infrastructure, understand user behavior and track key business metrics.

Forward-Looking Statements

This press release and the earnings call referencing this press release contain "forward-looking" statements, as that term is defined under the federal securities laws, including but not limited to statements regarding Datadog's strategy, partnerships, investments and long-term opportunity, and Datadog's future financial performance, including its outlook for the fourth quarter and full year 2021. These forward-looking statements are based on Datadog's current assumptions, expectations and beliefs and are subject to substantial risks, uncertainties, assumptions and changes in circumstances that may cause Datadog's actual results, performance or achievements to differ materially from those expressed or implied in any forward-looking statement.

The risks and uncertainties referred to above include, but are not limited to (1) our recent rapid growth may not be indicative of our future growth; (2) our history of operating losses; (3) our limited operating history; (4) our business depends on our existing customers purchasing additional subscriptions and products from us and renewing their subscriptions; (5) our ability to attract new customers; (6) our ability to effectively develop and expand our sales and marketing capabilities; (7) risk of a security breach; (8) risk of interruptions or performance problems associated with our products and platform capabilities; (9) our ability to adapt and respond to rapidly changing technology or customer needs; (10) the competitive markets in which we participate; (11) risks associated with successfully managing our growth; (12) general market, political, economic, and business conditions; and (13) the impact that the ongoing COVID-19 pandemic and any related economic downturn could have on our or our customers' businesses, financial condition and results of operations. These risks and uncertainties are more fully described in our filings with the Securities and Exchange Commission (SEC), including in the section entitled "Risk Factors" in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2021, filed with the SEC on August 6, 2021. Additional information will be made available in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2021 and other filings and reports that we may file from time to time with the SEC. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, we cannot guarantee future results, levels of activity, performance, achievements, or events and circumstances reflected in the forward-looking statements will occur. Forward-looking statements represent our beliefs and assumptions only as of the date of this press release. We disclaim any obligation to update forward-looking statements.

About Non-GAAP Financial Measures

Datadog discloses the following non-GAAP financial measures in this release and the earnings call referencing this press release: non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses (sales and marketing, research and development, general and administrative), non-GAAP operating income (loss), non-GAAP operating margin, non-GAAP net income (loss), non-GAAP net income (loss) per diluted share, non-GAAP net income (loss) per basic share, and free cash flow. Datadog uses each of these non-GAAP financial measures internally to understand and compare operating results across accounting periods, for internal budgeting and forecasting purposes, for short- and long-term operating plans, and to evaluate Datadog's financial performance. Datadog believes they are useful to investors, as a supplement to GAAP measures, in evaluating its operational performance, as further discussed below. Datadog's non-GAAP financial measures may not provide information that is directly comparable to that provided by other companies in its industry, as other companies in its industry may calculate non-GAAP financial results differently, particularly related to non-recurring and unusual items. In addition, there are limitations in using non-GAAP financial measures because the non-GAAP financial measures are not prepared in accordance with GAAP and may be different from non-GAAP financial measures used by other companies and exclude expenses that may have a material impact on Datadog's reported financial results.

Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. A reconciliation of the historical non-GAAP financial measures to their most directly comparable GAAP measures has been provided in the financial statement tables included below in this press release.

Datadog defines non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses (sales and marketing, research and development, general and administrative), non-GAAP operating income (loss), non-GAAP operating margin and non-GAAP net income (loss) as the respective GAAP balances, adjusted for, as applicable: (1) stock-based compensation expense; (2) the amortization of acquired intangibles; (3) non-cash benefit related to tax adjustment; (4) employer payroll taxes on employee stock transactions; and (5) amortization of issuance costs. Datadog defines free cash flow as net cash provided by operating activities, minus capital expenditures and minus capitalized software development costs. Investors are encouraged to review the reconciliation of these historical non-GAAP financial measures to their most directly comparable GAAP financial measures.

Management believes these non-GAAP financial measures are useful to investors and others in assessing Datadog's operating performance due to the following factors:

Stock-based compensation. Datadog utilizes stock-based compensation to attract and retain employees. It is principally aimed at aligning their interests with those of its stockholders and at long-term retention, rather than to address operational performance for any particular period. As a result, stock-based compensation expenses vary for reasons that are generally unrelated to financial and operational performance in any particular period.

Amortization of acquired intangibles. Datadog views amortization of acquired intangible assets as items arising from pre-acquisition activities determined at the time of an acquisition. While these intangible assets are evaluated for impairment regularly, amortization of the cost of acquired intangibles is an expense that is not typically affected by operations during any particular period.

Non-cash benefit related to tax adjustment. Datadog recorded a contingent payroll tax liability in conjunction with a common stock repurchase transaction in 2016. In 2020, the period of limitations for assessing the contingent Federal payroll tax liability expired and the Company was legally released from being the primary obligor, and recognized a benefit in the consolidated statement of operations. Datadog does not believe this is reflective of on-going results and therefore adjusted for this benefit.

Employer payroll taxes on employee stock transactions. Datadog excludes employer payroll tax expense on equity incentive plans as these expenses are tied to the exercise or vesting of underlying equity awards and the price of Datadog's common stock at the time of vesting or exercise. As a result, these taxes may vary in any particular period independent of the financial and operating performance of Datadog's business.

Amortization of issuance costs. In May 2020, Datadog issued $747.5M of convertible senior notes due 2025, which bear interest at an annual fixed rate of 0.125%. Debt issuance costs, which reduce the carrying value of the convertible debt instrument, are amortized as interest expense over the term. The expense for the amortization of debt issuance costs is a non-cash item, and we believe the exclusion of this interest expense will provide for a more useful comparison of our operational performance in different periods.

Additionally, Datadog's management believes that the non-GAAP financial measure free cash flow is meaningful to investors because management reviews cash flows generated from operations after taking into consideration capital expenditures and the capitalization of software development costs due to the fact that these expenditures are considered to be a necessary component of ongoing operations.

Operating Metrics

Datadog's number of customers with ARR of $100,000 or more and number of customers with ARR of $1 million or more are based on the ARR of each customer, as of the last month of the quarter.

We define the number of customers as the number of accounts with a unique account identifier for which we have an active subscription in the period indicated. A single organization with multiple divisions, segments or subsidiaries is generally counted as a single customer. However, in some cases where they have separate billing terms, we may count separate divisions, segments or subsidiaries as multiple customers.

We define ARR as the annualized revenue run-rate of subscription agreements from all customers at a point in time. We calculate ARR by taking the monthly recurring revenue, or MRR, and multiplying it by 12. MRR for each month is calculated by aggregating, for all customers during that month, monthly revenue from committed contractual amounts, additional usage, usage from subscriptions for a committed contractual amount of usage that is delivered as used, and monthly subscriptions. We updated the definition of MRR as of the quarter ended September 30, 2021 to capture usage from subscriptions with committed contractual amounts and applied this change retroactively. ARR and MRR should be viewed independently of revenue as they are operating metrics and are not intended to be replacements or forecasts of revenue.

 

Datadog, Inc. Condensed Consolidated Statements of Operations (In thousands, except per share data; unaudited)
		Three Months Ended September 30,								Nine Months Ended September 30,
		2021				2020				2021				2020
Revenue		$	270,488			$	154,675			$	702,586			$	425,935
Cost of revenue (1)(2)(4)		63,332				33,984				167,096				89,340
Gross profit		207,156				120,691				535,490				336,595
Operating expenses:
Research and development (1)(3)(4)		112,675				56,440				286,720				142,928
Sales and marketing (1)(2)(3)(4)		75,827				57,142				210,592				153,626
General and administrative (1)(3)(4)		23,549				16,376				65,789				44,876
Total operating expenses		212,051				129,958				563,101				341,430
Operating loss		(4,895)				(9,267)				(27,611)				(4,835)
Other income (loss):
Interest expense (5)		(4,912)				(12,423)				(15,448)				(17,424)
Interest income and other income, net		5,040				7,135				16,105				15,204
Other income (loss), net		128				(5,288)				657				(2,220)
Loss before provision for income taxes		(4,767)				(14,555)				(26,954)				(7,055)
Provision for income taxes		(717)				(595)				(960)				(1,332)
Net loss		$	(5,484)			$	(15,150)			$	(27,914)			$	(8,387)
Basic and diluted net loss per share		$	(0.02)			$	(0.05)			$	(0.09)			$	(0.03)
Weighted average shares used in calculating basic and diluted net loss per share		310,247				302,554				308,115				299,105
(1) Includes stock-based compensation expense as follows:
Cost of revenue		$	1,427			$	529			$	2,957			$	1,167
Research and development		27,239				10,173				64,947				24,723
Sales and marketing		9,739				6,068				23,355				13,683
General and administrative		5,590				3,946				16,112				10,037
Total		$	43,995			$	20,716			$	107,371			$	49,610
(2) Includes amortization of acquired intangibles as follows:
Cost of revenue		$	1,311			$	274			$	2,574			$	668
Sales and marketing		229				—				392				—
Total		$	1,540			$	274			$	2,966			$	668
(3) Includes non-cash benefit related to tax adjustment as follows:
Research and development		$	—			$	—			$	—			$	(2,729)
Sales and marketing		—				—				—				(449)
General and administrative		—				—				—				(2,383)
Total		$	—			$	—			$	—			$	(5,561)
(4) Includes employer payroll taxes on employee stock transactions as follows:
Cost of revenue		$	62			$	32			$	253			$	154
Research and development		1,523				418				5,395				1,877
Sales and marketing		1,275				1,354				5,230				3,014
General and administrative		520				282				838				552
Total		$	3,380			$	2,086			$	11,716			$	5,597
(5) Includes amortization of issuance costs as follows:
Interest expense		$	838			$	8,062			$	2,510			$	10,546
Total		$	838			$	8,062			$	2,510			$	10,546

 

 

Datadog, Inc. Condensed Consolidated Balance Sheets (In thousands; unaudited)
		September 30, 2021				December 31, 2020
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	286,966			$	224,927
Marketable securities		1,180,160				1,292,532
Accounts receivable, net of allowance for credit losses of $2,517 and $2,468 as of September 30, 2021 and December 31, 2020, respectively		224,602				163,359
Deferred contract costs, current		19,933				13,638
Prepaid expenses and other current assets		24,675				23,624
Total current assets		1,736,336				1,718,080
Property and equipment, net		68,820				47,197
Operating lease assets		61,972				57,829
Goodwill		255,735				17,609
Intangible assets, net		12,803				2,069
Deferred contract costs, non-current		35,508				26,750
Restricted cash		3,572				3,784
Other assets		19,427				16,967
TOTAL ASSETS		$	2,194,173			$	1,890,285
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable		$	34,654			$	21,342
Accrued expenses and other current liabilities		85,173				55,351
Operating lease liabilities, current		19,425				16,326
Deferred revenue, current		300,950				204,825
Total current liabilities		440,202				297,844
Operating lease liabilities, non-current		53,189				51,433
Convertible senior notes, net		734,643				575,864
Deferred revenue, non-current		3,266				3,450
Other liabilities		5,461				4,262
Total liabilities		1,236,761				932,853
STOCKHOLDERS' EQUITY:
Common stock		3				3
Additional paid-in capital		1,116,872				1,103,305
Accumulated other comprehensive (loss) income		(188)				2,287
Accumulated deficit		(159,275)				(148,163)
Total stockholders' equity		957,412				957,432
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	2,194,173			$	1,890,285

 

 

Datadog, Inc. Condensed Consolidated Statements of Cash Flow (In thousands; unaudited)
		Three Months Ended September 30,								Nine Months Ended September 30,
		2021				2020				2021				2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss		$	(5,484)			$	(15,150)			$	(27,914)			$	(8,387)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		6,197				3,972				16,062				11,367
Amortization of discounts or premiums on marketable securities		3,716				3,884				11,829				5,344
Amortization of issuance costs		838				8,062				2,510				10,546
Amortization of deferred contract costs		4,704				2,721				12,557				7,348
Stock-based compensation, net of amounts capitalized		43,995				20,716				107,371				49,610
Non-cash lease expense		4,544				3,453				12,605				10,004
Allowance for credit losses on accounts receivable		699				655				1,226				2,656
Loss on disposal of property and equipment		102				(4)				258				4
Changes in operating assets and liabilities:
Accounts receivable, net		(36,972)				2,431				(61,880)				(21,253)
Deferred contract costs		(10,909)				(4,567)				(27,610)				(15,804)
Prepaid expenses and other current assets		1,596				(340)				(941)				(6,821)
Other assets		(912)				310				(1,844)				(605)
Accounts payable		5,060				3,714				12,432				6,406
Accrued expenses and other liabilities		11,918				5,236				19,226				6,884
Deferred revenue		38,287				1,177				94,865				27,964
Net cash provided by operating activities		67,379				36,270				170,752				85,263
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of marketable securities		(406,429)				(273,550)				(897,412)				(1,477,063)
Maturities of marketable securities		365,486				146,646				935,692				268,500
Proceeds from sale of marketable securities		19,417				85,700				61,132				85,700
Purchases of property and equipment		(3,324)				(1,412)				(7,551)				(4,336)
Capitalized software development costs		(6,972)				(6,217)				(19,364)				(14,371)
Cash paid for acquisition of businesses; net of cash acquired		146				—				(200,202)				(2,363)
Net cash used in investing activities		(31,676)				(48,833)				(127,705)				(1,143,933)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options		4,489				5,119				10,651				12,354
Initial public offering costs		—				—				—				(421)
Proceeds for issuance of common stock under the employee stock purchase plan		—				—				9,794				7,680
Employee payroll taxes paid related to net share settlement under the employee stock purchase plan		—				(118)				(245)				(977)
Proceeds from issuance of convertible senior notes, net of issuance costs		—				(474)				—				730,207
Purchase of capped call related to convertible senior notes		—				—				—				(89,625)
Net cash provided by financing activities		4,489				4,527				20,200				659,218
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(758)				506				(1,420)				393
NET INCREASE (DECREASE)  IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH		39,434				(7,530)				61,827				(399,059)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH—Beginning of period		251,104				209,660				228,711				601,189
CASH, CASH EQUIVALENTS AND RESTRICTED CASH—End of period		$	290,538			$	202,130			$	290,538			$	202,130
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH WITHIN THE CONDENSED CONSOLIDATED BALANCE SHEETS TO THE AMOUNTS SHOWN IN THE STATEMENTS OF CASH FLOWS ABOVE:
Cash and cash equivalents		$	286,966			$	198,523			$	286,966			$	198,523
Restricted cash		3,572				3,607				3,572				3,607
Total cash, cash equivalents and restricted cash		$	290,538			$	202,130			$	290,538			$	202,130

 

 

Datadog, Inc. Reconciliation from GAAP to Non-GAAP Results (In thousands, except per share data; unaudited)
		Three Months Ended September 30,						Nine Months Ended September 30,
		2021			2020			2021			2020
Reconciliation of gross profit and gross margin
GAAP gross profit		$	207,156		$	120,691		$	535,490		$	336,595
Plus: Stock-based compensation expense		1,427			529			2,957			1,167
Plus: Amortization of acquired intangibles		1,311			274			2,574			668
Plus: Employer payroll taxes on employee stock transactions		62			32			253			154
Non-GAAP gross profit		$	209,956		$	121,526		$	541,274		$	338,584
GAAP gross margin		77%			78%			76%			79%
Non-GAAP gross margin		78%			79%			77%			79%
Reconciliation of operating expenses
GAAP research and development		$	112,675		$	56,440		$	286,720		$	142,928
Less: Stock-based compensation expense		(27,239)			(10,173)			(64,947)			(24,723)
Plus: Non-cash benefit related to tax adjustment		—			—			—			2,729
Less: Employer payroll taxes on employee stock transactions		(1,523)			(418)			(5,395)			(1,877)
Non-GAAP research and development		$	83,913		$	45,849		$	216,378		$	119,057
GAAP sales and marketing		$	75,827		$	57,142		$	210,592		$	153,626
Less: Stock-based compensation expense		(9,739)			(6,068)			(23,355)			(13,683)
Less: Amortization of acquired intangibles		(229)			—			(392)			—
Plus: Non-cash benefit related to tax adjustment		—			—			—			449
Less: Employer payroll taxes on employee stock transactions		(1,275)			(1,354)			(5,230)			(3,014)
Non-GAAP sales and marketing		$	64,584		$	49,720		$	181,615		$	137,378
GAAP general and administrative		$	23,549		$	16,376		$	65,789		$	44,876
Less: Stock-based compensation expense		(5,590)			(3,946)			(16,112)			(10,037)
Plus: Non-cash benefit related to tax adjustment		—			—			—			2,383
Less: Employer payroll taxes on employee stock transactions		(520)			(282)			(838)			(552)
Non-GAAP general and administrative		$	17,439		$	12,148		$	48,839		$	36,670
Reconciliation of operating income and operating margin
GAAP operating (loss) income		$	(4,895)		$	(9,267)		$	(27,611)		$	(4,835)
Plus: Stock-based compensation expense		43,995			20,716			107,371			49,610
Plus: Amortization of acquired intangibles		1,540			274			2,966			668
Less: Non-cash benefit related to tax adjustment		—			—			—			(5,561)
Plus: Employer payroll taxes on employee stock transactions		3,380			2,086			11,716			5,597
Non-GAAP operating income		$	44,020		$	13,809		$	94,442		$	45,479
GAAP operating margin		(2)%			(6)%			(4)%			(1)%
Non-GAAP operating margin		16%			9%			13%			11%
Reconciliation of net (loss) income
GAAP net loss		$	(5,484)		$	(15,150)		$	(27,914)		$	(8,387)
Plus: Stock-based compensation expense		43,995			20,716			107,371			49,610
Plus: Amortization of acquired intangibles		1,540			274			2,966			668
Less: Non-cash benefit related to tax adjustment		—			—			—			(5,561)
Plus: Employer payroll taxes on employee stock transactions		3,380			2,086			11,716			5,597
Plus: Amortization of issuance costs		838			8,062			2,510			10,546
Non-GAAP net income		$	44,269		$	15,988		$	96,649		$	52,473
Net income per share - basic		$	0.14		$	0.05		$	0.31		$	0.18
Net income per share - diluted		$	0.13		$	0.05		$	0.28		$	0.16
Shares used in non-GAAP net income per share calculations:
Basic		310,247			302,554			308,115			299,105
Diluted		344,453			333,011			343,071			330,831

 

 

Datadog, Inc. Reconciliation of GAAP Cash Flow from Operating Activities to Free Cash Flow (In thousands; unaudited)
		Three Months Ended September 30,								Nine Months Ended September 30,
		2021				2020				2021				2020
Net cash provided by operating activities		$	67,379			$	36,270			$	170,752			$	85,263
Less: Purchases of property and equipment		(3,324)				(1,412)				(7,551)				(4,336)
Less: Capitalized software development costs		(6,972)				(6,217)				(19,364)				(14,371)
Free cash flow		$	57,083			$	28,641			$	143,837			$	66,556

 

Contact Information
Yuka Broderick
Datadog Investor Relations
(866) 329-4466
IR@datadog.com

David Chao
Datadog Corporate Communications
Press@datadog.com

Datadog is a registered trademark of Datadog, Inc.

All product and company names herein may be trademarks of their registered owners.

 

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SOURCE Datadog, Inc.

FAQ

What are Datadog's Q3 2021 financial results?

Datadog reported Q3 2021 revenue of $270.5 million, a 75% increase year-over-year, with a GAAP net loss per diluted share of $(0.02) and a non-GAAP net income of $0.13.

What is Datadog's revenue guidance for Q4 2021?

Datadog's revenue guidance for Q4 2021 is between $290 million and $292 million.

How many customers does Datadog have as of September 30, 2021?

As of September 30, 2021, Datadog had 1,800 customers generating over $100,000 in ARR, up 66% from the previous year.

What new products did Datadog announce?

Datadog announced ten new products at its Dash conference, including CI Visibility, Session Replay, and Database Monitoring.

What were Datadog's annual revenue expectations?

Datadog forecasts full-year 2021 revenue between $993 million and $995 million.