Datadog's earnings beat estimates, but the stock still skids

By Emily Bary

Company's full-year forecast exceeds what analysts have been modeling

Datadog Inc. beat expectations for its latest quarter, but shares of the cloud-monitoring company were still under some pressure in premarket action Monday.

The observability and security company posted first-quarter net income of $42.6 million, or 12 cents a share, whereas a year earlier it had recorded a net loss of $24.1 million, or 8 cents a share.

On an adjusted basis, Datadog (DDOG) earned 44 cents a share in the latest quarter, while the FactSet consensus called for 34 cents.

Datadog's revenue rose to $611 million, up 27% from a year before. Analysts had been modeling $590 million.

For the second quarter, Datadog anticipates $620 million to $624 million in revenue, along with 34 cents to 36 cents in adjusted earnings per share. That compares with the $617 million in revenue and 34 cents in adjusted EPS that analysts tracked by FactSet were expecting.

Shares were dropping about 10% in Monday's premarket activity.

"Companies of every industry and size are deploying new technologies to deliver better customer experiences and business outcomes," Chief Executive Olivier Pomel said in a release. "At Datadog, we're focused on helping our customers observe, secure and take action on their complex systems, so they can migrate to cloud and modern DevOps with confidence." DevOps refers to the intersection between development and operations.

Looking at the full year, Datadog anticipates $2.59 billion to $2.61 billion in revenue, along with $1.51 to $1.57 in adjusted earnings per share. Analysts had been expecting $2.57 billion and $1.43 a share, respectively.

-Emily Bary

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05-07-24 0730ET

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