Datadog, a leading observability and security platform for cloud applications, reported a 27% year-over-year revenue growth in its latest quarterly financial report. The company's revenue rose to $611.3 million for the three months ended March 31, 2024, up from $481.7 million in the same period the previous year. Datadog's net income also saw a significant turnaround, posting a profit of $42.6 million compared to a loss of $24.1 million in the prior year. Operating cash flow increased to $212.3 million, and free cash flow grew to $186.7 million. The company attributes its revenue growth primarily to existing customers, which accounted for approximately 70% of the increase, while new customers contributed the remaining 30%. Datadog's gross margin improved by 3%, reflecting revenue growth outpacing the increase in third...Show More

Datadog, a leading observability and security platform for cloud applications, reported a 27% year-over-year revenue growth in its latest quarterly financial report. The company's revenue rose to $611.3 million for the three months ended March 31, 2024, up from $481.7 million in the same period the previous year. Datadog's net income also saw a significant turnaround, posting a profit of $42.6 million compared to a loss of $24.1 million in the prior year. Operating cash flow increased to $212.3 million, and free cash flow grew to $186.7 million. The company attributes its revenue growth primarily to existing customers, which accounted for approximately 70% of the increase, while new customers contributed the remaining 30%. Datadog's gross margin improved by 3%, reflecting revenue growth outpacing the increase in third-party cloud infrastructure provider costs due to cost savings. Research and development expenses rose by 18% to $269.9 million, sales and marketing expenses by 20% to $173.9 million, and general and administrative expenses by 7% to $45.3 million, all primarily due to increased headcount. Datadog's customer base grew to approximately 28,000, up from 25,500 the previous year, with significant growth in customers with an annual runrate revenue (ARR) of $100,000 or more. The company's dollar-based net retention rate was in the mid-110%'s, a decline from the mid-130%'s the previous year, attributed to slower usage growth from existing customers amid macroeconomic uncertainty. Datadog plans to continue investing in sales and marketing, product development, and international expansion to drive future growth.