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Datadog Shares Trade 25% Higher on Strong Q1 Revenue Growth and Updated Full-Year Guidance

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Shares of cloud platform company Datadog Inc. traded higher and established a new 52-week high price after the firm reported an 87% increase in Q1/20 year-over-year revenue.

Cloud monitoring and analytics platform developer Datadog Inc. (DDOG:NASDAQ) yesterday announced financial results for Q1/20 ended March 31, 2020.

The company's Co-Founder and CEO Olivier Pomel commented, "We are very pleased with our first quarter performance, in which we delivered 87% year-over-year revenue growth...We continue to deliver innovation to our customers, including the recent launch of our Security Monitoring product, as well as surpassing over 400 supported integrations."

"The COVID-19 pandemic has demonstrated the need to be digital-first and agile, has underscored the importance of observability into cloud environments, and reaffirmed the long-term opportunity for Datadog," CEO Pomel added.

The company reported that in Q1/20 revenue increased 87% to $131.25 million over $70.05 million Q1/19.

For Q1/20, the firm advised that GAAP operating income was $3.8 million and GAAP operating margin was 2.9%, and non-GAAP operating income was $16.1 million and non-GAAP operating margin was 12.3%. The firm company indicated net income per diluted share was $0.02 in Q1/20 and that non-GAAP net income per diluted share was $0.06.

The company touched on recent operational highlights and stated that "as of March 31, 2020, it had 960 customers with ARR of $100,000 or more, an increase of 89% from 508 as of March 31, 2019." The firm also noted that "it surpassed over 400 out-of-the-box supported integrations and released integrations with Amazon Managed Streaming for Apache Kafka, Apache Airflow, Apache Flink, AWS Step Functions, Cisco Meraki, Confluent Platform, ClickHouse, Hashicorp Vault, Tenable Nessus, and VMware Carbon Black."

Datadog additionally provided some forward guidance for both Q2/20 and FY/20. The company advised that for Q2/20, it now expects revenue to be $134-$136 million and a GAAP operating income between ($1 million) and $1 million. The firm further estimates non-GAAP net income per share of $0.00-0.01, based upon approximately 329 million weighted average diluted shares outstanding.

For FY/20, the firm estimates that revenue will fall between $555-565 million and non-GAAP operating income is expected to range from $0-10 million, with GAAP net income per share estimated to be in the range of $0.02-0.06 assuming around 330 million weighted average outstanding shares.

Datadog is headquartered in New York, and is a cloud-age monitoring and analytics platform for developers, IT operations teams and business users. The company stated that "its 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." The firm noted that it platforms are used by a wide range of industries and organizations of all sizes to enable digital transformation and cloud migration and facilitate collaboration and tracking of key business metrics.

Datadog has a market capitalization of around $16.6 billion with approximately 298.9 million shares outstanding. DDOG shares opened 11% higher today at $61.87 (+$6.18, +11.10%) over yesterday's $55.69 closing price and reached a new 52-week high price this morning of $69.04. The stock has traded today between $61.05 and $69.83 per share and is currently trading at $69.70 (+$13.96, +25.16%).

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