Shares in Datadog Inc. closed regular trading up 5.57% today after the application monitoring and security platform provider impressed investors with earnings and revenue beats in its fiscal second quarter.
For the quarter that ended on June 30, Datadog reported adjusted earnings per share of 43 cents, up from 29 cents in the same quarter of 2023, on revenue of $645 million, up 27% year-over-year. Analysts had been expecting earnings per share of 37 cents on revenue of $642.92 million.
Datadog ended the quarter with around 28,700 customers, up from 26,100 as of the end of June last year and 3,390 customers with an annual recurring revenue of $100,000, up from 2,990 the year prior. The increasing number of customers saw Datadog generate a free cash flow of $144 million through the quarter on a cash flow margin of 22%.
As part of a platform adoption strategy that involves encouraging customers to use multiple Datadog products, 83% of the company’s customers are now using two or more products, up from 82% a year ago and 49% are using four or more products, up from 45%. 25% of Datadog’s customers were using six or more products and 11% of customers were using eight or more products.
Business highlights in the quarter included Datadog releasing Log Workspaces, a collaborative space enabling analysts and engineers across an organization to connect logs and datasets, build multi-stage queries and perform sophisticated analytics on business, security and application issues.
Other product announcements included the launch of Datadog On-Call, an on-call experience with observability-enriched paging and streamlined incident management workflows, the general availability of LLM Observability for monitoring large language model applications and Kubernetes Autoscaling, which automates resource optimization and scaling.
“Datadog executed well in the second quarter, with 27% year-over-year revenue growth, continued customer growth and expanding multi-product adoption across our platform,” Olivier Pomel, co-founder and chief executive officer of Datadog, said in the company’s earnings release.
For its fiscal third quarter, Datadog expects to see revenue of $660 million to $664 million and earnings per share of 38 cents to 40 cents. For the full year, the company expects revenue of $2.62 million to $2.63 billion and earnings of $1.62 to $1.66 per share.