Home Most Popular Investing Datadog (DDOG) to Report Q3 Earnings: What to Expect

Datadog (DDOG) to Report Q3 Earnings: What to Expect

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Datadog (DDOG) to Report Q3 Earnings: What to Expect

San Francisco-based monitoring and analytics platform Datadog (DDOG) is set to release its third-quarter 2023 earnings on November 7. With the rapid growth of cloud-based services and organizations undergoing digital transformation, investors and analysts are eager to see how Datadog has performed in the quarter.

Let’s take a closer look at what’s in the cards for Datadog’s Q3 earnings.

Financial Outlook

Datadog has projected revenues between $521 million and $525 million for the third quarter of 2023. The Zacks Consensus Estimate currently stands at $523.3 million, representing a 19.88% growth compared to the same period last year.

Non-GAAP earnings per share are expected to be in the range of 33-35 cents. The Zacks Consensus Estimate for earnings has remained unchanged at 34 cents per share over the past 30 days, indicating a significant growth of 47.83% year-over-year.

It’s worth noting that Datadog has consistently beaten the Zacks Consensus Estimate in the past four quarters, with an average earnings beat of 33.85%.

Factors to Consider

The growth of Datadog’s cloud-based monitoring and analytics platform, as well as its investments in sales and marketing, are expected to have a positive impact on the company’s Q3 performance. The accelerated digital transformation and cloud migration across organizations have contributed to the increased adoption of Datadog’s platform.

In the second quarter of 2023, Datadog reported a growing customer base, with approximately 2,990 customers generating an annual run rate of $100K or more. This represents a growth of 20.77% compared to the same quarter last year. Moreover, a higher percentage of customers are utilizing multiple products, indicating a strong customer retention rate.

Datadog’s recent capabilities update in its Cloud Cost Management product and observability space, as well as the release of new integrations across the next-generation artificial intelligence (AI) stack, are expected to fuel customer growth and strengthen its position in the market.

What Analysts Predict

According to the Zacks model, a positive combination of Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, at present, Datadog has an Earnings ESP of 0.00% and a Zacks Rank #3.

Other Stocks to Consider

If you’re looking for alternative investment opportunities in the tech industry, consider the following stocks:

  • NVIDIA (NVDA) – Earnings ESP of +6.93% and Zacks Rank #1
  • Upstart (UPST) – Earnings ESP of +9.09% and Zacks Rank #2
  • Clarivate (CLVT) – Earnings ESP of +5.56% and Zacks Rank #3

These stocks have shown promising potential to beat earnings expectations.

Conclusion

With the continuous growth of cloud-based services and the increasing importance of data monitoring and analytics, Datadog is well-positioned to deliver strong Q3 results. Its expanding customer base, new product capabilities, and innovative integrations have likely contributed to its growth. However, investors should closely monitor the company’s earnings release and analyst insights to make informed investment decisions.

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