Datadog's Q3 Earnings Ripper, Stock Soars On Strong Guidance

Datadog, Inc DDOG reported third-quarter FY23 revenue growth of 25% year-on-year to $547.5 million, beating the consensus of $524.1 million.

As of September 30, Datadog had 3,130 customers with an ARR of $100,000 or more, increasing 20% Y/Y.

Related: Datadog's FY24 Revenue Consensus Do Not Align With Management's Historical Guidance Trends - This Analyst Downgrades Stock

The adjusted gross margin expanded by 200 bps to 82%. The adjusted operating margin increased by 700 bps to 24%. 

Adjusted EPS of $0.45 beat the consensus of $0.34. Datadog held cash and equivalents of $2.3 billion, generating $138.2 million in free cash flow.

Olivier Pomel, co-founder and CEO added, "Companies across all industries and sizes are building cloud applications and services to deliver positive business outcomes, including more users, higher revenue growth, improved productivity, and cost savings."

Outlook: Datadog sees Q4 revenue of $564 million - $568 million versus the consensus of $543.39 million. It sees an adjusted EPS of $0.42 - $0.44 versus the consensus of $0.35.

Datadog expects FY23 revenue of $2.103 billion - $2.107 billion (prior $2.05 billion - $2.06 billion) versus the consensus of $2.06 billion. It raised adjusted EPS to $1.52 - $1.54 (prior $1.30 - $1.34) versus the consensus of $1.33.

Price Action: DDOG shares traded higher by 29.10% at $102.66 on the last check Tuesday.