Datadog 2Q review: key financial data significantly exceeded expectations

(1) FY22Q2 achieved overall revenue of US$406 million (+74% YoY), significantly above the revenue guidance provided in Q1 (+62% YoY). Non-GAAP operating profit was US$85 million, with an operating margin of 21%, mainly due to the scale effect of revenue growth. The company also indicated that the gradual recovery of offline offices and the hosting of the Dash user conference and exhibition at the AWS re-invent conference will result in a lower level of profitability in the second half of the year.

(2) Q3 revenue is expected to be in the range of US $410-414 million (+52% YoY), with a Non-GAAP operating profit of US$51-55 million. The company highlighted that while an improving trend for affected customers has been observed in July, it is relatively conservative at the guidance level, mainly reflecting cautious assumptions regarding macro uncertainties.

The Company stated that new product ARRs in addition to the ITIM, APM suite, and log management products grew over 100% YoY during the quarter.

(1) In June 2022, the Company officially announced the availability of the Observability pipeline, the 15th product on the Datadog platform, which was formed based on the integration of Timber, an open source software vendor previously acquired by the Company. It enables customers to control the quantity and quality of monitoring data from different sources .

(2) In August 2022, the Company announced on its website that it had completed the acquisition of Seekret, providing customers with visibility and management capabilities over various APIs. With the Seekret acquisition, the Company expects to add various API-oriented capabilities to its APM suite and security platform.

(1) By the end of 22Q2, Datadog had over 21,200 customers, up 29.2% year-on-year, while the number of large customers with ARR over US$100,000 reached 2,420, up 54.1% year-on-year, with large customers together contributing 85% of the company's ARR.

(2) At the same time, the company indicated that some customer usage growth in the optional consumer segment weakened somewhat at the end of Q2, concentrating on usage-driven products such as log indexing and Trace indexing in the APM suite.