Datadog Inc (NASDAQ: DDOG) stock generates >20% returns since last week

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Datadog Inc (NASDAQ: DDOG) stock rose over 23.8% last week (from November 11th – November 15th, 2019; Source: Finviz.com) on good earnings since its debut in the stock market. The company, that specializes in monitoring and overseeing cloud-based network traffic, had priced its IPO at $27 a share in September, and has traded higher than that price since. DDOG has reported third-quarter losses of $4.2 million or adjusted profit of $695,000.

DDOG in the third quarter of FY 19 has reported the adjusted earnings per share of less than a penny a share, beating the analysts’ estimates for the adjusted losses per share of 14 cents, according to FactSet. The company had reported the adjusted revenue growth of 88 percent to $95.9 million in the third quarter of FY 19.

The company has posted the Non-GAAP operating income of $638,000, or a margin of 0.7%. The company had ended the third quarter with 727 customers with annual run rate revenue (ARR), of $100,000 or more, which is a 93% growth from a year ago. The company has delivered the gross profit in the quarter of $72.9 million, which represents the gross margin of 76% compared to a gross margin of 77% a year ago and 75% last quarter. R&D expense was $26.8 million or 28% of revenue in the Q3, which is up slightly from 27% a year ago.

In the third quarter the company saw strong new logo additions as well as extension from existing customers. As of the end of the third quarter, the company had approximately 9,500 customers up from 7,100 a year ago. Calculated billings defined as revenue plus a sequential change in deferred revenue was $112 million, which is an increase of 132% year-over-year. Meanwhile, the company had a multimillion dollar deal which was renewed and billed in Q3 2019. This customer was not billed in Q3 three last year. Further, the company had one large two-year prepaid deal in Q3 2017, which was thus not billed in Q3 2018, but was billed again in Q3 2019.

The company expects to cross $100 million in quarterly revenue in the fourth quarter, easily surpassing analysts’ average estimate of $92.3 million, and adjusted losses to be in the range of 11 cents to 12 cents for the full year on revenue of at least $350 million. Analysts had been forecasting full-year adjusted losses to be of 30 cents a share on sales of $330.1 million, according to FactSet.

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