Datadog (DDOG) shares dive after disappointing 2024 earnings outlook

Datadog (NASDAQ: DDOG) shares dived over 8% in the market pre-open Tuesday after the monitoring and analytics platform developer issued disappointing full-year guidance.

For the fiscal fourth quarter, DDOG reported an earnings per share (EPS) of $0.44, just above the consensus estimates of $0.43. The company's revenue came in at $589.6 million, notably ahead of the projected $569.3 million.

Datadog also reported an improvement in its adjusted gross margin, reaching 83% compared to 81% in the same period last year, and beating the 81.5% expected by analysts.

Looking forward to the first quarter of 2024, Datadog anticipates an EPS in the range of $0.33 to $0.35, which falls short of the anticipated $0.39.

Revenue is expected to land between $587 million and $591 million in the quarter, slightly above analysts’ expectations of $586.2 million.

For the full year of 2024, Datadog projects its EPS to be between $1.38 and $1.44, significantly below the analyst consensus of $1.78.

It expects its annual revenue to be in the range of $2.55 billion to $2.57 billion, also missing the $2.59 billion projected by analysts.

"We are pleased with our strong execution in fiscal year 2023, with 27% year-over-year revenue growth, $660 million in operating cash flow, and $598 million in free cash flow," said Olivier Pomel, co-founder and CEO of Datadog.

“Looking forward to 2024, we are excited about our plans to deliver more innovation and help our customers with their needs in modern Observability, Cloud Security, Software Delivery, and Cloud Service Management.”

By Vahid Karaahmetovic

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