DDOG - Datadog: Business Inflecting As Worst Is Likely Over

2024-04-02 07:48:17 ET

Summary

• Datadog's 4Q23 earnings beat expectations with strong revenue and operating income.
• Management commentary and tone were positive, indicating strong execution and momentum in the business.
• Operating income guidance for 2024 was weaker than expected, but there is potential for conservative estimates given the positive results and commentary.
• I continue to see customers consolidating with Datadog or that Datadog is successfully displacing competitors.
• Datadog's strong focus on innovation and launching new products will enable it to maintain its market leadership in the long term.

Datadog ( DDOG ) reported their 4Q23 earnings results, where both top and bottom line beat expectations.

I also found management commentary and tone positive, while the company continued to execute well on the R&D front with many new features and capabilities launched in the year, along with strong execution on the sales and marketing front with momentum in the go-to-market continuing in the quarter.

That said, management did release guidance for 2024 that was weaker than expected, especially after the strong results that came out for 4Q23....

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