Shares of Datadog Inc. dropped 5% in morning trading Thursday after the company reported fourth-quarter earnings and revenue that beat expectations but its full-year forecast trailed the consensus view. The software platform with monitoring capabilities posted a net loss of $29.0 million and revenue of $469.4 million. For the first quarter, Datadog projects $466 million to $470 million in revenue and 22 cents to 24 cents in adjusted earnings per share. For the full year, the company anticipates $2.07 billion to $2.09 billion in revenue and $1.02 to $1.09 in adjusted EPS, which is below analyst expectations. Analysts suggested the forecast may be conservative, but investors reacted negatively.
Shares of Datadog Inc. were falling 5% in morning trading Thursday after the company topped expectations with its fourth-quarter earnings and revenue but trailed the consensus view with its full-year forecast.
The company, which runs a software platform with monitoring capabilities, logged a net loss of $29.0 million, or 9 cents a share, whereas it posted net income of $7.2 million, or 2 cents a share, in the year-earlier period.
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earned 26 cents a share, whereas analysts tracked by FactSet were modeling 19 cents a share.
Revenue increased to $469.4 million from $326.2 million, while the FactSet consensus was for $450.2 million.
For the first quarter, Datadog projects $466 million to $470 million in revenue, along with 22 cents to 24 cents in adjusted earnings per share. The FactSet consensus calls for $484 million in revenue and 24 cents in adjusted EPS.
The first-quarter outlook implies no sequential growth, “while the company continues to note gross retention is unchanged at mid-to-high 90%, new customers remain strong, and customers are still expanding,” wrote Bernstein analyst Peter Weed. “At initial blush it seems conservative.”
Looking to the full year, Datadog said it anticipates $2.07 billion to $2.09 billion in revenue and $1.02 to $1.09 in adjusted EPS, whereas analysts were modeling $2.19 billion in revenue and $1.12 in adjusted EPS.
“For a company that likes to set very conservative guidance, this is low — it was just below our own bottom-end expectation,” wrote Bernstein’s Weed, as the outlook was also “~8% points below the full year expectation of the Street into the print.”
RBC Capital Markets analyst Matthew Hedberg wrote that the full-year forecast “looks conservative at first blush.”
