Datadog (DDOG) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue reached $645.3 million, up 27% year-over-year, with strong expansion in large customers and multi-product adoption.

• Customer base grew to about 28,700, with 3,390 customers generating $100,000+ ARR, accounting for 87% of ARR.

• Free cash flow was $144 million (22% margin), and operating cash flow for the first six months was $376.7 million.

• Platform adoption increased, with 83% of customers using two or more products and 49% using four or more.

• Announced major product innovations at DASH 2024, including LLM Observability, Flex Logs, Product Analytics, and App Builder.

Financial highlights

• Q2 2024 revenue: $645.3 million (up 27% year-over-year); six-month revenue: $1,256.5 million (up 27%).

• Gross profit was $530 million, with a non-GAAP gross margin of 82% and GAAP gross margin of 81%.

• Non-GAAP operating income was $158 million (24% margin); GAAP operating income was $13 million (2% margin).

• Billings reached $667 million, up 28% year-over-year; RPO was $1.79 billion, up 43% year-over-year.

• Cash, cash equivalents, and marketable securities totaled $3.0 billion as of June 30, 2024.

Outlook and guidance

• Q3 2024 revenue expected between $660 million and $664 million; non-GAAP operating income expected between $146 million and $150 million.

• FY 2024 revenue guidance raised to $2.62–$2.63 billion, with non-GAAP operating income expected at $620–$630 million.

• FY 2024 non-GAAP EPS expected at $1.62–$1.66.

• Q3 non-GAAP net income per share expected between $0.38 and $0.40 (approx. 360M diluted shares).

• Management expects continued investment in personnel, sales, marketing, and R&D to drive growth.