Datadog stock surged Tuesday after the security software provider generated more profit than expected in the quarter and raised its sales outlook for the full year.
The company earned 45 cents a share in the third quarter. Analysts surveyed by FactSet expected
Datadog
(ticker: DDOG) to report 34 cents a share. Revenue of $547.5 million was higher than the $524.7 million predicted.
The provider of IT monitoring software had 3,130 customers with annual recurring revenue of $100,000 or more by the end of the quarter, up 20% from the year-ago quarter.
The stock skyrocketed 30% to $103 on Tuesday. If it closes there, it would be the largest one-day percentage increase on record, according to Dow Jones Market Data.
The upbeat report Tuesday came after CEO Olivier Pomel shared cautious commentary in August, saying that “particularly some larger spending customers” were closely examining their expenses.
Pomel alleviated some investor fears on Tuesday’s conference call while discussing earnings. While Datadog expects customers to continue managing costs, now it’s “less intense and less widespread than we experienced in recent quarters,” he said.
“Despite investor concerns heading into the print, Datadog reported a strong quarter,” wrote RBC Capital Markets analyst Matthew Hedberg, who maintained his Outperform rating and $103 price target on the stock.
For the full year, Datadog expects revenue of between $2.103 billion and $2.107 billion, beating analysts’ estimates of $2.06 billion and higher than management’s forecast in August.
One “can’t keep a good dog down,” Hedberg added.
Shares of other software companies rallied after Datadog’s upbeat commentary: Cloud computing company
Snowflake
(SNOW) gained 10%, database management program
MongoDB
(MDB) was up 13%, and search engine analytics provider
Elastic
(ESTC) was up 7.2%.
Write to Karishma Vanjani at [email protected]
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