In the first quarter of 2024, Datadog (DDOG) reported earnings that exceeded expectations. However, the company’s revenue guidance was slightly below expectations, and it was announced that Amit Agarwal would be stepping down as president. This news caused Datadog stock to decline.
Based in New York, Datadog disclosed its earnings before the market opened. The company’s stock dropped more than 10% to below 114 on the stock market. For the March quarter, Datadog reported earnings of 44 cents per share on an adjusted basis, reflecting a 29% increase from the previous year. The company’s revenue also saw a 27% surge to $611 million, with growth accelerating for the second consecutive quarter.
Analysts had anticipated Datadog to report a profit of 34 cents per share on revenue of $590 million. The company’s earnings for the same period last year were 28 cents, with revenue amounting to $482 million. Datadog’s guidance for the current quarter ending in June includes an expected revenue of $622 million at the midpoint, slightly higher than Wall Street analysts’ prediction of $617 million. The company also forecasted earnings of 35 cents compared to the estimated 34 cents.
Datadog is a software monitoring and analytics platform that specializes in helping software developers and IT departments manage their applications and infrastructure. The company has a partnership with Amazon Web Services (AMZN), which provides cloud computing services to businesses worldwide. As of Monday’s close, Datadog stock held a Relative Strength Rating (RSR) of 86 out of a possible maximum score of 99 based on IBD Stock Check-up analysis tool.
Despite closing Monday within a base including a buy point at $138.61, shares were set to open below both the moving averages and low-end consolidation range.
In conclusion, while Datadog had good first-quarter results that beat analyst expectations, its revenue guidance fell short slightly, causing its president to step down. Its RSR rating is still high at eight out nine based on IBD Stock Check-up analysis tool.