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Firing on All Cylinders: Datadog (NASDAQ:DDOG) Q1 Earnings Lead the Way


Jabin Bastian /
2022/06/16 4:39 am EDT
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As the craze of earnings season draws to a close, here's a look back at some of the most exciting (and some less so) results from Q1. Today we are looking at the cloud monitoring stocks, starting with Datadog (NASDAQ:DDOG).

Software is eating the world, increasing organizations’ reliance on digital-only solutions. As more workloads and applications move to the cloud, the reliability of the underlying cloud infrastructure becomes ever more critical, and ever more complex. To solve the challenge, companies and their engineering teams have turned to a range of cloud monitoring tools that provide them with visibility to troubleshoot the issues in real time.

The 5 cloud monitoring stocks we track reported a mixed Q1; on average, revenues beat analyst consensus estimates by 3.16%, while on average next quarter revenue guidance was 1.25% above consensus. There has been a stampede out of high valuation technology stocks, but cloud monitoring stocks held their ground better than others, with share price down 7.38% since earnings, on average.

Best Q1: Datadog (NASDAQ:DDOG)

Named after a database the founders had to painstakingly look after at their previous company, Datadog (NASDAQ:DDOG) is a software as a service platform that makes it easier to monitor cloud infrastructure and applications.

Datadog reported revenues of $363 million, up 82.8% year on year, beating analyst expectations by 7.46%. It was a very strong quarter for the company, with an exceptional revenue growth and a full year guidance beating analysts' expectations.

"We are pleased with our strong first quarter results, with 83% year-over-year revenue growth and strong profitability," said Olivier Pomel, co-founder and CEO of Datadog.

Datadog Total Revenue

Datadog pulled off the strongest analyst estimates beat, fastest revenue growth, and highest full year guidance raise of the whole group. The company added 240 enterprise customers paying more than $100,000 annually to a total of 2,250. The stock is down 27.6% since the results and currently trades at $86.12.

Read why we think that Datadog is one of the best cloud monitoring stocks, our full report is free.

New Relic (NYSE:NEWR)

With the name being an anagram of its founder, Lew Cirne, New Relic (NYSE:NEWR) makes a monitoring software that collects, scores, and analyses performance data about a client's IT stack.

New Relic reported revenues of $205.7 million, up 19.1% year on year, in line with analyst expectations. It was a mixed quarter for the company, with a significant improvement in gross margin but decelerating growth in large customers.

New Relic Total Revenue

New Relic had the weakest performance against analyst estimates and slowest revenue growth among its peers. The company added 35 enterprise customers paying more than $100,000 annually to a total of 1,099. The stock is down 5.77% since the results and currently trades at $45.02.

Is now the time to buy New Relic? Access our full analysis of the earnings results here, it's free.

Slowest Q1: Dynatrace (NYSE:DT)

Founded in Austria in 2005, Dynatrace (NYSE:DT) provides companies with software that allows them to monitor the performance of their full technology stack, from software applications to the infrastructure they run on.

Dynatrace reported revenues of $252.5 million, up 28.5% year on year, beating analyst expectations by 2.44%. Despite the solid topline results, it was a weaker quarter for the company, with full-year guidance missing analysts' expectations and underwhelming guidance for the next quarter.

Dynatrace had the weakest full year guidance update in the group. The stock is up 15.8% since the results and currently trades at $38.

Read our full analysis of Dynatrace's results here.

PagerDuty (NYSE:PD)

Started by three former Amazon engineers, PagerDuty (NYSE:PD) is a software as a service platform that helps companies respond to IT incidents fast and make sure that any downtime is minimized.

PagerDuty reported revenues of $85.3 million, up 34.2% year on year, beating analyst expectations by 2.95%. It was a mixed quarter for the company, with decelerating customer growth.

The company added 175 customers to a total of 15,040. The stock is down 12.4% since the results and currently trades at $24.04.

Read our full, actionable report on PagerDuty here, it's free.

Sumo Logic (NASDAQ:SUMO)

Founded in 2010 by Christian Beegden who went from driving a cab in Germany to landing an internship at Amazon, Sumo Logic (NASDAQ:SUMO) is software as a service data analytics platform that helps companies get insight into what is happening in their servers and applications.

Sumo Logic reported revenues of $67.8 million, up 25.1% year on year, beating analyst expectations by 2.67%. It was a mixed quarter for the company, with a decent beat of analyst estimates but a decline in gross margin.

The stock is down 6.88% since the results and currently trades at $7.17.

Read our full, actionable report on Sumo Logic here, it's free.

The author has no position in any of the stocks mentioned