News

Datadog Falls Short of Wall Street Expectations

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4.4

Andrew R. Michaud

• February 13, 2024

Shares of Datadog took a sharp decline as the New York-based cloud software maker revealed their forecast for the first quarter, which fell short of Wall Street's expectations in terms of adjusted earnings and revenue.

Adjusted Earnings and Revenue Forecast

For the first quarter, Datadog predicted adjusted earnings of 33 to 35 cents per share. This was a sequential decrease from the fourth quarter's 44 cents per share and did not meet the average analyst estimate of 39 cents per share. The forecasted revenue for the same period was $587 million to $591 million, aligning with the fourth-quarter revenue of $589.6 million. However, this also failed to match the average Wall Street analyst prediction of $622 million.

Full-Year Projection

Looking ahead to the full year, Datadog expected adjusted earnings between $1.38 and $1.44 per share with revenue ranging from $2.56 billion to $2.58 billion. In comparison, analysts surveyed by FactSet had projected earnings of $1.77 per share and revenue of $2.78 billion for 2024. In 2023, Datadog recorded adjusted earnings of $1.32 per share on revenue totaling $2.13 billion.

Market Reaction

Following this announcement, shares of Datadog experienced a 9% premarket drop, reaching $122.40.