Datadog (DDOG)

AJ Ljubich Director of Investor Relations
Olivier Pomel Co-Founder & Chief Executive Officer
David Obstler Chief Financial Officer
Sanjit Singh Morgan Stanley
Chris Merwin Goldman Sachs
Sterling Auty JP Morgan
Ray McDonoug Credit Suisse
Dan Bergstrom RBC Capital Markets
Brad Rebeck Stifel
Jack Andrews Needham
Bhavan Suri William Blair
Parthiv Varadarajan Jefferies
Pat Walravens JMP Sec
Gregg Moskowitz Mizuho
Call transcript
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Thank you for standing by and welcome to the Quarter 2, 2020 Datadog Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today, Mr. of Director the Ljubich, Investor Relation. AJ ahead, go sir. Please

AJ Ljubich

release thank Thank second us joining Good our quarter market close and you, afternoon you press in today announced financial which for after today. results, the of Frendi. XXXX we issued to review Datadog's

and on CEO, call Co-Founder the CFO. Datadog's me are Olivier Obstler, Joining Datadog's Pomel, today and David

anticipated uncertainties as from COVID-XX the words anticipate, customers, expectations. trends intend, could reflect materially These and statements intended and The indications results. of to any our the of laws expressions similar During their are operating forward-looking similar and continue, that Private this our for future our cause including identify and made the our Reform of impact and differ XXXX, to our are business and to estimate, benefits Act of outlook of products, views industry actual size other XXXX, capitalize call, provisions products, financial our and we to strategy, to ability pandemic expectations. including market opportunity, on related the or will believe, will expect, not Safe date. statements pursuant Litigation our Securities expenditures, for that statements statements market, variety to the are risks federal a of the are as for our the make securities investments, of only Harbor performance, full-year as These statements hiring, today results business subsequent of third quarter under go-to-market well R&D future of usage of central the and as related subject to our and our our capital forward-looking expected on

the May XXXX. our discussion of for refer results, SEC on on please with XX, actual our affect factors and a could XX, Form quarterly important period XX-Q XXXX the filed quarterly ended the report to For that March other risks material

will XX-Q and information from report period be on Form that XX, Additional our filings with to time XXXX we SEC. file in the other reports quarterly quarterly the June for and made time available ended may

with will of there on limited Investor available our the for are call time. replay the website. of the filings A be Our a Relations SEC available section

also available from our reports Additional information may the in file with filings that SEC. and made to be other may time time we

you will be over to call. measures financial portion Investor Please in on financial tables Relations the turn of these on for non-GAAP that conference to reconciliation our directly the of like Additionally, the which most With comparable refer the a this can discussed our measures earnings to GAAP call to find release, website I'd Olivier. measure.

Olivier Pomel

today. and Thank you, for joining thank you all AJ us

the employees, over results to systemic dismantle that million COVID communities. charities the raised by of as supporting release, black want proudly for Before we with the to discrimination report quarter, discussing our as together I well $X organizations working experienced

company and we And our living are our committed diversity in communities. reasons, many help. do for Datadog part to to unprecedented and inclusion supporting is want and as We to always, times within

quarter growth generation logo turning robust we continued results, strong financial strong report adoption. and and Now to to platform QX including new challenging during another happy are times, demonstrated Execution was efficiencies. of

to in execution growth usage pleased impact While our micro of the did of we are with to the some rate our related the we experience environment. quarter, customers

this new and XX% $XXX best more, cloud about of form as end customer in increase customers believe above cases in in evidence was $XXX,XXX for to with XX% We demand our a continue or these the use XX% we near-term, the this macro need year-over-year of ARR quarter customers to high and achieve the is with agile of accentuate overall and to that new guidance confirms at our we this outcomes uncertainty million, increase see X,XXX And the QX of the the the These digital customers. remains last path To ARR. over first revenue While be environment of and high generate year. which growing level, an of summarize, ended of existing range. an the long-term. from

We have which about XX,XXX from represent growth last XX% of X,XXX customers, year. about

free customers usage based continued capital adopted to also $XX net on and our over past newer dollar retention be million. as And of rate We with quarters, increased efficient their cash in as was products. flow XXX%

continuing high at growth are deliver we to So scale.

looking at detail. Now QX in more

both to quarter the grew saw from New digital logo last and in record robust in migration cloud new as year-over-year the customers sizes logo and companies and transformation. gross all QX. geographies set of new quarter ARR and prioritize generation was matched additions We

instance for a times even had in of chain, park face transforming For to priority. wins longevity a few that the yet wins top business logo and and ensure new auto US we challenging small large chains, quarter, these notable in global a These two a resilience European from airline. showed an amusement customers, the is university

and market. continues strategy to the platform resonate win our in Next,

new customers using and or products or the which using more landed over that quarter up products, with which of had XX% year. QX, last had is or logos are would more of XX% As from four our I end of in a we products, now while zero year another add two of customers two are we approximately XX% XX% ago, more of

the with in pleased time, newest a last very period and are released short also of Security We of our the RUM, products NPM all over Synthetics, uptake with year.

legacy as we of events is into native, important truly rapid the change architectures and as ever has end-to-end platform, a because market, stack. And ephemeral economy of cloud backend than from winning more recent home a from we accelerate user We the security well. work from demonstrated infrastructure, voicing infrastructure. the cloud limitation are with the win win to cloud the We to in support solution OpenView now the offer because IT the we through broader end as integrated way improves. are we the all believe we migration our because other and visibility experience offer And the will

we mentioned as in impact and the macro have on on was results, existing execution strong, our environment some growth Now, customers. while particular top of did line earlier,

our seen sizable in saw had continue usage to of the pandemic. below QX, but environment. we This customers this grow the platform who of primarily before trends customers, rate Our growth larger dynamic was was already in cloud our the

look customers Given conserve we consumption could these therefore, still cloud cash uncertainty, optimize of macro saw and they where infrastructure. the to

growth. was of it they large in going as long large AWS, greatest cloud large What plainly, a it savings. a would journey penetration that Note GCP Azure companies a through was their enterprises have cloud put number that remain mostly customers low look the with deals note overall in runway optimization cloud unusual growth are also see in On this their earlier relative for time. many enterprises a the the adoption on basis. this time. are the continue continue to through of same customers or see these smaller flip from new customers their exercises Therefore, quarter customers a we environment. that at I cloud, at scale to and over while these go IT see to side, not these stronger motion, to regular short-term is To

of some get we to like do not I'd provide on into July. to update, in providing what habit while commentary we intra-quarter the Lastly, want saw

It notable unique however macro our the broad-based by this the sustain too across ended. Given saw growth a strength over will seconds given is last the macro to base. customer usage We relative month, to in improvement if soon know, environment. QX, driven growth

and David these remain As will for speak the to. we trends, result a in encouraged which are outlook while by our prudently year, of remainder the we conservative

cloud we a and subscription footprint relative growth of revenue based of have the our reminder, our a revenue both and As volume. data usage to and growth is the model customer's

topic, proud our this the of teams very bookend to Finally, challenging performance during I'm the times. of go-to-market

we what product new teams against of delivering logos levels our As control executing are and record we are and can cross-sell. well

R&D, investments to make on continue Next deliver we rapidly to significant to innovation.

record track many products introducing success we portfolio. to see of new opportunities expand a have and We our proven new

private test teams and For example, from general are accessible not locations we Synthetics, announced enables availability proactively Internet. that ops of applications dev for public recently to internal the the which

directly for in with repository. deployment the earlier acquired also provider test and before is enable Lab, before a software Datadog and logs of identify workflows issues the access Data of and Internet AWS injected integration for And on Things agent availability Undefined engineers include a innovations product customers the mobile production. and observability Firehose workflows. continuous Datadog the central the even of dev provide continued to lifecycle IoT Other code them provide will release to support the This We to of of equip app tracking Kinesis better the to services be reaching Amazon into with starting visibility enable will to preview to to alerts devices. enable committed to and this streaming dashboards Datadog go, Datadog; general from

and a X-click of AWS integrations added number We also Apache and HiveMQ, including improved Hazelcast. have deploy, Ignite

rapid products Switching Conference, available week low-impact and keep we Annual recently achieved in we'll fully is SaaS, for authorization continued investing XX. marketplace. we at plan FedRAMP a be now As of R&D, our next our we the FedRAMP pace on Dash, of online is User held newer which some bit, showcasing in gears innovation and August for Datadog

public our sector go is market while likely some motion out build it time. to to continue to We and take

long-term We opportunity. about are excited this

quarter. briefly wins Now let's the several in about talk

building been using pillars First, for a in logging to on company. sale savings of million FinTech this had refocus customer consolidating they into has them monitoring move to single than Datadog. we This monitoring disparate from large a and of observability. multiple disparate teams With from expect with platform tools features a $X all three seven-figure Datadog, able vendors more engineering allowed new

now increasingly Infrastructure to Another APM adopting automotive from which moving Through their NPM, platform are figure of agile company, model. share and a modernizing development is came Azure. adoption and European Datadog Microsoft a collaborating seven on an are teams Monitoring expansion and

products, for monitoring a Datadog products. infrastructure mentioned had $XX a high has well ARR. that now security. and in had And a and of the Synthetics This with adoption million with using platform observability using company ARR six and platform use a of a also record At to standardized large drill entertainment up existing is of saw last, in Datadog Synthetics, as levels And scaling any down that to seen now with during increase we this which networking over us and manager, a land has as logs company layers, and on tremendous identify investment of figure been made growth decision more products a we on APM asset Next, easily more our to monitoring six leading using figure we both RUM commit new pandemic. by deal and into social can and pillars, upsell Datadog. use scale, and to early figure seven NPM, request they has including is three quickly sale all their

to on outlook. our moving Now,

we market is opportunity. path As our it we important of half very Recent look very more digital outcome. one achieve events ahead business the about to cloud thing is a the remain clear, to be the to than the this second made best excited ever first year, and have

priorities, macro trends focus We against but likely well to near-term, to executing primary the continue uncertainty, to have our is strategic the the the Datadog executing is positioned market. remains beneficiary on in to In our on and continue not win remains changed. these of cause which very believe environment

introducing building products, new improve are our we to categories solutions. continuing innovation by track new strong First, record of and entering on existing

talent are continue we pursuing market. are rapidly Second, R&D would go-to-market channel. to in the into And aggressively that otherwise and globally we in and newer third, get expanding not our hire

to confident that I we and in David? Chief that, Financial are to Officer, the over near-term sustain our to growth like call time. strong over Obstler. turn We very the David With both continue would

David Obstler

Thanks, Olivier.

logo year-over-year, generation top $XXX Execution delivered mentioned, with challenging strong As traction. difficult strong against macro was compare. up million, quarter we and Revenue XX% robust continued bottom line a platform and was the second backdrop. new results amid

To context. more some While of the pressure macro existing did provide customers. environments usage

sequential First, with more we products very contributions robust XX% with our from and in logo just -- or been of two QX channels of now platform logo XX% we customers saw strong new both cross-selling strong ARR. dollar versus strong using to of our enterprise by ago was Execution new has and additions and sales growth usage year of commercial continued robust customers, both and driven based In quarter, the a XXX% above driven lands increased XXth newer quarter. cross-selling. solutions existing by for consecutive second We once retention net saw solutions. our both the again existing against growth

best-in-class QX. decline XXX% did Our however net from above remains retention which rate,

As Olivier some detail. To add macro usage increases. factors discussed, pressured

did First, a This was pressures in growth of grow, cloud, while their save from larger levels. business the consumption. our pre-pandemic customers with experienced customers slowing primarily existing down was rate by the below who in and scale softer seen the greater near-term

Additionally, from on as is one had number possibility of QX. a our vendors, dynamic, we usage which QX media streaming we normalization a did customers discussed see COVID. that rapidly the in as we spike of of March, such some the In scale face call

optimize Over these of cloud and of spending pressures save business the amid activities. were following on budget some and usage months, able to customers normalization

demand delivery therefore companies, Next, have customers and meaningfully continued and such as some their see to continued usage. elevated to grow media Datadog have

usage. reduce customers impacted COVID our of some saw we Lastly,

less those and detractor. of customers As such a than contribute they a reminder, therefore, XX% mild were travel in track hospitality ARR and our these as

related Lastly, customers, better-than-expected. hard most but bit COVID hit the churn was elevated to a

remained Our continued retention has customer dollar-based low rate growth of mid-XXs. year-over-year. base SMB rapid based in largely including has dollar our gross to Performance been churn stable and the unchanged robust

Now year-over-year in XX% growth. up relatively to billings, million Entering was revenue quarter. with the and turning $XXX.X which line

year-over-year to did to million, $XXX large call, the material performance year we some seek material customers some of change of our not pointing billings shortening not thought contracts related slow year-over-year. renegotiate was quarter. durations QX. last possible was Remaining obligations but way, see in on we contract RPO a slight solution. importance did it in duration closed the As happen XX% We or terms payments discussed the to that multiyear or in in a did We ago up see would

committed closing focus. remains our We which continue to annual strategic success in have great deals,

As while of can contracts on timing invoicing based customer a reminder, and usage. billings customer and fluctuate incorporates signing RPO of the versus revenue revenues

detail. Now the let's review more in income statement

unless non-GAAP. As all metrics noted, otherwise a are reminder,

our the margin of We period. ago hosting. have provided also gross release. margin $XXX.X efficient compares earnings use year in profit Year-over-year a to representing GAAP by quarter reconciliation the Gross a of was gross in and financials cloud improvement margin was gross non-GAAP This XX%. a million, driven in in of quarter XX% XX% of to last our

newer of year revenue, R&D gross quarter-to-quarter may ago fluctuate data and an as centers cloud XX% we prioritize innovation was million Our or product the expense margins as ranges, with quarter. development acceptable as to in build-out well the of compared geographies. $XX.X in XX%

We high headcount. invest mentioned, have R&D continued significantly in to Olivier as including engineering growth of our

investments However, revenue continues some even our have and related did leverage of and the substantial home. T&E work from we growth from to savings to outpace overhead

first This plan expenses substantial no ago to see but continue in-person marketing year the and was of trade shows innovate outpaced make to growth investment. Sales meaningful We in has to the that investments, continue platform for make investments R&D, pace a or continue XX% in events. million period. expand quarter $XX.X full we the to of going marketing R&D and revenue and meaningful to of Similar opportunity therefore were our to compared forward. to revenue, XX%

and the of lead loss with a activities. While negative line to $XX.X quarter. have in event's ago operating successfully the It much XX% year of we ratio. budget margin was ago Operating advertising redeployed not year X% G&A income $X one-for-one expense $XX.X million a an the or on margin, other a in and same was so compared generating ratio million a is revenue, X% or period. million in to

net XXX the and investments, $XX.X the and margin in on does net improvement that average income in non-GAAP facilities to million quarter or per income, gross Note contributed include benefit weighted million margin. travel was entertainment in the outstanding. and our revenues shares diluted million based non-cash $X.X taxes. Non-GAAP reduction not the overhead related the $X.XX Beyond operating outpacing payroll share to

R&D. We very investments and have marketing a business sales experience return our efficient and a high model and on in

quarters note and of consecutive have top we priority our remains to income, to and investments delivered operating intend to continue R&D we growth, aggressively market. positive While four go line that in breakeven we

an $X.X ended from from Cash and operations margin to purchase the into of consideration issuance convertible net cash first for the and was $X.X free and note conclusion quarter of million and which quarter now flow sheet for cash quarter, our Free restricted $XX.X turn issuance our full-year during taking the cap securities, a includes we quarter third balance and XXXX. flow, million cash the of in $XXX like stock CapEx outflow the flow includes to cash, cash capitalized After proceeds to our program. the cash employee to call the costs in Turning marketable equivalents, software, related the flow in million I with was $XX.X approximately million would billion quarter. of XX%. outlook transaction. the the

with are an drive macro uncertain our pleased environment. new We to execution ability and sales in

discussed, some the in the As see QX, growth usage slowing we from overall our existing in to due economy. did of customers lower

in to however, historical usage to As an relative pre-pandemic that improvement our experienced levels. we Olivier closer July, trends noted, in were QX

it usage to economic know of customers However, we of too this if rates. below the pre-COVID lack will existing be and growth clarity soon prove is of given to growth assuming are trends, sustainable

not average Non-GAAP million. impact million share weighted based net impact to share to Non-GAAP in the expected shares of we material XX% quarter, is of the which income range $XXX macro think breakeven XXX an we to to approximately diluted that is backdrop. million be in million, be million sales, $XXX $X.XX loss be half a seen we given operating a some outstanding. on yet our revenues third new of a income with in prudent of range the it while to $X the $X the Additionally, midpoint. to is expect expected Beginning have the second of per to expect growth year-over-year income at to per represents

expected per million weighted range be diluted midpoint. share $X.XX million the fully to to and to range the things is a few expected $XX account fully range income based to A non-GAAP guidance. operating of of $XXX which approximately million XXXX, to year-over-year on Non-GAAP our growth the XX% in million, of is full-year per for in net -- million shares. of Now represents share the the in average XXX in expected at be be revenue $X.XX into take to is income to $XXX $XX

rates, growth evaluating of quarterly the consider growth comps. in to XXXX it is when our First, important second challenging the half accelerated creating rates more

Next, see our continued margins, end we towards while long-term gross are in of the target. improvement we our top running

development acceptability. prioritize and cloud may of regions, within and product vendors diversifying a we As hosting range gross margins our our fluctuate

COVID. I as Next, to not operating hiring our plans in continues our Then and during be aggressive and invest mentioned marketing to we some meaningfully, including intention notes sales have R&D earlier, and income. below changed

We income, in quarterly the expect of of net interest expenses other securities, and which our including non-GAAP approximately our convertible less $X.X million is income cash debt. interest marketable

breakeven do periods. the summarize, time. net to to our pleased forecast related per Note, that full-year a very have challenging to are To be given both our diluted that we with income execution for international expect are quarter. count but QX share and we profitable a provision during for non-GAAP tax taxpayer, provision Next, of expect be we a tax $XXX,XXX federal expect not entities, a approximately our we

environment believe are the of be a migration environment current results positioned those we the prove be long-term. beneficiary cloud a in primary the impacted transformation near-term, And will and to well digital our over we to While very has the trends. catalyst for macro topline

us. investments for opportunity open have making capitalize the call we the organization business begin of Operator, We across the now the that, highly to in efficient and With are let's ahead questions. will today a on large Q&A. order model


question you. from [Operator of of the Singh Sanjit Thank comes Instructions] Stanley. Your line first Morgan

Your open. line is

Sanjit Singh

you rough and you provided detail usage, really thank environment for helpful Hi in a guys question. all the of And that's and context. I appreciate very that taking the

I'm these customers with, cloud to maybe correct sort a temporary sort that Is confidence that a and the there sense, just numbers sustained? Oli, sort out it more sort you're you digital What like more more the start of factor secular impact period So downturn? something what you get Oli I any singled me kind you sense or -- -- the gives guys versus was sort strong And this you having a of scale primary I kind think customer deployments. factor have wrong, if large versus customers cohorts want of is large just of period conversations customer primary but large a being the sustained digestion in those transformation. of that tailwinds would It's right? pause a of gives growth after more of of just as of with makes of it's of that large, to there a well. confidence guess, large

Olivier Pomel


So from say bills time to as the their happens that And at ramp company. it first ask I'd can it's look consumption before, up optimize. something is, we some done point, thing too going seen up we've themselves we've they cloud like and their a companies time

you've margins. gross our If seen

For how the similar ask cash. down the uncertainties, that because we much is themselves, came last was that same in everybody word same be have company conserved. example, like of some at effected pretty can save cash year everybody up to by happened every time What go idea from respect. The has there that COVID, the single fairly

lot it to the of in the good -- be still it of are things next lot cloud to has is be still so about is bill, One not costs, a there be opex had that is and made. of savings it's to -- some a paid paid

so If you take saw we action, happen. what that's

to of that the tell asset to parks hard of amusement right you the moving we've before still it's mentioned had but hotel companies -- but on to started scheme thing, moving cloud chains cloud, now, of not think are key of happen and us in that a that and and the terms to companies call. when were what's on in number to it, that using near-term, again That broader continuing the that. in by June optimized and data is that even like data way, that though their see some -- things call out Azure companies data that general Datadog bill what not have or cut side, infrastructure. cloud to the side on what is the the shutdown July figure And optimize on trying the by mean We could to we they their side. bill, cut companies they're new the or of going In we've that the Google that, the are on in Amazon

And volume weeks, we so and they we infrastructure is etc. customer what keeps decrease after some -- over having deploying, while then keeps a etc, see building or because then going their of again, view keep their they team side of data period but that start few see that

new that unexpected. not an it's exercise or is So

I it makes is just these the it companies think -- for now same a all different sense to what's of it's that, happened. and time at be

Sanjit Singh

QX, high-end think growth guidance, XX% and quarter, math. David, the roughly total then sense. right? the roughly the about Understood. least I if look That is around QX and this is at at my XX%, And by I makes XX% around

were the I know amount would behind committed there trends, that sort customers guidance? usage. a COVID, of And be significant overspending usage their right? I there relative a around assumptions to was think -- what to helpful understand of prior to those particularly was that So, underlying

Because sort guidance. quantify the guidance understanding assumptions your trends for -- that it the post-COVID, underlying I terms of think in understand guidance. half? of that weaker your behind to could you the looks that anyway would usage, so very And the sort assumes the of persist I helpful is out of frame second although that, anyway If think us to to some of give like like usage what be pre-level

David Obstler

Yes, I that's right. think

history our guidance particularly retention our guidance that has that. do our we're COVID, and We been of usage and that our to and have net cognizant given prudent public implicit forward-looking of most assumptions throughout company and continue in we as conservative a fairly

sell. had we we think cross said, as I strong

we a which continued far we good see some platform, the adoption sign variable just so more a usage. saw Oli and And of as is mentioned as usage The constraints. the as

forward to So assumptions in going conservative use guidance. we tried our

Sanjit Singh

I'll much. you very floor. the Thank Understood. leave

David Obstler

you. Thank


Your from of next of Merwin comes Goldman question the Chris Sachs. line

is line Your open.

Chris Merwin

taking questions. much thanks Okay, very for my

were your ask Olivier, the with particularly within you the about going aspects charging letting log give product at we're away had pricing customers their for strategy pricing, convergence space. that we're for For just seeing in and you're I that space tier. pretty on low wanted players launched very light thoughts I free now and to price you you observability it, logs for to the seeing want the in And ingestion -- actually your a other when of pay they disruptive or of on index. where remember platform the free creating entire

the industry Do pace all the as you and up to raise So I Thanks. leading value guess see in question you innovation. the customers? as price to of you is how evolving at if you your ability keep more do even your see pricing time deliver model

Olivier Pomel


processing that don't absolutely want so maximum sure by very deployments do And everybody having we we we have levers are our that's careful want think meaning in -- they is that to to of us I customer our of the value has we customers, why charge user, platform, customers not online. that of sent and things to being to pricing gigabytes single And means, in align and same other the get. amount because pricing with parts value having pay our Datadog we it first is, the So are to every way pricing, very to encourage of make we all, use data with it. the then to different the the about differentiated same that able we for the to case, represents

where to evolve over had We well It we've in evolve time, pricing believe and now, look are to customers Right we and try and the more at a future. you probably that. It it in pricing want works market winning value our model. that's the to with market but our the in model market. more we the power least align still happy the in -- our pricing have we we're be winning will flexibility, give the gives So today, in the ability future. long-term

only I it's pricing, based you means to alone. your actually usually on think products -- tool of when is when on play quality you win the your like news. can't bad It

Chris Merwin

trends Thank and any David, just guess SMB the or it would some customer segment follow-up you during you. good our about share expansion churn the metrics saw maybe be detail enterprise across more you some or And Understood. relates customers. you mid-market by able to for you. I quarter, to Thank of share, as net and could that

David Obstler

of Yes, the had stable that in to upper the based and call we one tending SMB XXs surprises last enterprise the had dollar all growths company. to part a didn't more strong the that. type the said but rates them the see lower, we gross of the was over costs. have towards of what really and very from metrics similarly, down, similar towards concentration we've in little discussed end be and saw XXs. But that because very much with churn, same since churn We public the all on very that it's gross are retention range of the larger in within at become we've of a net bands, and come we disruption this And we all

Chris Merwin

Great, thanks very much.

David Obstler



the JP Morgan. Your from line of Auty Sterling comes next question of

line open. Your is

Sterling Auty

thanks. guys. Hi Yes,

it? usage that macro they're slowing with you've platform supplementing usage any it impacts and there tools of those seen existing just but tools, the of evidence So customers your of some maybe customers. Is in else slowing cloud and or the terms something or slowing that's usage of of the the the of

Olivier Pomel

infrastructure related they're to cloud No, that's directly recognize new I we've we of is mostly the usage what the think revenue. seen how slowing

growth is use we is we or containers send way customers or And this what To the call growth saw some the early and another they prudent they last think in is and going Amazon the to move what in the what's -- now we June, this various Azure I see, see we of to towards with prudent how considering that's slowed We the in and that's we their instances crisis parts it overall transition all economy. the So used July, used to they right way, we and thought. going happened in they And COVID again, there the be their should grew long during going impact in quarter containers. and terms, still are that is less sell still terms put near-term. in say, in to we grow of, grow. other What something us. like the -- in less we want but to cloud remain acceleration still end for to is we in the the that happen said them as and grow remain that to they're of to instances what the the is quarter, would we needle going uncertainties so it, up

Sterling Auty

same the faster, quarters the ramping of pace And last of would sales you new Understood. the how they of seen, then resources traditionally ramping are characterize over you've at you've couple slower? one follow-up, that hired that the ramping

Olivier Pomel

team haven't around are to of terms that's during that, scaling full near-term, number. have We time, said cloud where scaling longer related and to of they a see to Again, customers going world don't quarter-to-quarter mentioned it know well. of we we going. customers growth We where because of product the the their In is spend which basis. we're new actually attach. the up in much of to there. XXX%, the The great which we customers sell from at we everything pretty set they so to And of the at logos, cloud. time that this that more our call migration numbers of a the revenue. they sales keep and don't we driven business set in when their that once only changes also why control did our sales need the on. and control we [indiscernible] transform. worked fully month, see record over both expectations net single the control this partially for had to every any is is are we exactly the terms to like do COVID don't We A and rate within a level new wanted of by only very team had initially, and the level rate in that keep transitioning but of going that And retention part of record seen impact But transition we're that on early is are they now --

Sterling Auty

Understood. Thank you.


the line Zelnick Brad Suisse. next Your of of comes Credit from question

Zelnick Suisse. Brad line of Credit open. is Mr. Your

Your open. line now is

Ray McDonoug


questions. and This overall about solution, think for -- taking Zelnick. for which attach APM business. wanted you Thanks of McDonough on help can the is your size were both a than relative little I more you or management to log faster Sorry that. Brad rates I mentioned last understand quarter growing the just the ask us bit recent of Ray

this So recent the that quarter? case remain in

Olivier Pomel


growth. So hyper they are in both

great the than logs growing talked. So the and other last growth the would that and also now. are picture fast smaller infrastructure The right be time a still earlier iPhone not grows changed faster company, in we much and products Datadog public extremely hasn't since a hyper scale growing lot are at still are this APM

we're -- with we So overall fairly those. happy

David Obstler

very the similar attach the retention, has and about to talked net that rates contribution their we've to time. trends And last been

growth. continue additional the to using -- have the in continues increasing grow of number we they're components hyper the what So customers and of platform there spending on to platform

Olivier Pomel

-- it's over and to growing keeps rate we of important keep -- they've actually new which time. really that logo, are up signs demand we that this is been whether new Yes, strong, understand. from active The products before is what

say doing I one directly today. something actual would this that are the not with to anything, passive because great. it a the customer we're is like an not been consumption. anything, that The taking has it's all they doing that's related but thing customer So like word sounds don't not us quarter I detractor passive, is been and

Ray McDonoug

cross is this building what one we that not for earlier them that as or that's appreciating Chris's product. one look get the and you to do don't said work Synthetics, competitor give a we recent Greenfield. no and or price of on get changes will from do something we little to are same impact infrastructure, our helpful have. I an having -- point?Yes, of as that in don't that want that question overall, individual so can are as could that's And your think they then us, adopting color. on your business focused impact together the today long-term our adapt agreed what at as to they those on actually you as your have tailored APM, of APM already sell little And changes Thanks, Greenfield on your competing aggressively want packaging open think on changes value with base? their more that as that's pricing customer How little. always an we they actually, competitor's into mind, implications log the if pricing tells lands medium be saw in the you is that while to ability for issue, see, they and and little as and is tied and business more major this a differentiated customers they particular as want the majority little your not We of there like your as seems our total time, we you to this -- work. you because product our can as for we know problem see strength At keep and mostly products, cost platform, ownership of Like by kind each of of

very anything very see don't different. I anything So disruptive there or

our a no, be from there. again there it is won't change end, So

Olivier Pomel

that kind the of want to they keep see like this for differentiated don't same not having look something issue, for what we we actually open an time, agreed always we that a they Like little have. by our that At have as of as -- and Greenfield more they not major pricing as and they value little Synthetics, work. can to work while is individual we today already so as tells that We mind, problem products, little is Yes, changes is the an give we product. get in as product as adopting with to on actually, that impact we you the that's strength and them little. and of adapt as a no there that's or little tailored don't they get us, want as tied saw our can each our together those our said their infrastructure, want customers mostly as business platform, because you log on see, of APM,

So anything different. very anything I disruptive see there don't very or

So is again there. from no, there our it be end, won't change a

Ray McDonoug

for you All right. Thank the color.


question from line Barclays. of comes next the Raimo Your Lenschow from

open. now is line Your

Raimo Lenschow

Hey, thank from you. Quick question me.

this like you the numbers Amazon in and slowing mean, then we the that and about So we is AWS one mentioned have usage I Azure before see report like you. benefit public cloud.

it am wondering, of -- bit Azure And were look a a so attention a I because their be as down, of seems if directly paying little seem you slow well, AWS growth down. at something directionally you like to that just always they way, in terms slow numbers. you're seems of more correlation terms I related. of growth to almost there Is seen almost that as in the derivative in and But here? those like

Olivier Pomel

is product for million But it these they the want what where we understand dynamics have providers. do before try to they which there their consume. definitely it to to make kind the happened right, is a they dollar customers the that have every exactly call don't to our they happened will some what say we everything Well in -- correlation, with counts them, of do we to And what big tied customers these and basically, they because save I of of and today, know these the products portfolios already to We now. going, because the prices we saw deal, to sure they their can. is -- right top next companies is for different

faster because lot growing I the today. products a we more have say underpenetrated cloud keep So the thing is, will -- in the one are and adding than we we still we we're have And market. quality providers,

than faster in recent lot are. still a growing they faster growing we are even are we So And more quarters.

Raimo Lenschow

like question the offsets is consumption you and then The much on Exactly No. not is no. had in is and yes, that exactly, But that's, there's the about I subject. do it. and other have theory Yes, one one true. usage -- can you that

taken taking a On some the mentioned action, of the stats you sales more up hand, change COVID products. kind something writing some everyone, saw it push you is or or like Or here? because any you product this etc. are for force towards incentivized Have look trends in you action better July cross-selling extra uptake there we or selling other other is you and around more up, of

Olivier Pomel

are No, same. The is sales we do the we teams way the incentives the sell, have The change to didn't anything. same. we

move numbers the earlier not cross-sell the to is, because we is changed going we right today. logos, the is usage of numbers now way was cloud that's the into will to growth What -- of -- The digital doing the our did working, product the anything to that our So we focus said we stop. right right before, haven't new come proceed. The we're businesses right. in transition focus the rest, still bring

Raimo Lenschow

Yes, it Perfect, makes sense. thank you.

Olivier Pomel



Capital RBC comes from Markets. Hedberg Your next from Matt the question line of

Your line is open. now

Dan Bergstrom

July. quarter, It's taking then quarter the for about our enterprise, you you from Dan color perspective Thanks a That given linearity was the provided Bergstrom for or maybe but different expected? anything note large call-outs the in some macro linearity in what Wondering question. Hedberg. than helpful, and else to in around

Olivier Pomel


I actually. was don't a say, take I let's question. hope if I -- But... quarter this David, So numbers you mean,

David Obstler

No. Go ahead.

Olivier Pomel

what early quarter in from that had little we July with different before what was we a scope was way in this saw The the bit QX. consistent fairly that

and behavior growth we good on logos, is saw which call. we great discussed last what So in the

July -- not mentioned, April. I Sorry,

were and of growth April good The very weeks logos. first new few

was for growth. recovering is lower we saw had Our the up in And and we April so growth further -- recovered month towards quarter. new of what logos remain of the then had the But started and in recovering things much May, June, going of is end July. full rest June, the then in

these we've So trends are seen. the

in than quarter, to tell we a very we lot really near-term, can't was past normal to. what some used Now, saw previous month. as consistent Like the of the month numbers if noisier what and emotions see over return will or in see state having used whether we'll still to oscillation our the economy other we're so we the same We some this customers. is it the provoke things

Dan Bergstrom

that's been generally Great Security available thanks months. helpful. Monitoring for And three then here little a over

curious you I strong customers beta. Just should engineers. with runway demand about think of in Certainly, there? left heading know, a and where a reception from security And long it's we security? initial then maybe

Olivier Pomel


now a look, types did start and very start early super, some -- we it. again, cases if very of focused of it happy we early. a in pay it's So has that still But early it with super to use get for very super product, the right, focused some with it's planning very customers. uptake for We're customers use to good very, terms

to more we in talk about are have some about we still material lot becomes but think products say So I talk we'll a to -- future work more we when it maybe of it do. excited, early, more there, and when but still have -- we the we're

Dan Bergstrom

you. Thank


Your from next question Brad Rebeck from comes the Stifel. line of

is line Your now open.

Brad Rebeck

you. believe to contracts would Thank pretty looking guide comps you don't billings. last through helpful. be XQ, had up on my quarter, paid difficult you some any I significant know super next color that notes David, with I But that

David Obstler

billings have and impactful. didn't and were a had in it the affect didn't the present RPO, we much. numbers -- we forma, didn't because quarter more ago, than what in pro did We but We as RPOs we say which it wasn't multi-year had concentrated we creating the contracts, that that

was And so point out. to nothing there

Brad Rebeck

forward? look Okay, we and for no issue XQ, as

David Obstler

No with? Sorry, I you. can't hear issues

Brad Rebeck

before? difficult Sorry, XQ for any year comps the from with issues

David Obstler

this we Yes, we on are call. nothing pointing out haven't -- that

to point So we we out. nothing wanted -- that

Brad Rebeck

Okay, much. thanks very

David Obstler



the Andrews question next Jack Needham. of Your from from comes line

now is line open. Your

Jack Andrews

changed wondering, my running how investments anything, question. and new we innovate new for as or buyers talked but make good over these really go-to-market you the taking rapidly to personas afternoon, continue need within that you do strategy, about on just organizations. might time? your -- roll new follow-up into thanks haven't Well to And out you I want you I'm products. you Are the or maybe whether change about implications of strategy more either think to

Olivier Pomel


You're thoroughly right.

to When relates are for starting see We buyers be cases, I product to we for that same that still observability on to portfolio. it bulk are buyers. think now the security, the same to some our going in -- some or say. everything the way, comes I the different will working of to talk

behave going still are same we'll it's today, we're of that we'll the So product for product. But way. after yet, that terms Nothing monitoring. we in the that motion. get is see but focused make how way, security that the data, it works keep aware that future mean, something possible expanding get we'll the audience monitoring, the the we're that to more it's and we're that's I the of, customers customers as we selling changes behave enough in and something more how and that we'll more target product we're

Jack Andrews

Okay, great.

do is opportunity for thinking how essentially that? how you product. technology think you're I new Just way for on mean locations this your follow-up, leverage use? Synthetic about Or a to could elaborate the a you the around the about opportunity as for employee private Monitoring

Olivier Pomel

exposed. the I Yes, for all think services being more internal that it's of are

that In don't safety UI. web have a fact, companies

that One as Internet. it's exposed to advantage not test and reaching but many to some of to difficult me the for -- more the are fact go great is in endpoints

So that solves that.

own So to or and APIs web install manage inside test probs in verify they to -- it and automatically might their networks their probably their a put them their it allows hosted but for customers also a they be allows at cloud their application, that to deploy to as that employees not or cable we or we're might things basically directly. it providers that might want in providers using Datadog, example, they either -- monitor but networks

possibilities of So it for range them. opens a whole

Jack Andrews

you. Great. thank Well,


of Suri the William of Bhavan Blair. comes next Your from question line

is open. Your now line

Unidentified Analyst

on Bhavan [indiscernible] is Suri. This for Hi.

things You partners do you growth channel about January, you. which you market Can of talk expands the this important via Network interest in collateral, at talk listing. self-training of for go like your your been near implementation, qualitatively, macro how formal being early and locator least medium a And announced support term registration, the by in you environment. over And for see categories across to strategy. Partner opportunity partner launch can it's how impacted time? Thank channel lever, about partner

Olivier Pomel


of So, yes, since so we signed we've communicated we up partners, I we've recent for it's -- number would. We've than a fairly that think large thought for don't program actually like great publicly. we us. number uptake larger had

So to start. I But it's will strong it not off been do a today.

terms they expectations think a we develop I of to making process also right levels going we sure on those so enough working provide be them, enable of partner, them. in but not what are us, that to we're partners so just to have different are place, different we and in provide the can to there partnerships, will have

And so for for now. on promoting levels different we're partners right to -- working

So that. on we've interesting far seen outputs some

in So earlier multiple we partners. that thought through we've closed deals, large we've regions. And than done deals, much

that is impact now maintaining network We want because on we fast, just haven't now have that that of the partner to growing what. very COVID new, on and base seen as can opportunities focus opposed partners. specific it's large partners a grow still the to And existing no matter that

lot signs, early more a to So far but do. with plus the

Unidentified Analyst

on international Thank additionally, specific and this where any most this little about regions the particular quarter. international you you. opportunity? can performance you your a helpful. your year talk And you're see seeing talk very could That's Thanks. And where maybe more bit investment for you Are plans there strength.

Olivier Pomel

this want you take one? David, to do

David Obstler


well out talked landing as build continuing we're about as as in we're and the the and we before, have we We when back performance regions a Latin build the expand and complete, like to out to outs mass in out build team which quarter in teams talked sales earlier as are the as filling EMEA territories, to critical so of the out when America. for continuing out EMEA, either Asia build saw We new same said building on we've we're teams second had we've before some about we get had areas plan successful is or all first time. the of Asia, in in we done, along, good to

of of So the our we'll continue part as plan that in remainder the year.

Olivier Pomel

is interesting One that of different the thing the is different at pandemic parts that's times. hitting world

turned that tell these have through in get we've times possible with turned basically. going very it's what's and to at and we QX to to QX respect to seen off out So happen different that. hard Again, --

Unidentified Analyst

Okay, for that's thanks great, call. the


Your next question comes Thill from Jefferies. of from Brent line the

is open. line Your

Parthiv Varadarajan

This how Thanks. acquisition, ask spaces. you for I the Parthiv is we environments? testing on Hey, Oliver, patterns opportunity Brent. guess, Undefined help should usage in application can about development for environments relative I observability in about to wanted to us frame production the the think the

Olivier Pomel

share Undefined own their check first their it very production. to until being ITD on is in and developers on interesting up Naxi process when machine codes what's so Yes, that then what happens they with focus completely own deployed ends

with haven't not commit been shared. their before So used where they coding an on it, we've typically present developers machine it's we towards before been area anything

for new that's us. So

time us way all closer to is the extremely from to to production. what us to closer the of high for ways to and of the allows really code developer, get All clients committed through flexibility information in the the also the many be release happens

with very change So there. good level

that company about a together. a -- are excited time to we're data and product at in very So a common now. are are excited because [indiscernible] the integrated we amount about is we that the planning busy, that building to product of and in we the rebuild now, super it's right built the towards being have to about platform great it, short sunset a maximally Right hard it team and

Parthiv Varadarajan

you. Thank it got Okay,


next comes of Walravens line JMP from the question Your Sec. from Pat

open. now is line Your

Pat Walravens

for Thank me in. getting you

economy. you've seen this where XX-years, you So quarter, -- you Oli, of said the you a I to point one time it's over. really was How number in remind been asked of this feel last the learned just was same does it's you've ask don't know question, you've that thing you, to slowdowns going, the I'd much in And then last that you for until like pretty doing which comparison? sort

what you way So still or same the have learned? do feel you

Olivier Pomel

happen things happened others time thing had thought know some we ideas like knew, would we think, some I we the knew some of we did this little Yes, last happen. happen, wouldn't -- was and that bit would a differently. what We exactly

So you to category more actually, not certain customer thought QX, base And happened. in when we exactly see see might thought being what it's others. current about QX churn. of mean certain our of back but customer. sense. understand the retrospect, we didn't the it And affected see expecting thought our parts we we're explain churn We much might largest we than among see We in we broader behavior, you what's you I slowdown a see, saw happening. easily, makes a can elevated

difficult be a part. before that I predicting it think would

little what's it's get as of over are understanding about few end few the adopting pandemic where -- are The we going we're are one bit we to with customers a careful the the next super market, of way back thing various going parts where are, through more products developing happen will today, core what hopefully. in So the confident our is, it. quarters next about month we growing to the it maybe we are it, and the the of doing

Pat Walravens

Great. you Thank much. very


comes Mizuho. from line question next from Gregg the Moskowitz of Your

Your line is now open.

Gregg Moskowitz

Hi taking questions. thanks very much. guys, for thanks Hey, the and

customers going of larger will multi-cloud the impact of For that on have Olivier, quarter. optimization this forward? Do you the think that you among this increased cloud level any adoption pace saw

Olivier Pomel

when of scale. because so, cloud customers multi-cloud, one I have don't typically are adopting like think they

one the in that. know, smaller addition You to

is the -- of my it adopt seen impact scale cases, my first. mostly guess. their So think what we'll to it's but guess. to to see harder we've a Again, that's I so cloud bit That's some in what little happens. And going tell, maybe

Gregg Moskowitz

decelerate this David, a your for And basis in did a year-over-year thanks. quite just growth RPO on bit quarter. then Okay,

your were longer I And RPO. you some remained a up don't and duration against strong contract has said break I coming that contracts ago. billing you annual think current from know, year that you out

growth on should just or Just wondering, RPO commentary thinking we have be you if how duration adjusted any about that?

David Obstler

the billings the multi of to some Yes, the the closer multi-year similar quarter is you're year. -- The current right. revenues much second is exactly The difference contracts in last in there of to XXs. RPO timing RPO growth the -- of the

aligned contract duration with those why So current down didn't would the the period -- be duration contracts The billing see much the reason consumed, change. revenue. billing the being because came and more it we you and are a the had slightly, billings just didn't RPO, that's

Gregg Moskowitz

very Okay, clear. you. Very thank helpful,

David Obstler



to Olivier now, right Pomel. it continue. like over would Please And I to turn Mr.

Olivier Pomel

right. All you. Thank

that in that digital pleased Datadog positioned what to So the this against to environment been our we repeat has a continue long-terms very the these than And beneficiary like execution businesses call, first of to in ideally imperative ever more has it are to a to macro while challenging be to and has close presented we believe capture QX, is with We made the invest I and primary situation backdrop. cloud. would near-term opportunity. uncertainties, be for

you the attending thank So, for I want call. to all


Ladies today's this you concludes call. your participations. conference and for gentlemen, Thank

disconnect. You now may