Datadog shares climbed by 20% on Thursday: here’s the catalyst

Shares of Datadog Inc (NASDAQ: DDOG) jumped nearly 20% on Thursday after the security-software company reported strong results for its fiscal fourth quarter and gave hawkish guidance for the future.

Fourth-quarter financial performance

Datadog said its per-share earnings in Q4 printed at 20 cents on an 84% year-over-year increase in revenue to $326.2 million. According to FactSet, experts had forecast 11 cents of EPS for the recent quarter on $291.5 million in revenue. RBC Capital Markets’ Matthew Hedberg said:

Hedberg rates DDOG at “outperform” with a price target of $210 that represents another 15% upside from here.

Other notable figures

The U.S. company ended the quarter with 2,010 customers – an annualised growth of about 63%. Datadog now has 216 customers with over $1.0 million in annual recurring revenue versus 101 last year. In the earnings press release, CEO Olivier Pomel said:

The Nasdaq-listed company had $1.6 billion in liquidity at the end of fiscal 2021.

Guidance for the full financial year

For the full financial year, Datadog now forecasts up to $1.53 billion in revenue, including $334 million to $339 million it expects in the fiscal first quarter. This compares to analysts at $306.4 million for the current quarter and $1.40 billion for the whole year. The chief executive added:

Datadog expects its EPS to fall between 45 cents and 51 cents this year. Its estimate for Q1 per-share earnings is 10 cents to 12 cents.