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5 Fascinating Learnings from Datadog at ~$2 Billion in ARR

developer19 July 2023

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Datadog is at $2 Billion in ARR and let’s pause for a second for our jaws to drop:

– It is nonetheless rising 33%
– It is nonetheless rising new prospects 29%
– It nonetheless has 130%+ NRR and 90%+ GRR
– It is cash-flow constructive with 19% working margins

That is why it is value 18x ARR

— Jason ✨Be Sort✨ Lemkin  (@jasonlk) July 17, 2023

So Datadog is simply the SaaS and Cloud chief that simply … has by no means stopped. It’s now at about $2 Billion in ARR, nonetheless rising a surprising 33%, with a $36 Billion market cap. And it’s gotten fairly darn environment friendly, with robust cash-flows and working margins. And it’s rising new prospects as quick because it’s rising income. It simply doesn’t get significantly better than that.

5 Fascinating Learnings:

#1, Simply 25,500 Prospects. At lot of you employ Datadog, however actually it’s fairly darn enterprise. They’ve 300+ $1m a yr prospects and a pair of,910 $100k+ prospects. In reality, they’ve solely 25,000 prospects at $2B in ARR. Pretty superb for a product that begins with Free. Datadog’s buyer base may be very, very top-heavy by income. And that appears to work simply high quality for them.

#2. Virtually all Datadog prospects use 2+ merchandise, and plenty of use 6. Going multi-multi-product has been the important thing to Datadog scaling previous $1B ARR with out slowing down. You possibly can see the p.c of shoppers utilizing 4 and now 6 prospects as key to progress (and driving up NRR):

#3. Buyer depend nonetheless rising 29% year-over-year. A really, superb signal, and one thing we’ve additionally seen with MongoDB because it approaches $2B in ARR. Many run out of shoppers as they hit scale. Not Datadog. It’s rising income 33% at $2B in ARR, but in addition prospects 29%. That bodes very, very nicely for the longer term.

#4. 90%+ GRR, 130%+ NRR. Datadog has seen a little bit of variability in NRR, however not a lot. Having 130%+ NRR at $2B in ARR is pretty epic. It’s an engine that may energy Datadog (with a variety of work) to $10B in ARR.

#5. Fairly darn environment friendly — now. With nearly 20% working margins and 19% free-cash circulate. Datadog like many leaders in SaaS and Cloud has gotten increasingly more environment friendly, albeit extra regularly than another leaders. It’s producing large free money circulate now of $340m+ a yr, and 18%+ working margins. Not a lot to complain about right here.