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.
In reality, there’s actually not a lot to complain about in any respect right here. What can we are saying about Datadog in a single work? Respect.
- Epic progress at $2 Billion in ARR
- Prime Tier Buyer / Brand Progress
- Prime Tier NRR
- Sturdy Margins, and Environment friendly
What extra may you need? Not an excessive amount of. Therefore, a top-tier valuation vs. the remaining as nicely.
And an excellent look again at how Datadog took off, with founder-CEO Olivier Pomel from the primary SaaStr Europa right here: