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


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:


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