Datadog is at $2 Billion in ARR and let's pause for a moment for our jaws to drop:
– It's still growing 33%
– It's still growing new customers 29%
– It still has 130%+ NRR and 90%+ GRR
– It's cash-flow positive with 19% operating marginsThat's why it's worth 18x ARR
— Jason ✨Be Kind✨ Lemkin (@jasonlk) July 17, 2023
So Datadog is just the SaaS and Cloud leader that just … has never stopped. It’s now at about $2 Billion in ARR, still growing a stunning 33%, with a $36 Billion market cap. And it’s gotten pretty darn efficient, with strong cash-flows and operating margins. And it’s growing new customers as fast as it’s growing revenue. It just doesn’t get much better than that.
5 Interesting Learnings:
#1, Just 25,500 Customers. At lot of you use Datadog, but really it’s pretty darn enterprise. They have 300+ $1m a year customers and 2,910 $100k+ customers. In fact, they have only 25,000 customers at $2B in ARR. Fairly amazing for a product that starts with Free. Datadog’s customer base is very, very top-heavy by revenue. And that seems to work just fine for them.
#2. Almost all Datadog customers use 2+ products, and many use 6. Going multi-multi-product has been the key to Datadog scaling past $1B ARR without slowing down. You can see the percent of customers using 4 and now 6 customers as key to growth (and driving up NRR):
#3. Customer count still growing 29% year-over-year. A very, very good sign, and something we’ve also seen with MongoDB as it approaches $2B in ARR. Many run out of customers as they hit scale. Not Datadog. It’s growing revenue 33% at $2B in ARR, but also customers 29%. That bodes very, very well for the future.
#4. 90%+ GRR, 130%+ NRR. Datadog has seen a bit of variability in NRR, but not much. Having 130%+ NRR at $2B in ARR is fairly epic. It’s an engine that will power Datadog (with a lot of work) to $10B in ARR.
#5. Pretty darn efficient — now. With almost 20% operating margins and 19% free-cash flow. Datadog like many leaders in SaaS and Cloud has gotten more and more efficient, albeit more gradually than some other leaders. It’s generating massive free cash flow now of $340m+ a year, and 18%+ operating margins. Not much to complain about here.
In fact, there’s really not much to complain about at all here. What can we say about Datadog in one work? Respect.
- Epic growth at $2 Billion in ARR
- Top Tier Customer / Logo Growth
- Top Tier NRR
- Strong Margins, and Efficient
What more could you want? Not too much. Hence, a top-tier valuation vs. the rest as well.
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And a great look back at how Datadog took off, with founder-CEO Olivier Pomel from the first SaaStr Europa here:
