Datadog likely to show slowing growth in Q1, Monness, Crespi, Hardt says
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Datadog (NASDAQ:DDOG) is scheduled to report first-quarter results tomorrow before the start of trading and the cloud computing software company is likely to show slowing growth as it deals with weakening industry trends amid an uncertain economy, investment firm Monness, Crespi, Hardt said
Analyst Brian White, who has a neutral rating on Datadog (DDOG) shares, noted that the stock has "meaningfully underperformed" to start 2023, as investors have focused on themes related to artificial intelligence and less on cloud computing.
"For the most part, these new AI innovations will ultimately leverage the three pillars of observability across metrics (infrastructure monitoring), traces and log management (log files)," White wrote in an investor note. "Eventually, Datadog and its observability competitors should benefit from this activity. However, we live in an environment where companies are cutting headcount and optimizing cloud spending to survive this downtrodden economy." 
Looking to the quarterly results, White is expecting earnings of 28 cents per share and $495M in revenue, up 36% year-over-year, but down from 44% in the previous quarter.
White also noted that deferred revenue is likely to rise 28% year-over-year to $600.4M, based off historical trends. In the last quarter, Datadog (DDOG) said it had roughly 23,200 customers, including 2.780 who are paying generating more than $100,000 in annual recurring revenue for the company.
A consensus of analysts expect Datadog (DDOG) to earn 24 cents per share on $469.01M in sales.
For the second-quarter, White expects Datadog (DDOG) to guide to $535M in revenue and 32 cents per share in earnings. For the full-year, White expects $2.27B in revenue and $1.45 per share in earnings.
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