Datadog shares drop 9% as outlook disappoints
da-kuk/E+ via Getty Images


Datadog (NASDAQ:DDOG) shares fell 9% in pre-market trading Thursday after the cloud software firm issued a full-year 2023 outlook that fell short of analysts estimates.
The company guided for fiscal year 2023 earnings excluding one-time items of $1.02 to $1.09 a share, on revenue $2.07B to $2.09B. That forecast missed analysts' projections for earnings of $1.13 a share, excluding on-time items, on $2.18B revenue.
For its first quarter, Datadog (DDOG) estimated it will earn 22 cents to 24 cents a share, excluding one-time items, on revenue in a range of $466M to $470M. Wall Street analysts had estimate Datadog (DDOG) would earn 24 cents a share on $482.4M in sales.
Along with its outlook, Datadog (DDOG) reported a fourth-quarter profit of 26 cents a share, excluding one-time items, on sales that grew almost 44% from a year ago, to $469M. The company sales saw strong growth in its large-customer base, as it ended the quarter with 317 customers with an average revenue rate [ARR] of more than $1M, up from 216 such customers a year ago.

Wall Street analysts and Seeking Alpha authors both have consensus buy ratings on Datadog's (DDOG) shares, while Seeking Alpha's Quant System, which historically outperforms the stock market, gives Datadog (DDOG) shares a more-conservative rating of hold.