DDOG - Earnings call transcript Q2 2021

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Welcome to the Q2 2021 Datadog Earnings Conference Call. My name is John, and I'll be your operator for today's call. [Operator Instructions] And I will now turn the call over to Yuka Broderick, Head of Investor Relations. Yuka, you may begin.

Yuka Broderick

Thank you, John. morning. you XXXX us announced financial press issued thank Datadog's to in and release quarter second results, this morning, for today joining review our Good which we

Olivier Joining Pomel, David me Datadog's CFO. call on today Obstler, Datadog's and CEO; the Co-Founder and are

on under call, to financial forward-looking strategy; the performance, R&D quarter Securities provisions only products, future cause our similar and our intended to a the of benefits securities market including outlook views full this safe materially third statements that expectations. make we Litigation our related investments are of Private of and related believe, will subject risks harbor and to uncertainties and ability During laws words XXXX, Reform business reflect today anticipate, of results intend, capitalize are of could to that our or and the estimate, our are statements including and These not year any for date. similar to from expressions in of are and and partnerships differ statements statements The variety indications to federal pursuant continue, our of the the as actual subsequent These expectations. Act forward-looking made for of XXXX; opportunity. expect, as our potential will future statements identify our to go-to-market;

the that X, other March to factors ended XX-Q and For filed the the Form risks May on XXXX. could our XXXX, a report for actual XX, on discussion the of please with quarterly important affect results, refer material SEC quarter

with for quarterly we XX, ended other June and XXXX, in time from Form the Additional that information our report period SEC. quarterly on will file to reports the filings time and XX-Q may available made be

measures you Non-GAAP Our for call. to website. available on this also limited available time. will replay conference the Relations the our turn for a there be financial Olivier. reconciliation to can our SEC GAAP on in directly that, Please a earnings call the tables A of over I'd find which With with this comparable be Relations portion are financial to discussed of call measures. Investor section the their like Investor release, on of measures refer most will filings the of to these our website

Olivier Pomel

Thanks, Yuka, call joining morning for today. and you thank all for our us

We pleased stronger customer customers lines product which and are We existing our across than performance both in expected strong customer with saw as segments. robust across growth well very QX, strength was new sales. with on as real

was end year a of quick increase our of ARR. quarter, or and with review X,XXX above quarter-over-quarter XX% our the and of Those the revenue the X,XXX from ago up more, For of in an ended We generate high quarter. the $XXX,XXX quarter range. $XXX of year-over-year customers customers with guidance XX% million, ARR an XX% about

have about is up about We year. from XX,XXX last XX,XXX which customers,

usage our and rates with also to be over net newer their customers as continued efficient We be XXX% to free adopted dollar-based of capital flow $XX And million. retention increased cash our products. continued

quarters trends are that continued from business positive recent We QX. pleased in

the into First, their impact those growth the new of see our very existing continued we as robust. growth to logo customers grow usage Among new other customers factors, from in strong several remained commitment. past quarters

added strategy. a remain quarter. for consecutive strong we and rates. to factors Taking had churn second strong continued of we And our continues low added execute with logo the account, new Second, ARR go-to-market all into and very million historical in line third, of $XXX to ARR with quarter these against was over again ARR

continued market. to strategy in Next, the our platform resonate

ago. end or of more XX% year up products, X a using As are from the of customers XX% of QX,

which XX% landed is products. with products, XX% Additionally, last quarter, XX% or new And this year. of more are up customers or approximately logos X from X more now of using

in quarter, strong another performance is Our we see its single fast to the of other still record second a platform. with growth This which early platform cycle. in infrastructure ARR included in quarter. Meanwhile, product saw our monitoring very continued added in strong products for

Our Synthetics mode, including remained APM products over but are management and other in newer and RUM our log $XXX suite hyper ARR. growing together, faster. management, and even APM growth million suite, log also reached The in

end-to-end the Cloud customer As our platform a beginning we are as Platform. very result, our well as observability uptake with of pleased of Security the

Now let's move on product R&D. and to

Security announced QX. Security points. availability To configuration Security we general Posture QX Workload runs and of features target so and Management infrastructure. loading innovate to products, security And to just workloads streams. hosts and detection discuss have the and Security We new themselves issues in performs Our around and customer continued in a which These our within Workload continued solve environments are Monitoring, announced the industry audit continuous Management benchmarks performs and Posture standards. threat Cloud Cloud data threat second X new teams real-time GA Cloud products events alongside few these, track which containers. security on Security, security, customers Cloud a to XX and directly regulatory in third within pain ship can of detection

vision XX the DevOps of we our on with start offerings, we are together, coming products, Cloud And down have now platform. can security break Security products addition the and on and the of these first blocks these teams. X silos With to GA our delivering Datadog building Platform between

bottlenecks problem also and experiencing CI/CD are is space, pipelines. are integration and tested to be written, Visibility and to in hard and to in We practice failing the of announced late where are product software CI/CD July. to continuous pipeline why of out is of a beginning delivery, continuous beta the figuring They issues. CI bring CI/CD combined have time if our the and production. The into released visibility allowing also at consistently we their have observability our don't developers CI/CD their and opportunity they a that tests

CI goal and the their Our of testing gain Labs into last efficiency on costs for acquisition our visibility customers of product, pipeline developer August, lowering Visibility with based Undefined their teams. helps increasing

we have these like every we're we'll Microsoft best-of-breed. enabled frameworks cross-product testing in and are existing excited customers about our to Native. now Edge and but RUM features on still to Firefox Mobile make our and announcements, Android, each to and test and iOS Synthetics, we now continue can Chrome. products not In So support on one cross-platform addition React standing will expand

mobile the applications finally, well with of product now RUM extension including deployments These the of to in whole the APM Insights, desktop, automatic and platform. Our we detection and on as across Watchdog continued AI/ML detection continue engine addition, capabilities recommendation our of are anomaly platform Monitoring. as workflows directly complemented user most space, recent improve faulty including by apps. RUM into And our embedding our users' are tablets covers Security we the mobile our in

continues in As our you can Meanwhile, with in to our beginning move end-to-end and the are to platform CI/CD and forward to see broaden see, early our observability -- cases. we we are days use security, deepen. cloud

problems. to our creativity, their deliver engineering always, want customers' their and ability and to for teams our productivity continued their the As to right solutions product I thank

marketing. sales moving on to Now and

quarter, by hinted continued growth our be this customer go-to-market teams our productive. As to very

QX wins. let's So some more discuss

in which log experiencing is upsell across core an had rely a a X-figure traffic to Continuous cause application. company, organization financial to Profiler and existing our the a added on as production. saw our the in the next-gen services we root find their of recently They platform increase good with management significant surge First, in They their of better product issues. performance of usage understand Datadog

communication. Next, was one their by to up-sell with commercial consolidate standardizing we strategic had initiatives Datadog their collaboration satisfy European team's goal X-figure were e-commerce multiple while company. and reduce a using tools, observability on XXXX to a improving and that of They costs and

global we company had tool firm. solution try a This a decrease their its with to with and mean X-figure internal Next, free jump teams problems. to their and able With and large as forced rapid to time Synthetics, and from growth experiencing online upsell were are resolution to product resources. is tool infrastructure mitigate monitoring, to APM they Datadog chosen for accounting up

very with order more With new upsell, had workload had we our by standardized Azure. this magnitude Logging on log management for move back-office software of a without company. and single a and teams. Datadog's an upsell they moving But entire planning their company. is improving management rate team Limits is with land for of their With analytics their adoption finally, all log they software teams monitoring to their it a without costs difficult sacrificing on any collaborate. their functionality, this to needs, low, will hybrid Next, a company for This now And lower and which made to growing platform data. rapidly previous company This alignment a a their for With operability large log cloud. impact adoption Datadog X-figure needs. has XX-years-old across was Datadog, recognize is company X-figure we

customers quarter, for with are thank another of proud them performance and deliver of want of I can incredibly our quarter you as team tell, go-to-market partnering the results. we to and So our work this for their to strong hard

platform. early great see be longer-term Now their moving vision Meanwhile, stages, Azure a and platforming moving digital long-term strategy. in are teams. our longer-term customers position increasingly on believe help businesses we break Observability to we are first. security Businesses making progress We now its must silos our to our Unified with in outlook. down our with digital forward we between and remains DevOps on to

strategy. we As and our increase a opportunities to And our data see to and manage on result, hard complexity. about plans democratize we in customers confident we're continue work and execute extremely the to long-term excited are help visibility

turning this teams to our late to preparing Dash, in at are been user this held and that excited busy mention Before will year. our up Dash Every I over conference, latest show David, to we innovations our everyone product showcase XXXX, year the we've want for we're year. October which what call be to

an at hold to Dash. session investor expect also We

turn look the to Financial like Officer. our With announcement David? for that out Chief in call So over I fall. would please that, to the

David Obstler

summary, had In growth. were year-over-year showed very Olivier. and $XXX.X strong million, broad-based Thanks, was XX% XX% up a Revenue we strong up Usage quarter-over-quarter. QX. trends and

strong was provide also to customers context. products adopt more generation and continued platform. across the To more some logo New

robust adoption driven expanded rate consecutive again customers' retention products. and and XXth customers the growth usage was in above growth existing was our quarter. First, products of remained the Usage new net existing dollar-based XXX% of QX for by of strong,

tool customers, are standardize consolidate cloud continuing their on and our see migrations. for we us customers we as observability Our opportunities with expand to And pursue vendors. them their to

our a regions. broad including over $XXX product we adds saw Next, ARR of our with quarter second across lines, saw and million newer products, consecutive across -- we for strength the strength

see also New the strong. we were record Both gross logo additions and to wins Remember, net across and meaningful and revenue do customer sales commercial our and size. revenue, of quarter, had that a generally translate the opportunities logos both time. so strongly -- over new broad logo enterprise very in given teams immediately do but not We new quarter. number industries our model, into continued usage-based in our executed

now resonate of and customers. strategy our our Next, continues And X products or are XX% with more X using our now of more platform using XX% are to customers of our or products. customers

with low, Lastly, remained churn in levels. historical line

and forma quarter. remained across up million, annual segments pro Billings contract and multiyear The are was unchanged they similar XX% or quarter. products. $XXX RPO, rates duration mid-XXs sales in year-over-year. ago increase higher by contract year-over-year retention gross million, were commitments year a the activity dollar-based driven obligations, and increased was and relative impacts XXX% mix by the And strong in duration. up performance $XXX the of customer no Remaining there to were in our driven Our

force of customer to RPO those timing As and revenue note we on and believe is business Current was billed invoicing over we deals. revenue strong also that as sales can not at commitments do the reminder, fluctuate incentivize XX% trends than multiyear year-over-year. contracts. and relative RPO are the billings indicator a growth to of continue a based multiyear our should annually I better of duration towards our

Now let's statement more review the income in detail.

unless otherwise non-GAAP. metrics reminder, noted, a As all are

decrease our compares XX%. margin in XX% XX% a was We profit last innovation. have our in margin non-GAAP the in a investments This to quarter in product ago of million, in release. representing quarter. quarter provided reconciliation a gross Gross the year-over-year financials of GAAP gross to was year of gross to margin and $XXX due and platform The earnings

revenue expense with performance. We quarter. to was compared $XX R&D XX% year expect to the ago mid- long historical million gross or margin to of term be the XX% in consistent our in

of pleased revenue year R&D, and $XX continued our growth engineering XX% the We we on in to million to significantly and count. in compared hiring successfully invest plans or head executing marketing was R&D. high are onboarding Sales that We're ago our quarter. expense in XX% including of

an travel guidelines. X% $XX margin margin a $XX has We increased operating G&A income or Operating only make investments operating expense XX% in the in for quarter. travel continued income depending growth in compared million in sales and to revenue, ago was the of QX, million investment events year from a the X% of few to continue was outpaced substantial year health in-person XX% or quarter. this course, million or down $XX ago had revenue operating costs event we our local later to on marketing, growth. but We and plan year, in of and but

QX, Although see a to and as efficiencies outstanding. But of on we optimizing and market against invest weighted opportunity. quarter, of shares model. XXX diluted Non-GAAP the heavily $XX per in not business in we course, the near-term net we was dynamic $X.XX front million in quarter strong are are demonstrates that large opportunity margins or for share of us, striving million our income average the

with software, was to and restricted $X.X the Cash into flow cash cash with cash free flow. sheet in XX%. million and equivalents, quarter $XX cash billion ended in was expenditures securities. flow $XX After of cash, capital Turning flow We a margin operations marketable million the quarter. from and balance taking consideration capitalized the free cash

and Now quarter for full year the our for the XXXX. third outlook

We the believe deliver opportunities and long-term growth are foreseeable optimistic high about our we will for future.

per expected the for growth income to million, for at be of which range Non-GAAP share XXX per revenue per is $XX that and to be this are income share is midpoint. We applied, of XX% be market in range into the are follows: growth expected weighted third expected $XXX to based average the expect the to to well operating outstanding. million Non-GAAP approximate million, opportunity. based executing be we in on is to diluted million then And million. $XX an million average operating expected in XX% range income the full $X.XX year-over-year range the net $XX range XXX guidance weighted addressing in to diluted against shares which to as year-over-year the share to our of $XXX be $X.XX $XX to million. a large with updating represents outstanding. quarter, midpoint. at Non-GAAP XXXX, in of $X.XX a of approximately a is the is the expected $X.XX share million in shares $XXX we net million And very are million account conservatism per be the the to to year range Taking on income represents of non-GAAP $XXX usual revenues

on some guidance. Now our notes

usual, while providing was use QX, as growth strong assumptions. more guidance, we usage conservative First, when in

Second, our for investing optimize long-term remains focus to strategic growth. on

priority planning is in regulations R&D will of XXXX. We That events remainder continued flexible assumes And local return model office and highest next, of to protecting depending through go-to-market for and the of the our aggressive our our QX. health we are upon said, resumption and investments travel and the during remain in-person employees. a the

on marketable using line, of cash approximately And tax a X have new and to as added to customers. $X.X securities offer quarter To and income, expect $XXX,XXX but to our have tax net a consume choosing in QX our the pleased result, our operating includes million now debt. both quarter. year. continue a summarize, taxpayer in provision the income with income expect new existing provision a entity. below to We expect convertible for $X related very on which items We and results expense to interest other our XX products international interest and we products Regarding of Datadog, we more be products non-GAAP using and approximately first, of interest this the the their begin QX QX, this more products. are million not we and our full Customers do federal to

go-to-market the migration our execution Q&A. customers strong. and remain against cloud that, to we R&D through and grow. let's digital to our And for goals effects help Our with the Operator, begin their to continues open will ability manage transformation questions. call And

Operator

from Jefferies. is [Operator from question Thill Instructions] Brent And first our

Brent Thill

If a The us you more seeing you're as you can color provide results give you if enterprises what these a exceptional standardizing quarters, color in large your customer maybe segment. last little are just on on that had more could Maybe X platform? on larger little the growth.

Olivier Pomel

Yes.

seeing using and that's By mentioned in But of customers I So the further we're a where they're our starting land I with in that vast which -- acquisition. smaller and those migration large, later what cloud on majority going something with -- creates the some to standardizing and not standardize for things we road them collection think before they're then environment. as some they a still still in our of the category still those. call platform different of customer us. down with of on us mean, their larger we're and were customers and else

what proportion trend different feel any we in So yet. of some quarters, that seen that see we is but see -- particular in to don't comparable we've the we there

Brent Thill

add to second that some you you're versus your year? half, the just in quota-carrying on just the you the what half capacity of plan of the terms first and by can expecting sales color us hiring And give David, have half in

David Obstler

Yes.

in last we throughout we years. year aggressive quota we previously, which plans, As of we haven't year, ramp are with line hiring and have And our sort couple had, goals to and said, revenues. we're the expansion grow we throughout COVID on. of trying changed this And we our quota executing approximately said for hiring as last

Olivier Pomel

to put it’s stops because people us kept there’s in is many hot some Just have what rebound we a hiring also very position unlike and – just interesting job starts, taking market the for today. companies that which David we and an time many hiring off. steadily, now, time great said, Right

the grow happy keep lot So pandemic. place we’re and a made the want, but the in to at we at which effort choice of to with we’re steadily recruiting throughout the it’s we level very happy we’re

Operator

Our next is Sanjit Stanley. from Morgan question Singh from

Sanjit Singh

sentiment upon Congrats on been the and -- the script ahead. the see your get you more you're that being what results. of are of of From monitoring? QX that the sort there's in just bit? a foundation a little little of perspective, impressive of a I you what still infrastructure around saying was that around that It's a Olivier, if sort infrastructure made expound in long thinking company understanding days. can still line its early comment product runway monitoring drives your core Can your

Olivier Pomel

mean we there's what small the I X I market is it. and have a in think the in next total. fraction the One what terms the of intersection penetration, there year of in is is aspects Yes. still of cloud to what's in

more lot from we a there's So that. get can

like probably world bigger is to the be years monitored the of size digitally ago. that the is be infrastructure -- than the market, a monitored that what had lot aspect have the second to will overall is The so transforming X

the to parallel still a so things, to we've evolving, can those infrastructure at with X So that then the few There's workloads. ground innovation field we to running a that, new stop for in and lot and is expect there there. market that We monitoring. cloud when name of cloud cover penetration a -- modalities the now much running ways containers don't more of those and and infrastructure. stuff game terms is are cover you it's of In right? those how ways in still there's be serverless. of new of been look that think Datadog. We started with in through there's And incentives going We to

forefront of we're all And that. products to in our heavily so at investing be the

Sanjit Singh

analytics much perspective Makes I your an APM into that after been? out as I a of came think solution script And is terms really from that multiple total follow-up, one maturity? we been its And come APM. a They and your that hearing you sense. X the APM as if customers we've its where own. would what words use put times has that in of later of sort a year in stand product and or log How heard was capability analogy? of of driver standardization Where the does has from

Olivier Pomel

starting maturity. Well, terms back-of-grid customer the I win APM leg we're The products all and the can love of to in our stool my with neck would are the for standardization customers. in for adoption across by customers. neck serve they Both be logs setup those where the of both second and children say same. I the in And in level situations and of base basis as infrastructure kind products the the to managing of

And what we've our into is are to see meaningful the APM, proven at of we customers going that that They monitoring. and on the infrastructure legs And be stool scale main offering. X today, are platform. logs standardizing buy so

Operator

is from Our JPMorgan. Sterling next from Auty question

Sterling Auty

is is quick of prepared talking this talked maybe the you Can that -- overages comments of minute we spend number now? drive year. the just in remember, different? of remarks growing usage and How about, last you kind the through of usage is item had helping first the in And Given strength. how half kind consumption a the

David Obstler

take that. I'll

through now, long-term of X we we to an that out a see rolling and we've in in is what continue or migrations last and we QX a return of flattening QX, to trends. projects. last normal the normal with last return long-term what of positions had in optimization with time, cloud think we've that in in the which a more that. and now digital very and we the to since the year. quarter And And company's feel, consistent I was said QX to that year X, reflective, very strong is had similar a of seen quarters And consistent

previous quarters, we've in usage in similar history seen the And the like growth the very balanced we said products and types of to company. very of was what so widespread, customers, in

Sterling Auty

Great. right. one then All And quick follow-up.

gave quarter, in ours for similar the give I items. in terms most help you what, this office the baked you In came when think of the how I go-to-market, Obviously, and and forecasts sequential a you the from investment Can sense guidance out, and guidance sales below marketing of that think, is had. us the travel? is into increase to much as head count pointed versus, return well

David Obstler

Yes.

me that. Let start with

as of So in in which from you have were X%-plus and That we planning. or terms – see is X% we drivers. and we’re can I Net, and we One so re:Invent have travel, on not having you’re that the sort line Dash, said – where sort the all upon is percentage is we’ve travel does where of sort having along in performed, some in of in marketing sort X revenue of above of sort of benefit what a volatility quarter the whether have QX. you a that revenue of event. think depending the

secondly the we bottom sort we to essentially, down very a have in of lastly, and mentioned, And as line. had Oli revenues aggressive surprise and hiring plans. So the positive drops – that

market. year. while get that this takes We It a this are essentially to in get done to that done trying

during up people of that of And of hiring of year. things, to hiring already ramped the accelerate, that accelerate second we growth of last in half years, our have, But of in course year. side sort sort the expect to numbers. over the so into couple our And we’re that the seeing the we

Operator

next is question Sachs. Goldman Our Kash from Rangan from

Kash Rangan

results. fantastic a question awesome to you as how do And sales the on Congratulations benefits Really could, we is expect in David. cycles as the of this, the if also, extraordinary the that end the if your pipeline? up economy upper what really and as economy are next to the and opens of the of Oli are the to time like? benefit market about economy the hiring would if as how Datadog into looking evolve out over start up, have see are great. the standardization, are. travel to you enterprise the these which of experience there? And gets incremental as when prosecute get My answer the could do be you they And you to the result, we opening couple results options, this of that talk kind -- showing things What be years, this, up do of get

Olivier Pomel

you. Thank

gets of point, or to know sales customer right? does expect the back necessarily more on-prem from have for changes with are there’s there’s that, takes. and their going it in more IT plug-centric. most force point, we us with change the us, I IT case cycles make over engineers globe mostly changes time the with years process as start you their under over we’re with it make a all the time the it more that But to the more operate. I’ll is the be who easier and doing sales way that not standardization. standardization using in the tweaks legacy investing So this help do their to it perspective And much and or more and our into map are no technologies at have we and time the that because of road standardization. does At – by major product we customers the time increasingly same a the and time a doesn’t we -- this then customers. our standardize sales some cover starts and some the are that order to we at to more or bring way our cloud Obviously, customers that we technology. to standardize, too it do the inform because And small grow have we of some foothold we It solid

that bringing and professional that it really development. also, around of something spending likelihood, across. inform part all is in more our So time informs customers efforts some of this services And our will those

interesting opening or On the we’re we trend back some is there to the any us steady – steady very know faster. the what’s historical pandemic. trend, seems we’re for the happy less we things cloud looks more question world be can and mean, if into There us would so historical And like with look, there the a to the on economy, that back way go of to we’re before move the the to I was that – it don’t that. –

So time, for in can thing same working on of we’re we in building that. be work or growth in the sure more conversations the achieve increasingly of right add part have now the And customers, all segments. our the for long-term of the customer is scaling the the platform to while on our – to problem so maintain problem solve large a to at the bit we everywhere the teams world do go-to-market so order still we make we full keep quite cover products, that that full main can

Operator

Tyler from is Radke from question next Our Citi.

Tyler Radke

new kind didn't issue about just you saw just customers your and could features, power of continue depths it year an But COVID, pricing that to And you that Obviously, do you a do even rationalize to strategy? you in out some environment of pricing time? feel pricing wanted potentially like feel build I term longer ago, you you over kind broadly. the charge more to spend. Obviously, have the like as quarter. was seem this ask of about innovate how

Olivier Pomel

Yes.

X that there's parts I think to answer. So

What customers just value provided us. some exchanged to -- Azure last what capturing the exploding be customers' could you others. those And this think [indiscernible] that to different to can't year need and deals pressure. while cash are exponentially. with they volume we saw are almost The of given and pulled that still straight largest of really a the are of attached uncertainty it's when Two, way Amazon to because seeing long these around being because going for the their we customers was year price facing will of and term, first the saw the that lot were That's greatly we exponentially last not were customers when that one. one revenues the save charging they of money footprint is be with not was saw some data a there our a volumes explode the for data -- of to

thing on working we're with our that one products. that's all of So

and give our a which leverage We is that make get unbundling denomination limits, sure of things without on to and for that keep align price have customers they basically for we that value them this end. the the with is pay way products all our

So we give do would them that. to power the

we very that new The good also and it choice drive made grow those price like products that value saw map we gives they of the third and that terms us provide of the functionality. of fact way basically we products. is as the the the over when new signal SKUs question to form for of which these largely new road add helps in customers, classes time price increase to as and We answer maintain our to functionality the is in problems see a

Tyler Radke

follow-up environment, a just competitive Oli. on And the

consolidating that how kind tools customers you are opportunity. I see just talked maybe think of about or you observability

that, this growth, of Just what that the sizes seeing Just you've really the seen quarter, means as have more obviously, observability of solution grow, especially RPO deal around really, guys. sizes us healthy for you are replacements? legacy more understand those help of kind deal kind you and as competitively been

Olivier Pomel

before. It’s the is being cloud. is that That’s similar see. consolidated to what on-prem motion we into what or legacy the really And we’ve seen

in So very nothing no we see there’s We make – to interesting past, today. seen see about that there’s what other trend we’ve comment see. that the same still the we

Operator

Our next question is RBC from Hedberg Capital from Markets. Matt

Matt Hedberg

matter. Oli, Can security talk about see there Obviously, logging really about of your you building additional sort solutions. script you your even buyer obviously, out little core that different of and in you or of a motion there? you're sales products sort than talked of the infrastructure sort portfolio a for how -- leverage building bit really how little core

Olivier Pomel

Yes.

and customers platform is we to observability. products, leaning So products. those those on as sales into what from on Datadog are we're brought And our now the we're motion self-select adopting that much had security for built very that building the already -- and with can there start

products actually financial be more to Step two will pushing the more force. those GA them and as one. step start reach that's sales the mass and So reach of through critical more directly

We I things in to have we've do the expect interesting acquisition to think that specific anything future. that, some for the that, we though. today, have we're share actually recently. learning quite Sqreen a And don't bit will done from

Matt Hedberg

it. Got

one And for David, then, Okay. you.

commitments. the of don't call we obviously, had You for And push noted multiyear you necessarily that that. higher realize a in you level

some what of conversations wondering, were behavior? drove Just customer the that that

David Obstler

customers think to a long with amending more in see when Remember, I more standardized over want It Datadog growing are than motion commit out. of and their term. to larger and from pulled go we client as investing the rather time often it is observability and contracts the expand, generally land correlation who has we commitment.

and really of customers to natives that longer a wanting be this and term. Datadog cloud core committing commitment as more So factor platform larger of to is a enterprise

Operator

is next Kamil Mielczarek question William from from Blair. Our

Kamil Mielczarek

Congrats the on quarter. incredible

So it's the to great platform expansion. about hear

X embedded you offerings. So

believe, sales coming to development R&D Datadog a around expense, accelerate and is months have You the Dash of and the detail research more up up few decision give you year-to-date. yet offerings, level changes given about I Can how XX% to And of the us spend? your of in make of increasing new organization new support should sale the product we what these diversity the to And you think solutions? the pace to need do introductions?

Olivier Pomel

all fronts. we as aggressively as on investing We're can Yes.

very to in largely -- acquisitions in We which we actually these early a expenses we've CI/CD. investment accelerate doing later Lots ongoing do up can of very lot across and and real-time are on we so we mentioned touch opportunity few through show can there's basis, it. we security we we're in R&D, cases opportunities we observability, a have of R&D on. today what's our use also in the of an when the also done things things very, think So still large [indiscernible]. different also, But on, very, around some developer a BI, maybe in

to keep in time. heavily intend a We very R&D investing early. long very for we're So

product more the for hasn't of in It something side products those barely security the that in today we're the see we'll where GA really of but just we'll as happened first the the future. do of a is aggressively. yet. few It's sell that as go-to-market, not some something it's pushing go-to-market stop certainly them, the on reached doing need changes the impact the terms for -- we side In on

So definitely nothing on. working today share that it's to on we're but that, something

Kamil Mielczarek

any rates That's great you that to give hear. might competitive how you're deals? improved? update in on by backdrop? Is who can an there And product? win have me vary just quickly, change on seeing And And the

Olivier Pomel

it’s that very And From us until same thing changed with grow the the landscape around changed. still us the company’s boring. are as start standardize the greenfield, teams they everything about going changed We landscape So hasn’t are going us environments, and/or to and that we That’s much before. do. with hasn’t hasn’t new see for mostly they our focus to where stand, small just us on either. is motion,

Operator

from Reback Brad from Stifel. is question next Our

Brad Reback

So new platform, cohort a growth their about we years couple think faster? growing the are of ramping recent of is than new they adds customers commitments customer into in the ago? As faster

Olivier Pomel

little X previous to. that used first So We the mentioned we some we bit because also few larger -- calls. depends it a than the have day on commitments on in

months time everything. are we in months X over the to cohorts So and ASPs growth the but And of the commensurate start are -- growth usage longer, see they're the on with seen first very overall, is month in what the with going terms up The generally. we've they in past larger. us and XX

X-part event So there. a it's

David Obstler

the longevity and it’s still consistency similar for cohorts the you of and very expanding periods, very, at expanding long very Broadly retention speaking, a expand in look the with it, of and when previous to similar importantly, net land the time.

which So long periods. with what the cohort – expansion is seen we’ve for in they consistent continues previous quite time, on a very last

Operator

question next from is Andrews Jack Needham. from Our

Jack Andrews

and for? in that DevSecOps? you the push are into the Congratulations dev to ops Oli, be learned dev on personas than and is need more that could when how traction the merged continue conversions this of was gaining to perhaps you what wondering applied account results. lessons as I to security And from different ops previous the conversion security, to

Olivier Pomel

Yes.

of otherwise around A lot a effort on. and and lot a that out, a go departments early different look we easy be great it's involved question. is There's we to very a different that. commonality in reducing of lot of it a involved So lot that people about of things and do with friction lot of and making can

part. know the the -- how that's so that. we throughout what That's company we've And the and done do history so of to that's first

in might second the a to the is cases, little of few earlier, questions is so on platform. motion in and there, a working other we're much upon that terms a need repeat that how have buyer for The buyer part, little a we something something myself to won't bit the that's still setting I though, but touched too we differently. bit the And different, of it's some add that be addressed

Jack Andrews

terms you in just could we your about us of solutions, speed the days? you your the as of a that value with broadening ability and sales you're your everything their when then of partner And the to keeping just how think force these quick are portfolio update just up Again, and follow-up. ecosystem nuances understand propositions just offering to

Olivier Pomel

Yes.

does scale So team to is single to that sales right it’s teams – the with to Operating the that areas, even one how it understand right it’s and the every Adam, The joined deals, and be today product that how major enablement customer. everyone Officer product we that teaches effort. as and focus actually the going all his works to a major team the into sure area of the It’s the the match in on us to we bring make of recently. Chief go-to-market who offering, who exactly

of areas major his focus. of one that’s So

So that. in we’re investing

Operator

Our next Oppenheimer. question Kidron is from from Ittai

Ittai Kidron

security a about isn't that Great you've solutions at quarter. and management I security the vendor this the up posture want doesn't announcements Oli, have There workload protection. new made: questions as on really those follow the X to and available point well. talk

space everybody even you me about from your is is about but contribution early, Security can maybe can I differentiation like think the of it chasing know this perspective? security bring the still help perhaps Platform though your this. Cloud point? And talk So Maybe could the you market you it's also, ARR what into seems early, at

Olivier Pomel

Yes.

the on have one, I we yet. here share So anything don’t mean, second to

growing. today. way I only point, some the say can some it’s the say thing we to and the we’ll more anything trending happy is have way very We’re don’t but it’s share And actually we’re at – with probably

we On are the those workloads. all to instrumenting already what those bring categories, we’d differentiation,

are present machines. we on those So

there. all already. logs cloud running We being Our agents are are collected us those by already The connect configuration. to

turn So security, watching there’s the differentiator. have customers also nothing what we done and on can securing be And can they developers security from tasked and solution that of major, well. – to team. day. are else all team They as security to And teach by with our the workloads. those that’s all a living are we the they can all the major a opposed ops They really the be to do get silo as part separate in people

solely I powerful, that from workload impossible perspective comes when replicate. something combine X things, for different think the those say we from that’s very very security have to a and competition I So would you almost instrumenting the

Operator

question KeyBanc. is Michael from next Our from Turits

Michael Turits

that quarter. the you There Oli, already obviously, in of the their some so about you of of what term? at long little usage that had a a kind to And your The from some the thoughts commoditizing would about been any pricing discussion, in how of point. at impact in some of First, pricing market changes relate need aimed talked, bit in seem pricing, has pricing competitors competition? particular. great does which with change does to data some Has do terms

Olivier Pomel

subscribe on making that offerings need. that that doing. for purposes it. with categorize they sure started I what for mentioned that because some like models volumes it lot are but in We some our and any them us. that of They volume. get charging a us they market, that in their our matters and putting grow on customers standardize if and that's been for can specific slash say something of they're can their control when our data and the of and infrastructure, and the Well, are more over demand have they the And And for of and we've want on lot the value in seen doesn't directly. align investing linearly in spend They very we that particular, of make on queryable anything of logs. with retain the it, there. bill can to they all want. They all call, so we've logs, their them spending give to can can only some can levers able on some them. direct they do spend customers But flexibility they we We'll index customers hasn't a the new -- had we impact investing on should all it without their producing. more to it's limit for are and doing We APM also We're that's data adjustments of with what that

we've that's been So investing already something in.

us, a continuation for doing. change of been just So not it's big a what we've

Michael Turits

past. And a then, some investment Oli, that the -- in legacy of point R&D for I you interesting replacement. about an made legacy we've done in mean

an an at unlock need be R&D you do that cycle to you? point are or product what the upgrade that So that? perspective to And would could enable we very from important where to do

Olivier Pomel

at the or would I it's up are that, I for edge. IT the -- that all units, cloud we'll the leading customers standardize legacy equipment, are a distribution bring reach to point that cloud -- where mean stuff. the early so too. are their cloud that equipment connecting network of and noncloud mean start forefront sorts of their fore significant I their power do it of of maturing equipment, more still with network them that the we're that right physical more Today, and we And we're in a until is the the still we're to in of into now, time ones say sort standardize. part migration to market

that are of things not to are we yet. come, just signs at space that So there

Operator

Our Moskowitz next question Mizuho. is from Gregg from

Gregg Moskowitz

strong the Platform. Cloud the guess I'll question, a congratulations Security my echo very I quarter. regarding on just first

the CWS, In and a carte, app plan to addition well? to offer la Monitoring Security suite a as CSPM, is as security

Olivier Pomel

hard be we're will various packaged. that There few yet, mean a these haven't about products the we ways be any there. thinking can of likely options I communicated but pricing

Gregg Moskowitz

of spoke the Oli, seeing Can on large a AWS as partnerships their such update competitors then, deals recently and partners about Okay. your And there? you Azure. with activity that the and you're your number us uplift go-to-market hyperscaler one cloud closed in of

Olivier Pomel

still we what do So doing we’ve continued to with before. been

for of customers few the that partnership more – recently to and partnerships, cloud and on parts Azure it these deploy are cloud GCP see more another integrated more to We taken more. the forward as those also or is So that all directly partnership it we’re been There’s needs implemented. of a with has developing from console. and really partnerships makes marketplace there we’ve recently, getting to step still where easier be

also done So on And – working on there’s with making we’re completely still still but we’re we’re yet, that. not AWS. partnerships deeper still progress

it’s direction. this a I say in future. more point, at of our the would So of the not for trending is upside major it’s board And part happening potential right across the and things success, the this a are

Operator

from And our from Raimo next question Barclays. is Lenschow

Raimo Lenschow

hear okay? Can you me

Olivier Pomel

Yes.

Raimo Lenschow

Yes.

important Olivier, as you? a is? but talk like a about little this going you whole or Like now, like have starts, like people observability but me monitoring market, really never about come my you for opportunity how new out Okay. talk CI/CD it play not a can In Like is? it's everything Perfect. Congrats from obviously before. how I -- perspective. will towards like well. it the thought big theory is that's can from there where How bit

Olivier Pomel

Yes.

the engineers lot space is and early. So time spend We it's with interesting. deploying. It's a know product very very wrestling big testing because of

because they it where of closer pushes interesting operate time there. know we and it's a and so also spending boundary we happens and It's even environment more us involved we of the get what to And the lot spending where into before own their environment. clearly in and steady on developer workflows, the write embedded on development they of their laptop improvement break loops reach test

for of to environments. terms more those that interesting of in a very It's it's So optimizing and us massive reason. observing category

So we'll is opportunity have to see very we space know is the market large. problem the exactly but there, what

Raimo Lenschow

Yes.

David. Okay, And then one perfect. for question

You were XXX NRR number.

You remember you of came bit, kind a little number down when last year mentioned the it.

a Just -- you're and we but trending know that you you're how higher within lag about a are I give a number, directionally XXX not know going think but like going to what not seeing? I Is me do now? it? me effect? the trend-wise, to number number, there is Or just give like above,

David Obstler

compare continued and bit in use a increasing a the with we products, has Yes, of help of both in from in the think from more strong quarter, combined quarter. combination little the you won’t number the Yes, give products flattening trends. said side you second and we point but on the time I the the adoption resulted sales the the user in there of metrics in uptick

Operator

Olivier And over I'll for closing call the to comments. now back turn

Olivier Pomel

very just with for really, And all All that want And this very and just hard reiterate again to right. job are performance close this Thank their call, done. for I to work a also I'd well thank pleased worldwide we really Datadog very, you. quarter. our

thank you So all.

Operator

for Thank and you disconnect. you, now you call. Thank gentlemen. participating, may That today's ladies and concludes

Datadog (DDOG) 5 Aug 212021 Q2 Earnings call transcript