What happened

Shares of Datadog (NASDAQ:DDOG) climbed 21.4% in November, according to data from S&P Global Market Intelligence, after the recently IPO'd data-analytics specialist announced strong third-quarter 2019 results.

So what

Datadog stock surged nearly 17% on Nov. 13 -- the first trading day after its quarterly report hit the wires -- with the company showcasing an 88% increase in revenue to $95.9 million and a modest $0.7 million in adjusted net income (or roughly breakeven on a per-share basis). Most analysts were modeling an adjusted loss of $0.14 per share on revenue of $84.7 million.

Stock market data and charts on a colorful display indicating volatility.


"Datadog has established itself as the leading monitoring and analytics platform and we have continued to extend our capabilities during the quarter," stated Datadog co-founder and CEO Olivier Pomel. "[...] We believe we are still in the early innings of a very large market opportunity, and we remain focused on solving our customers' pain points."

Now what

For the fourth quarter of 2019, Datadog told investors to expect revenue between $101 million and $103 million, with an adjusted net loss per share of $0.02 to $0.01.

As a result, Datadog is targeting full-year 2019 revenue between $350 million and $352 million, with an adjusted net loss per share of between $0.12 and $0.11. By contrast, most analysts at the time were modeling a much wider 2019 net loss of $0.30 per share on revenue closer to $330 million.

In the end, Datadog's first-ever quarterly report as a publicly traded company exceeded even the most bullish investors' hopes last month --and the stock responded in kind.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.