糖心视频

filed its with the Securities and Exchange Commission on Friday, revealing its recent financial results and general health.

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The firm, best known for its work in monitoring and analytics services for developers and IT operation teams, listed a $100 million raise in its prospectus, a provisional number that will change when the company sets a price range for its equity.

Datadog has more than 8,000 customers and estimates its market opportunity to be $35 billion, according to its S-1 filing. The company brought on Morgan Stanley, J.P. Morgan, Goldman Sachs, Credit Suisse, and others as underwriters for the IPO.

Datadog joins Cloudflare, The We Company, SmileDirectClub, and Ping in filing in the last few weeks to go public. While the current IPO crop is somewhat barren, the next cohort of companies going public is getting deeper.

Let鈥檚 explore the company鈥檚 numbers from today鈥檚 SEC filing.

Financial Performance

Broadly, Datadog is a software as a service (SaaS) business that is quickly growing in a high-margin business. And unlike some other 2019 offerings that featured growth coupled to stiff deficits, Datadog鈥檚 losses are somewhat modest and the firm has a history of turning the occasional profit.

Turning to the numbers, Datadog grew its revenue from $100.8 million in 2017 to $198.1 million in 2018. Looking at its more recent performance, the company鈥檚 top line grew from $85.4 million in the first half of 2018 to $153.3 million in H1 2019.

Datadog wrapped H1 2019 with gross margins in the low-seventies, inclusive of share-based compensation. That鈥檚 a fine number for a SaaS company, but not a figure that makes our hair stand on end.

However, the company鈥檚 operating costs are not overwhelming when compared to its gross profit (gross margin is the percent of revenue that is left over after deducting the cost of revenue expenses, the result of which is gross profit). Datadog posted a $13.7 million operating loss in the first half of 2019. That result was markedly worse from its year-ago operating profit of $0.5 million.

But, for a company growing 80 percent in the nine-figure revenue range, an operating loss of less than nine percent is perfectly workable in today鈥檚 atmosphere. (Datadog鈥檚 net results are closely correlated to its more-inclusive net results; therefore, the firm鈥檚 operating results are more interesting for our use.)

Turning to cash, the company had $52.3 million in cash (and equivalents) at the end of Q2 2019. Datadog generated operating cash flow in 2017, 2018, and the first half of 2019. The firm鈥檚 operating cash flow did dip from $10.6 million in H1 2018 to just under $3 million in the first two quarters of 2019.

The firm鈥檚 investing cash flow is negative, however, meaning that Datadog鈥檚 free cash flow was negative in the first half of 2019. That said, it wasn’t negative by much, making the firm a perfectly fine company in today鈥檚 growth-over-profit IPO landscape.

So how is Datadog growing as fast as it is while not losing an ocean of money? The firm notes in its S-1 document that its net retention was 146 percent in H1 2019, down modestly from 151 percent in 2018 and up from its 141 percent 2017 result. Net retention tracks how much more existing customers tend to spend each year on a company鈥檚 products.

That pace of account expansion helped the firm grow from $70.0 million in revenue during the first quarter of 2019 to $83.2 million just three months later. In the year-ago Q2, Datadog鈥檚 revenue was a far slimmer $45.7 million.

Summing, Datadog has quick growth, strong SaaS metrics, slim operating and cash burn, and a history of the odd small profit and positive operating cash flow. Now let鈥檚 recall how it got here.

Path To Today

Datadog has raised $147.9 million in total funding, with its (Series D) raising $94.5 million in January 2016. It counts , , and among its investors.

Index owns the most of the company among all parties with just over 20 percent of shares before IPO stock is sold. OpenView is second, with 16 percent. Olivier Pomel, CEO of the company, owns just over 14 percent. Iconiq is next with 11.3 percent, and executive Alexis L锚-Qu么c and RTP ventures each own over 8 percent in the company.

The last time Datadog raised money back in 2016 it declined to discuss its new valuation, according to So we鈥檙e extra curious about its first pricing interval, as the company鈥檚 estimate of its own worth will help fill in a gap in our knowledge.