Datadog Inc (NASDAQ:DDOG) stock was on the backfoot despite results that at surface level appear positive, including a 26% rise in fourth quarter revenue.
Reported at $590 million, fourth quarter revenue was driven by a significant increase in customer numbers and, particularly, an increase in larger companies under its recurring revenue model.
Operating cash flow for the quarter totalled $660 million, whilst free cash flow came in at $598 million.
Fourth quarter adjusted earnings per share was reported at $0.44, above consensus forecasts of $0.39.
In terms of outlook, Datadog told investors it expects revenue for the fourth quarter to be between $587 million and $591 million, and predicted net income per share is seen between $0.33 and $0.35 – indicating a slower rate compared to Q4.
As a cloud-services provider Datadog exists within an ecosystem that is burgeoning largely through the progression of AI and its related infrastructure, and as such innovation and development remains a key theme.
"During 2023, we delivered over 400 new features and capabilities to help our customers deliver on their cloud migration and digital transformation plans,” chief executive Olivier Pomel said in a statement.
"Looking forward to 2024, we are excited about our plans to deliver more innovation and help our customers with their needs in modern Observability, Cloud Security, Software Delivery, and Cloud Service Management."
In New York, Datadog stock was down 6.27% changing hands at around $126.30 in Tuesday’s premarket dealing – albeit prior to today’s slide Datadog was up around 17% in 2024 to date.