
Datadog S-1 - jonknee
https://www.sec.gov/Archives/edgar/data/1561550/000119312519227783/d745413ds1.htm
======
pixelmonkey
These are the two juiciest paragraphs for SaaS geeks:

> We have a highly efficient go-to-market model, which consists of a self-
> service tier, a high velocity inside sales team, and an enterprise sales
> force. As of June 30, 2019, we had approximately 8,800 customers, increasing
> from approximately 7,700, 5,400 and 3,800 customers as of December 31, 2018,
> 2017 and 2016, respectively. Approximately 590 of our customers as of June
> 30, 2019 had annual run-rate revenue, or ARR, of $100,000 or more,
> increasing from approximately 450, 240 and 130 customers as of December 31,
> 2018, 2017 and 2016, respectively, accounting for approximately 72%, 68%,
> 60% and 48% of our ARR, respectively. Further, as of June 30, 2019, we had
> 42 customers with ARR of $1.0 million or more, up from 29, 12 and two
> customers as of December 31, 2018, 2017 and 2016, respectively. As of June
> 30, 2019, our 10 largest customers represented approximately 14% of our ARR
> and no single customer represented more than 5% of our ARR.

... and ...

> Our business has experienced rapid growth and is capital efficient. Since
> inception, we have raised $92.0 million of capital, net of share
> repurchases, and we had $63.6 million of cash, cash equivalents and
> restricted cash as of June 30, 2019. We generated revenue of $100.8 million
> and $198.1 million in 2017 and 2018, respectively, representing year-over-
> year growth of 97%. Our revenue was $85.4 million in the six months ended
> June 30, 2018 compared to $153.3 million in the six months ended June 30,
> 2019, representing period-over-period growth of 79%. Substantially all of
> our revenue is subscription software sales. Our net (loss) income was $(2.6)
> million, $(10.8) million, $0.5 million and $(13.4) million for the years
> ended December 31, 2017 and 2018 and the six months ended June 30, 2018 and
> 2019, respectively. We generated operating cash flow of $13.8 million, $10.8
> million, $10.6 million and $3.0 million in 2017 and 2018 and the six months
> ended June 30, 2018 and 2019, respectively. Our free cash flow was $6.0
> million, $(5.0) million, $1.5 million and $(6.4) million in 2017 and 2018
> and the six months ended June 30, 2018 and 2019, respectively.

Very impressive SaaS business, especially in such a competitive space. And I'm
a happy customer for several years. This chart of their quarterly revenue run
rate going back to 2016 is truly amazing and will make every SaaS founder
green with envy:

[https://www.sec.gov/Archives/edgar/data/1561550/000119312519...](https://www.sec.gov/Archives/edgar/data/1561550/000119312519227783/g745413g04k21.jpg)

~~~
mdorazio
So nice to see an S-1 from a SaaS company with actually solid financials and
clear explanations of where the money is going. This is what IPO announcements
_should_ look like instead of being packed with hype, hopes, and dreams.

~~~
pixelmonkey
Agreed! For all the hype and noise out there, the combination of SaaS and
business value has created some phenomenal companies, both in terms of growth,
and in terms of unit economics. And, as a user, I can say Datadog solves a
real (and burning) problem for product engineering teams, and, though
expensive, is worth every penny.

------
actuator
Their financials on the surface and the growth look really good. Congrats to
the whole DataDog team on this! I used it in my previous job and loved it. I
love how quick they were to add support for new things and how easy it was to
configure everything.

Since they are a SaaS startup which deals a lot with data and compute, I
wanted to see their infra cost. I was looking through the consolidated
financials[1] and I didn't find something that referred to infra explicitly. I
am guessing "Research and Development" operating expense will cover employee
compensation(stock and salary). So, would the infra costs be the one in
"General and Administrative"?

[1]
[https://www.sec.gov/Archives/edgar/data/1561550/000119312519...](https://www.sec.gov/Archives/edgar/data/1561550/000119312519227783/d745413ds1.htm#toc745413_9)

~~~
nknealk
Infra costs would roll up into COGS since they're variable costs. So the line
item for Cost of Revenue captures that I believe. G&A is for fixed costs.

~~~
tryitnow
Just to clarify, infra costs are under COGS because infra costs can be
directly attributed to production of what is being sold, not because they're
variable. You can have fixed costs in COGS as long as they're directly
attributable to production.

G&A can also contain both fixed and variable costs. G&A is for operating
expenses that can't be directly attributed to production.

------
welder
Love their product, hate their shady billing.

I'm in the middle of a bad experience with Datadog's billing/sales team. My
monthly Custom Metrics usage wasn't being billed for because they said they
didn't have a way to track it. Naturally my usage gradually increased because
without the monthly bill increasing. When renewing a while back they went over
my usage on phone and quoted prices, same usage profile as this month. Now
this month my bill increased almost 400% and they said "oh we just soft-
launched billing for this feature without notifying you". No heads-up when
communicating with them that I wasn't actually being billed for my usage.

Still trying to get a refund for this curveball bill. Their sales team keeps
forever escalating to management, leadership, and they say it has to be
approved by a C-level. It's been over 20 days and they say it might take 2-3
more weeks before C-level makes a decision on credit or not. I've never heard
of this many layers involved in something like this before with other
companies.

~~~
ShakataGaNai
Same. At several companies I've been at we've used or investigated Datadog.
One place accidentally spun up a bunch of EMR nodes on AWS for a single run
(less than 1 hour), to which we got charged their going rate ($15/mo?) for
every instance - even though they were only up for an hour. DD refused to
reverse this, though eventually did help up make sure those nodes got excluded
going forward ... gee thanks. $15/hr/node for monitoring is too rich for my
blood.

Most recently it was looked at to help monitor a small Kubernetes test
cluster. 3 nodes. Now the base rate of $18/mo is just fine... except now they
charge $1/mo/container past 10 containers per host. Because K8s (depending on
how you install it) runs a bunch of little containers handling various back
end things, you might not deploy anything to the cluster and still be WAY over
that 10 container limit. In our case it came out to like $200/mo to monitor 3
nodes - that were no where near fully loaded.

They've got a great product but their billing just has not ever really made
sense. While I haven't used them, Wavefront makes a lot more sense - pay per
metric. Got a bunch of containers that don't need monitoring, then don't send
metrics (or send them infrequently). Easy.

~~~
stingraycharles
All that you’ve said resonates with my experience, but:

“Because K8s (depending on how you install it) runs a bunch of little
containers handling various back end things, you might not deploy anything to
the cluster and still be WAY over that 10 container limit. ”

The way we manage that is to explicitly filter for containers. Don’t monitor
all containers by default, make it opt-in and you’ll be fine.

------
arusahni
Their sales teams are ridiculously aggressive. I've received 9+ calls from
them this month, have told them that my org isn't interested, and won't be
revisiting the decision for a few years. It's soured me on them altogether.

------
Nelkins
Seems like more S-1 filings have been making it to the front page of HN. Is
that because more people on HN are interested in them, or because there's been
a recent uptick in S-1 filings? And if the latter, is there any reason?

~~~
jonknee
A lot of tech IPOs recently after a decently long drought. There is conjecture
that people are rushing to get them filed before a recession hits and it's
more difficult to go public.

~~~
jcwayne
And more difficult to continue to secure funding for companies that have yet
to make a profit.

------
anarazel
Their sales/marketing teams are way too aggressive, IME. They cold called me
on my private number, despite being on the do-not-call list. At several
conferences they've the one booth one had to be careful to stay away from,
lest one get into pretty aggressive sales talks (as in, "not interested" and
starting to walk leading to booth folks walking with me for a bit, and talking
to me).

------
tnolet
Their product is great.

But the people I met there last year during a maybe-but-not-quite acquihire
adventure we're also great. I wish them all the best with this IPO.

For those interested, I wrote a blog about what it's like for a solo founder
to (almost) be picked up by company like Datadog.

[https://blog.checklyhq.com/my-acquihire-adventure-with-a-
lar...](https://blog.checklyhq.com/my-acquihire-adventure-with-a-large-tech-
company/)

~~~
gonational
Presumably you would have received options - in hindsight does any percent of
you wish it would have happened now that they’re going public?

~~~
tnolet
When I was there talking it was already abundantly clear an IPO was in the
works. So, no. I don’t regret anything and am totally fine with the outcome.

------
waitwhatt
This company has a shite hiring process. Ask you to submit pull request on
github with answers to a challenge (and you can publicly view other people's
answers as it is a public repo).

The answers were straight forward and I didn't pass. And I could see my
answers were the same as other people submitting. Very odd company.

~~~
mjfisher
I've never quite understood the rationale behind the 'public PR' method of
submitting coding challenges.

I understand it's much lower friction for the recruitment team, but having
everyone else's answers public too kind of defeats the point entirely.

------
hugoromano
My service contract expired with them this Friday. Opted not to renew because
of price change in synthetics product 100x initial release. The product is
reliable, but billing is troubling.

~~~
clarkdave
The Synthetics pricing does seem unreasonably high.

We were using Synthetics during beta alongside Pingdom - doing pretty much the
same on both. Beta period ended and sales rep said our Synthetics bill would
be something crazy, like 10x our Pingdom bill, and it’d start next month (they
later said that was a mistake and it would actually start in 2 months, when I
pushed back).

We immediately suspended all our Synthetics tests. It’s nice having them with
the rest of our Datadog stuff, but it’s not 10x better than Pingdom.

Datadog is still a great tool overall, but experiences like that make me wary
of putting all our eggs in the DD basket and getting locked in.

------
variacoes
I've been meaning to learn how to read and understand an S1. Does anybody have
any recommendations?

~~~
bananatrumpet
For starters, don't take any advice from Hackernews.

~~~
naringas
that piece of advice is a paradox

if I choose to ignore it, I have actually followed it!

heheheh

------
judge2020
Love the product through and through, my only annoyance is "live tail" and log
lines in general show up from the top scrolling down, aka the opposite of how
regular logs scroll.

------
publiccomps
I wrote an article summarizing the S-1 and contextualizing Datadog's metrics
against its competitors (New Relic, Elastic, Splunk):

[https://medium.com/@jonbma/datadog-s-1-teardown-35934690e76f](https://medium.com/@jonbma/datadog-s-1-teardown-35934690e76f)

A beast of a business indeed

------
bradhe
One of the top 10 metrics they choose to highlight is operating loss in the
past 6 months. They just knew what everyone was going to look for anyway!

------
ryougazilla
For those interested in the financials or model building, you can grab all the
tables from the S1 in a single excel file here:
[https://get.sentieo.com/datadog-ipo/](https://get.sentieo.com/datadog-ipo/)

------
jfk13
This was already submitted at
[https://news.ycombinator.com/item?id=20781524](https://news.ycombinator.com/item?id=20781524),
not sure why it didn't get marked as a duplicate.

------
xtracto
I got to briefly/tangentially Work with Ilan at Ooyala long time ago.
Brilliant guy... very well deserved this outcome for the DD team.

------
deanmoriarty
Are there any hints on what will their market cap be on the first day of
trading?

------
mochomocha
Congrats to the whole Datadog team! I have been an avid user of it at a
previous job and loved the product. Not surprised to see them have a solid
business. When the product is good, people buy it.

------
ggregoire
Just for curiosity, what's the legal process to go from being a French startup
to a public US company? I guess there is some paperwork.

~~~
Fiaxhs
It was founded in NYC

[https://en.wikipedia.org/wiki/Datadog#History](https://en.wikipedia.org/wiki/Datadog#History)

------
JonasJSchreiber
Well done Datadog! Couldn't be happier for them—great product, great company!

------
perseusprime11
What do their margins look like? Is it worth investing?

------
mohit343
test1

------
mohit343
test

------
aerovistae
I interviewed with them and it was one of the worst experiences I've had
interviewing. Really shabby company.

~~~
nlh
Can you elaborate on your experience rather than just dropping a hate-bomb?
(I’m actually curious). What was so bad about the interview? Why did that make
the company shabby?

