Datadog Lifts the Expected Price Range for IPO
Datadog has registered an amended S-1 form with the U.S. Securities and Exchange Commission (SEC) regarding its initial public offering (IPO). The company now expects to price its 24.0 million shares in the range of $24 to $26 per share, with an overallotment option for an additional 3.6 million shares. The company previously had its shares priced in the range of $19 to $22 apiece. At the maximum price, the entire offering is valued up to $717.6 million. The company intends to list its shares on the Nasdaq under the symbol DDOG.
The underwriters for the offering are Morgan Stanley, Goldman Sachs, JPMorgan, Credit Suisse, Barclays, Jefferies, RBC Capital Markets, JMP Securities, Raymond James, Stifel, William Blair and Needham.
This company is the monitoring and analytics platform for developers, IT operations teams and business users in the cloud age.
Datadog’s software as a service platform integrates and automates infrastructure monitoring, application performance monitoring and log management to provide unified, real-time observability of its customers’ entire technology stack. Datadog is used by organizations of all sizes and across a wide range of industries to enable digital transformation and cloud migration, drive collaboration among development, operations and business teams, accelerate time to market for applications, reduce time to problem resolution, understand user behavior and track key business metrics.
As of June 30, the company had roughly 8,800 customers, increasing from approximately 7,700, 5,400 and 3,800 customers as of December 2018, 2017 and 2016, respectively. Approximately 590 of these customers as of June 30 had annual run-rate revenue, of $100,000 or more.
In terms of its finances, the firm detailed in the filing:
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.
The company intends to use the net proceeds from this offering for working capital and general corporate purposes.