11 ms·

Datadog S-1

437 points by jonknee 7y ago

variacoes 7y ago
I've been meaning to learn how to read and understand an S1. Does anybody have any recommendations?
- bananatrumpet 7y ago
  For starters, don't take any advice from Hackernews.
  - duxup 7y ago
    Why is that?
  - dmlittle 7y ago
    Learning how to read a document and interpreting what it means are two different things. For the former you can learn how to do so from (almost) anyone who already knows how to do so. Your interpretation of the document might also vary from whomever taught you how to read it.
  - naringas 7y ago
    that piece of advice is a paradox if I choose to ignore it, I have actually followed it! heheheh
- onlyrealcuzzo 7y ago
  Hijacking this to maybe also get a recommendation -- For the purposes of better understanding S1s, I've been trying to find a good non-textbook to understand corporate finance in general. Anyone?
- kossae 7y ago
  I've similarly wanted to start learning some basics of reading financial statements. A friend of mine in a financial role recommended the book _The Basics of Understanding Financial Statements: Learn How to Read Financial Statements by Understanding the Balance Sheet, the Income Statement, and the Cash Flow Statement_. When asking how to "read and understand an S-1", I assume you mean the financial statement figured within, so I think that book may be beneficial to read, although I've not yet read it. If someone has further recommendations geared towards S-1's or other financial statement reading that would be great!
- random_savv 7y ago
  There are two interesting parts to an S1 (or a 10K): * a qualitative description of the business, as the management sees it. I find this super interesting and it's usually in the middle of the document - look for "management's discussion and analysis ..", or go here: https://www.sec.gov/Archives/edgar/data/1561550/000119312519227783/d745413ds1.htm#toc745413_10 https://www.sec.gov/Archives/edgar/data/1561550/000119312519... * the quantitative part. There are three key, but interrelated concepts to learn. The income statement, balance sheet, and cash flow statement. A intro course to accounting should be great, I can recommend this one: https://www.wallstreetprep.com/self-study-programs/accounting-crash-course/ https://www.wallstreetprep.com/self-study-programs/accountin...
  - variacoes 7y ago
    Thanks. These look very helpful. Going to set some time aside this weekend to get to it
- HeavenFox 7y ago
  Take an introduction to accounting course (https://www.coursera.org/learn/wharton-accounting https://www.coursera.org/learn/wharton-accounting is very good, and it's free to audit), and you should be able to understand the meaty part of S-1 (and 10-Q/10-K)
- nodesocket 7y ago
  Does anybody publish "cliff-notes" versions of S-1's? Seems like a great business idea.
Nelkins 7y ago
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?
- edaemon 7y ago
  HN is always interested in tech-related S-1s, but there has been a recent uptick in filings. The most common explanation I've seen for the increase is economic uncertainty -- everyone is trying to get their S-1s in while investors are available.
- jonknee 7y ago
  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 7y ago
    And more difficult to continue to secure funding for companies that have yet to make a profit.
- ProAm 7y ago
  > And if the latter, is there any reason? Recession fears
  - mbesto 7y ago
    This plus a lack of IPOs in general. People are trying to find "deals" in tech especially those who have seen their peers make fortunes on the FAANG's.
- aaronblohowiak 7y ago
  Money is cheap, downturn coming — good time to have liquidity event.
- rolltiide 7y ago
jfk13 7y ago
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.
- deleted 7y ago
  [deleted]
pixelmonkey 7y ago
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/1561550/000119312519227783/g745413g04k21.jpg https://www.sec.gov/Archives/edgar/data/1561550/000119312519...
- debt 7y ago
  I'm pretty green but I love how they break things out comma-separated like "Z, Y, X from years C, B, A, respectively" Feels slightly awkward as you have to make the associations in your head(Z to C, Y to B, etc.) but actually gives a way better sense of progress.
ggregoire 7y ago
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 7y ago
  It was founded in NYC https://en.wikipedia.org/wiki/Datadog#History https://en.wikipedia.org/wiki/Datadog#History
- NTDF9 7y ago
  1. Be a smart cookie 2. Move to US on a visa (typically H-1b) 3. Get green card (hope politics don't kick you out with immigration bullshit bureaucracy) 4. Start a company 5. Hire smart solid people 6. Work at your product for years 7. Become a public US company.
- trazire 7y ago
  It looks like it was founded in New York, but in general the process is just making a new American corporation and transferring the French corporation (or its assets) to the American one, and dissolving the French one. Also, getting work visas for your employees and hoping that the bureaucracies don't affect you/deny you/remove your work visas after being accepted.
deanmoriarty 7y ago
Are there any hints on what will their market cap be on the first day of trading?
actuator 7y ago
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/1561550/000119312519227783/d745413ds1.htm#toc745413_9 https://www.sec.gov/Archives/edgar/data/1561550/000119312519...
- nknealk 7y ago
  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.
  - actuator 7y ago
    Ah. Thanks, I somehow missed that.
  - tryitnow 7y ago
    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.
- catercowchris 7y ago
  In this case, Infrastructure Cost is part of Cost of Revenue (similar to COGS or Cost of Goods Sold). Cost of Revenue is defined on Page 61: > Cost of revenue primarily consists of expenses related to providing our products to customers, including payments to our third-party cloud infrastructure providers for hosting our software, personnel-related expenses for operations and global support, including salaries, benefits, bonuses and stock-based compensation, payment processing fees, information technology, depreciation and amortization related to the amortization of acquired intangibles and internal-use software and other overhead costs such as allocated facilities. > We intend to continue to invest additional resources in our platform infrastructure and our customer support and success organizations to expand the capability of our platform and ensure that our customers are realizing the full benefit of our platform and products. The level, timing and relative investment in our infrastructure could affect our cost of revenue in the future. Cost of Revenue and infrastructure costs are discussed on Pages 64 and 65: > Cost of revenue increased by $21.3 million, or 115%, for the six months ended June 30, 2019 compared to the six months ended June 30, 2018. This increase was primarily due to an increase of $17.9 million in third-party cloud infrastructure hosting and software costs, $1.0 million of depreciation and amortization, $1.6 million in personnel expenses as a result of increased headcount, $0.4 million of credit card processing fees and other fees, and $0.4 million in allocated overhead costs as a result of an increase in overall costs necessary to support the growth of the business and related infrastructure. Tip: Search the S-1 for "infrastructure" or "cost of revenue" to find other mentions of this.
mochomocha 7y ago
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.
perseusprime11 7y ago
What do their margins look like? Is it worth investing?
judge2020 7y ago
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.
bradhe 7y ago
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!
welder 7y ago
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.
- bdcravens 7y ago
  Had a similar bad experience. We had a situation where we were running instances with short durations; AWS bills by the second, but Datadog bills hourly. We ended up having a Datadog bill that was higher than our AWS bill! They had the opportunity to help us out - they ended up using it as leverage in their sales process, only willing to work with us IF we signed up for additional services. (I think a better word fits, but I won’t go there) We tried to work with them, but eventually just ate the expense.
  - welder 7y ago
    Yea their pricing model charging per host is dangerous with many small machines. It will become more of an issue as more companies move to distributed micro-services. How Datadog handled your situation is what happens when sales tries to take on customer support, as datadog is doing. Incentives are misaligned. Similarities to Yelp.
- ShakataGaNai 7y ago
  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.
tnolet 7y ago
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-large-tech-company/ https://blog.checklyhq.com/my-acquihire-adventure-with-a-lar...
- gonational 7y ago
  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 7y ago
    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.
ryougazilla 7y ago
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/
JonasJSchreiber 7y ago
Well done Datadog! Couldn't be happier for them—great product, great company!
arusahni 7y ago
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.
anarazel 7y ago
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).
aerovistae 7y ago
I interviewed with them and it was one of the worst experiences I've had interviewing. Really shabby company.
- nlh 7y ago
  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?
hugoromano 7y ago
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 7y ago
  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.
xtracto 7y ago
I got to briefly/tangentially Work with Ilan at Ooyala long time ago. Brilliant guy... very well deserved this outcome for the DD team.
waitwhatt 7y ago
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 7y ago
  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.
- Nostromos 7y ago
  What role were you interviewing for?
mohit343 7y ago
test
mohit343 7y ago
test1
publiccomps 7y ago
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

Datadog S-1

437 points by jonknee 7y ago

variacoes 7y ago

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

bananatrumpet 7y ago
For starters, don't take any advice from Hackernews.
- duxup 7y ago
  Why is that?
- dmlittle 7y ago
  Learning how to read a document and interpreting what it means are two different things. For the former you can learn how to do so from (almost) anyone who already knows how to do so. Your interpretation of the document might also vary from whomever taught you how to read it.
- naringas 7y ago
  that piece of advice is a paradox if I choose to ignore it, I have actually followed it! heheheh
onlyrealcuzzo 7y ago
Hijacking this to maybe also get a recommendation -- For the purposes of better understanding S1s, I've been trying to find a good non-textbook to understand corporate finance in general. Anyone?
kossae 7y ago
I've similarly wanted to start learning some basics of reading financial statements. A friend of mine in a financial role recommended the book _The Basics of Understanding Financial Statements: Learn How to Read Financial Statements by Understanding the Balance Sheet, the Income Statement, and the Cash Flow Statement_. When asking how to "read and understand an S-1", I assume you mean the financial statement figured within, so I think that book may be beneficial to read, although I've not yet read it. If someone has further recommendations geared towards S-1's or other financial statement reading that would be great!
random_savv 7y ago
There are two interesting parts to an S1 (or a 10K): * a qualitative description of the business, as the management sees it. I find this super interesting and it's usually in the middle of the document - look for "management's discussion and analysis ..", or go here: https://www.sec.gov/Archives/edgar/data/1561550/000119312519227783/d745413ds1.htm#toc745413_10 https://www.sec.gov/Archives/edgar/data/1561550/000119312519... * the quantitative part. There are three key, but interrelated concepts to learn. The income statement, balance sheet, and cash flow statement. A intro course to accounting should be great, I can recommend this one: https://www.wallstreetprep.com/self-study-programs/accounting-crash-course/ https://www.wallstreetprep.com/self-study-programs/accountin...
- variacoes 7y ago
  Thanks. These look very helpful. Going to set some time aside this weekend to get to it
HeavenFox 7y ago
Take an introduction to accounting course (https://www.coursera.org/learn/wharton-accounting https://www.coursera.org/learn/wharton-accounting is very good, and it's free to audit), and you should be able to understand the meaty part of S-1 (and 10-Q/10-K)
nodesocket 7y ago
Does anybody publish "cliff-notes" versions of S-1's? Seems like a great business idea.

Nelkins 7y ago

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?

edaemon 7y ago
HN is always interested in tech-related S-1s, but there has been a recent uptick in filings. The most common explanation I've seen for the increase is economic uncertainty -- everyone is trying to get their S-1s in while investors are available.
jonknee 7y ago
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 7y ago
  And more difficult to continue to secure funding for companies that have yet to make a profit.
ProAm 7y ago
> And if the latter, is there any reason? Recession fears
- mbesto 7y ago
  This plus a lack of IPOs in general. People are trying to find "deals" in tech especially those who have seen their peers make fortunes on the FAANG's.
aaronblohowiak 7y ago
Money is cheap, downturn coming — good time to have liquidity event.
rolltiide 7y ago

jfk13 7y ago

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.

deleted 7y ago
[deleted]

pixelmonkey 7y ago

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/1561550/000119312519227783/g745413g04k21.jpg https://www.sec.gov/Archives/edgar/data/1561550/000119312519...

debt 7y ago
I'm pretty green but I love how they break things out comma-separated like "Z, Y, X from years C, B, A, respectively" Feels slightly awkward as you have to make the associations in your head(Z to C, Y to B, etc.) but actually gives a way better sense of progress.

ggregoire 7y ago

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 7y ago
It was founded in NYC https://en.wikipedia.org/wiki/Datadog#History https://en.wikipedia.org/wiki/Datadog#History
NTDF9 7y ago
1. Be a smart cookie 2. Move to US on a visa (typically H-1b) 3. Get green card (hope politics don't kick you out with immigration bullshit bureaucracy) 4. Start a company 5. Hire smart solid people 6. Work at your product for years 7. Become a public US company.
trazire 7y ago
It looks like it was founded in New York, but in general the process is just making a new American corporation and transferring the French corporation (or its assets) to the American one, and dissolving the French one. Also, getting work visas for your employees and hoping that the bureaucracies don't affect you/deny you/remove your work visas after being accepted.

deanmoriarty 7y ago

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

actuator 7y ago

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/1561550/000119312519227783/d745413ds1.htm#toc745413_9 https://www.sec.gov/Archives/edgar/data/1561550/000119312519...

nknealk 7y ago
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.
- actuator 7y ago
  Ah. Thanks, I somehow missed that.
- tryitnow 7y ago
  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.
catercowchris 7y ago
In this case, Infrastructure Cost is part of Cost of Revenue (similar to COGS or Cost of Goods Sold). Cost of Revenue is defined on Page 61: > Cost of revenue primarily consists of expenses related to providing our products to customers, including payments to our third-party cloud infrastructure providers for hosting our software, personnel-related expenses for operations and global support, including salaries, benefits, bonuses and stock-based compensation, payment processing fees, information technology, depreciation and amortization related to the amortization of acquired intangibles and internal-use software and other overhead costs such as allocated facilities. > We intend to continue to invest additional resources in our platform infrastructure and our customer support and success organizations to expand the capability of our platform and ensure that our customers are realizing the full benefit of our platform and products. The level, timing and relative investment in our infrastructure could affect our cost of revenue in the future. Cost of Revenue and infrastructure costs are discussed on Pages 64 and 65: > Cost of revenue increased by $21.3 million, or 115%, for the six months ended June 30, 2019 compared to the six months ended June 30, 2018. This increase was primarily due to an increase of $17.9 million in third-party cloud infrastructure hosting and software costs, $1.0 million of depreciation and amortization, $1.6 million in personnel expenses as a result of increased headcount, $0.4 million of credit card processing fees and other fees, and $0.4 million in allocated overhead costs as a result of an increase in overall costs necessary to support the growth of the business and related infrastructure. Tip: Search the S-1 for "infrastructure" or "cost of revenue" to find other mentions of this.

mochomocha 7y ago

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.

perseusprime11 7y ago

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

judge2020 7y ago

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.

bradhe 7y ago

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!

welder 7y ago

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.

bdcravens 7y ago
Had a similar bad experience. We had a situation where we were running instances with short durations; AWS bills by the second, but Datadog bills hourly. We ended up having a Datadog bill that was higher than our AWS bill! They had the opportunity to help us out - they ended up using it as leverage in their sales process, only willing to work with us IF we signed up for additional services. (I think a better word fits, but I won’t go there) We tried to work with them, but eventually just ate the expense.
- welder 7y ago
  Yea their pricing model charging per host is dangerous with many small machines. It will become more of an issue as more companies move to distributed micro-services. How Datadog handled your situation is what happens when sales tries to take on customer support, as datadog is doing. Incentives are misaligned. Similarities to Yelp.
ShakataGaNai 7y ago
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.

tnolet 7y ago

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

gonational 7y ago
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 7y ago
  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.

ryougazilla 7y ago

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/

JonasJSchreiber 7y ago

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

arusahni 7y ago

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.

anarazel 7y ago

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).

aerovistae 7y ago

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

nlh 7y ago
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?

hugoromano 7y ago

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 7y ago
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.

xtracto 7y ago

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

waitwhatt 7y ago

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 7y ago
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.
Nostromos 7y ago
What role were you interviewing for?

mohit343 7y ago

test

mohit343 7y ago

test1

publiccomps 7y ago

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