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Datadog stock tanks 12% despite company’s Q2 beat

Shares of Datadog Inc. fell more than 12% in the extended session Thursday after cloud monitoring software company reported second-quarter adjusted earnings and sales above Wall Street expectations and said its customers are under “business pressures” due to the pandemic. Datadog said it earned $284,000, or breakeven, in the quarter, contrasting with a loss of $3.95 million, or 5 cents a share, in the year-ago period. Adjusted for one-time items, the company earned 5 cents a share, versus an adjusted loss of 7 cents a share a year ago. Revenue rose 68% to $140 million, the company said. Analysts polled by FactSet expected an adjusted profit of 1 cent on sales of $135 million. “While the current macro environment has caused business pressures for our customers, we expect it to accelerate digital transformation and cloud migration over the long-term,” Chief Executive Olivier Pomel said in a statement. “We continue to execute on our strategic priorities to position for the long-term, including rapid product innovation and expansion of our go-to-market.” Datadog, which had an initial public offering in August 2019, said it expects third-quarter revenue between $143 million and $145 million, and an adjusted EPS between breakeven and 1 cent. For the full year, the company called for revenue between $566 million and $572 million, and adjusted EPS between 11 cents and 13 cents. Datadog stock ended the regular session down nearly 5%. The shares have nearly doubled in the past three months. Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.

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