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United States securities and exchange commission logo
June 5, 2020
David Obstler
Chief Financial Officer
Datadog, Inc.
620 8th Avenue, 45th Floor
New York, NY 10018
Re: Datadog, Inc.
Form 10-K for the
Fiscal Year Ended December 31, 2019
Filed February 25,
2020
File No. 001-39051
Dear Mr. Obstler:
We have reviewed your May 21, 2020 response to our comment letter
and have the
following comments. In some of our comments, we may ask you to provide
us with information
so we may better understand your disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your response to these comments, we may have
additional
comments. Unless we note otherwise, our references to prior comments are
to comments in our
May 1, 2020 letter.
Form 10-K for the Year Ended December 31, 2019
Management's Discussion and Analysis of Financial Condition and Results
of Operations
Factors Affecting Our Performance, page 38
1. You state in your
response to prior comment 1 that your business, including your ability to
land-and-expand sales
to existing customers, is primarily managed based on growth
in revenue and
operating income. Please explain further how you measure the success of
your land-and-expand
model using such measures. In this regard, you state that
the dollar-based net
retention rate is one indicator of your ability to execute your land-
and-expand model as it
supplements such GAAP results and in future filings you intend to
include a discussion of
whether the dollar-based net retention rate is above or below
130%. You previously
disclosed that dollar-based net retention rate was 141%, 151% and
146% at December 31,
2017 and 2018 and June 30, 2019, respectively. Please tell us the
David Obstler
Datadog, Inc.
June 5, 2020
Page 2
dollar-based net retention rates at December 31, 2019 and March 31,
2020 and explain
further how the specific level that you selected best supports your
results discussion.
Also, to the extent this rate falls significantly below such level,
tell us how you anticipate
addressing such change.
2. We note from your response to prior comment 2 that you do not believe
providing the
percentage of ARR from customer with greater than $100,000 of ARR is
important to an
understanding of your business. However, we also note your statements
in both the Q3
and Q4 fiscal 2019 earnings calls in which you indicated that you
expect this cohort of
customers to be a larger driver of your future growth. Considering
over 70% of your ARR
(as disclosed in each of your earnings calls) is derived from
approximately 8% of your
customers, please explain further why this information would not be
important to an
investors understanding of your business and potential for future
growth.
You may contact Eiko Yaoita Pyles, Staff Accountant, at 202-551-3587 or
Kathleen Collins, Accounting Branch Chief, at 202-551-3499 with any questions.
FirstName LastNameDavid Obstler Sincerely,
Comapany NameDatadog, Inc.
Division of
Corporation Finance
June 5, 2020 Page 2 Office of
Technology
FirstName LastName