Insider trades can give investors a more complete view of activity within the world’s publicly-listed companies. No one has more information in relation to a company’s prospects than its executives and directors.
In this report, we are going to highlight some interesting insider buying at Datadog Inc (DDOG:US). Datadog is a technology company that provides cloud monitoring as a service. Its services help businesses secure their systems and avoid downtime. The company is listed on the Nasdaq and currently has a market cap of $24.29 billion.
Insider buying at Datadog
Our insider transaction data shows that between November 7 and November 14, board member Matt Jacobson purchased 1,016,859 DDOG shares for his investment firm ICONIQ Capital. The average price paid by Jacobson was just under $69 per share. In total, the insider invested around $70 million in Datadog.
First insider buying since IPO
Mr. Jacobson is an experienced tech investor. He is a General Partner at ICONIQ, where he has worked since September 2013. Prior to ICONIQ, he held investing roles at Battery Ventures and Technology Crossover Ventures. Currently, he serves on the boards of GitLab, Collibra, BambooHR, Braze, Sprinklr, Relativity, InVision, Highspot, and Intercom.
What stands out here is that Mr. Jacobson’s buys represent the first insider buying activity since the company’s Initial Public Offering (IPO) in 2019. This suggests that the insider sees value in the stock right now.
Strong top-line growth
Datadog’s recent Q3 results showed that the company is growing at a rapid rate right now.
For the period, revenue amounted to $436.5 million, an increase of 61% year over year. Meanwhile, operating cash flow for the quarter was $83.6 million, up from $67.4 million in Q3 2021.
As of September 30, 2022, the group had about 2,600 customers with annual recurring revenue (ARR) of $100,000 or more, an increase of 44% from a year earlier.
Looking ahead, Datadog said that it expects to generate revenue of between $445 million and $449 million for Q4, up from $326.2 million in Q4 2021. It also expects to generate a profit in Q4, with non-GAAP EPS of between $0.90 and $0.92 anticipated.
In light of this strong growth, and the expected profitability, we see the insider buying here as a bullish indicator.