Datadog, Inc. Class A Common Stock Citi Global TMT Conference

Thank you for having me. We actually were a 15-minute walk away from here, so I can get right back to work afterwards.

Well, first of all, it has been a lot of growth. When we took the company public, we were right in the middle of, I would say, the early innings of the cloud migration, and that is what we were known for. That is what made the company. Today, we are in the middle of the AI transition, which I think is a lot of the same, quite a little bit bigger. We have come a long way since we took the company public. I think we are an order of magnitude larger in terms of revenue. We are an order of magnitude. I think we also increased the share price an order of magnitude since we went public. All that is great. Yeah.

I think Yeah. Yeah. I think that's also People ask me sometimes, "So why are you still here?" I'm here for the next 10 years.

I'm here for this other order of magnitude we think is in front of us that we can get. When you look at the last quarter, we've seen an acceleration of growth. I think earnings are We had our earnings a month ago, so I might get some of the numbers slightly wrong. But we accelerated to the, I think, 36% year-over-year growth after a number of quarters of sequential acceleration. What's especially exciting to us is that this acceleration happens throughout the customer base. It's not just a matter of AI customers growing very fast. Of course they are. The rest of the business, the non-AI customers, all the companies that existed beforehand and that are not primarily in the business of AI, have been accelerating over the past year or two.

I think we said on the call, we accelerated from one year ago from, I think, 18% year-over-year growth for that part of the business to the high 20s. So massive acceleration there. What this really shows is that the AI transformation is happening. It's touching the whole customer base for us. Just as in the context of cloud migration, observability was a key part of the transformation. We also see that observability is a key part of the AI transformation. We see it in the way this happens with the customers, but we also see it in when we think of the end state. So where is everything going?

Where do we end up 5 or 10 years from now? Observability is probably the only category that remains. If AI does a lot more of the work, whatever the work is, keeping tabs on the AI, understanding what it's doing, why, whether it's aligned, whether we're getting the right outcomes for it, whether we're doing it at the right cost, I think is probably the last software category that remains at the end. Feel pretty excited about it and very busy building it out.

It's actually a lot of the same things. When you think of what made us successful in the cloud age, part of it was that the roles were changing. You needed to ship faster, you needed to iterate faster as a result. Roles that used to be completely separate, between development and operations, became smushed together. I think in the age of AI, we'll see even more of that. I think we can talk a little bit more about it later, but we will see quite a bit of that between not just development and operations, but also security, maybe some of the business functions. You see the way people can build software today. Non-technical product managers can build software.

All of those roles are being pushed together, which benefits us as a business because we are in the business of bringing those people into one platform and having that one representation of the world that cuts across all of those different concerns. In terms of what we can observe, we do see a lot of the same underpinnings. We see companies need to be more digital. They need to interact with their customers digitally. They need to build up their infrastructure. They need to have applications that perform well. I would say 80% or 90% of the AI buildup actually looks like the cloud buildup. Then there is a few new layers that are appearing. There is a very deep stack we need to be able to observe and manage for the AI transition, but we will see all that.

Just to backtrack for a minute, we talk a lot about AI and all of the net new and all of the new areas we can get into. Even if you just restrict yourself to observability and the core of what we do, it is a market where we are the leader today. We have about 13%, 14% market share. That market is growing 15%, 20%, 25%, 30%, depending on who you ask, year-over-year. You do not have to have a lot of imagination to understand how we can grow 5X or 10X from that. Just the core of what we do, just extending to the tool stack, that is going to grow even faster now, I think makes for a great business story.