Shares of cloud-based analytics software maker Datadog plunged by 10% in late trading even though the company delivered third-quarter revenue and profit that was comfortably ahead of consensus, and forecast this quarter's results higher as well.
Datadog's chief executive, Olivier Pomel, said the company was "pleased with our strong results for the third quarter, which demonstrated continued high growth at scale."
Added Pomel, the coronavirus pandemic "has driven organizations globally and across industries to prioritize their digital operations like never before, further strengthening the cloud's position as the IT architecture of choice." He added that Datadog "continues to be a trusted partner in enabling digital transformation and cloud migration."
Datadog cited two big partnerships it negotiated in the quarter. One was with Microsoft. That partnership will make Datadog "available directly from the Azure console" so that "Azure customers will be able to purchase a Datadog plan with the ability to draw from their committed Azure spend, implement Datadog few just a few clicks, as well as manage Datadog natively from the Azure Portal." The company's sales reps with collaborate with Microsoft Azure reps, it said.
And a partnership with Google's Google Cloud Platform will bring collaboration with Google's sales team.
For the three months ending in September, Rackspace's revenue rose 61%, year over year, to $154.7 million, yielding EPS of 5 cents. That was better than the average Wall Street projection for $144 million and a penny per share profit.
For the current quarter, the company sees revenue in a range of $162 million to $164 million, and EPS of a penny to two cents per share. That compares to current Street consensus of $155.2 million and one penny per share.
Datadog shares fell over 10% in late trading to $83.25. The stock had risen 145% through Tuesday's close.