Datadog Stock Dips After Seekret Acquisition, Earnings Report

Datadog’s stock fell early today after its second quarter financial earnings report, which also disclosed the company’s acquisition of API specialist Seekret.

The market doesn’t seem too bullish about Datadog’s acquisition of API specialist Seekret and its second quarter financial report as the company’s stock dropped 8 percent early Thursday morning. However, Datadog’s stock is rebounded somewhat in later morning trading.

Datadog unveiled today its purchase of Seekret in a move to boost its API observability, governance and automation capabilities for the entire application lifecycle.

“APIs are the building blocks for modern software and are therefore essential to every Datadog customer,” said Datadogs’ Renaud Boutet, senior vice president of product, in a statement. “Adding Seekret’s platform will give us an opportunity to build many different capabilities for our customers for API observability, security and collaboration.”

The New York City-based company also reported today its second quarter financial earnings results as well as its third quarter revenue outlook.

[Related: Aviatrix’s IPO Plan And $50 Billion Market Cap Pursuit]

Datadog generated $406 million in revenue during its second quarter, up a whopping 74 percent year over year, besting analysts’ expectations.

However, the company recorded a net loss of about $5 million for the quarter.

Additionally, Datadog said it expects to generate total revenue of approximately $412 million for its current third quarter. That guidance was slightly lower than analysts’ consensus.

After Datadog’s stock fell 8 percent at the start of Thursday trading, the company’s stock rebounded somewhat later on, trading around $106.50 per share at 10:40 a.m. EDT, down more than 5 percent.

The company expects to generate total revenue of $1.62 billion for its full year 2022. Datadog now has about 2,420 customers spending more than $100,000 on annual recurring revenue.

Datadog’s Seekret Acquisition

Datadog is acquiring Seekret for its ability to solve the challenge development teams face around discovering, managing and monitoring APIs in a fast and easy manner.

Seekret’s API platform aims to make it easier for organizations to automatically discover and manage APIs across their environments with minimal effort.

The addition of Seekret’s capabilities will extend Datadog’s unified platform to deliver deeper API observability, governance and automation across the entire API lifecycle, the company said.

Datadog will inject these capabilities into its security and observability offerings and build many more features for developers, operations and security engineers to better manage the health, availability and security of their APIs, according to the company.

Financial terms of the acquisition were not disclosed.

APIs Are Key

“APIs have become the cornerstone of digital services and organizations rely heavily on them to make their critical business functions run,” said Seekret CEO Idan Gindi in a statement.

“As this shift has occurred, however, the ability to have visibility into APIs and to manage complex API operations has remained a struggle for engineering and product teams,” Gindi said. “Joining Datadog allows us to continue our mission to provide customers the ability to observe and govern all API operations at any given moment and any scale.”

Datadog provides a key monitoring and security platform for cloud applications. The company’s SaaS platform integrates and automates infrastructure monitoring, application performance monitoring and log management to provide real-time observability of customers’ entire technology stack.