Datadog's $65M/year customer mystery solved

Summary

The internet has been speculating the past few days on which crypto company spent $65M on Datadog in 2022. I confirmed it was Coinbase, and here are the details of what happened. Originally published on 11 May 2023.👋 Hi, this is Gergely with a bonus, free issue of the Pragmatic Engineer Newsletter. We cover one out of six topics in today’s subscriber-only The Scoop issue. To get full newsletters twice a week, subscribe here.Datadog is a leading observability tooling provider which went public in 2019, with a current market cap of $28B. The company made $1.67B revenue in 2022, circa $140M per month. On an earnings call a week ago, on 4 May, the CFO mentioned a “large upfront bill that did not recur,” saying:“Billings were $511 million, up 15% year-over-year. We had a large upfront bill for a client in Q1 2022 that did not recur at the same level or timing in Q1 2023. Pro forma for this client, billings growth was in the low 30s percent year-over-year.”If you’re like me, you’d probably skim over this detail, as it’s 15% here, 30% there. However, analysts attend these calls whose bread and butter is crunching the numbers and figuring out what a company might be trying to hide. A JP Morgan stock analyst did just this, quickly crunching numbers and asking the question:“David, looking at the math on this large upfront bill that did not recur, it seems to be about $65 million, if I'm running that correctly. Can you possibly shed a little more light?“Datadog’s CFO, David Obstler gave more details:“That was a crypto company which continues to be a customer of ours. But that was an early optimizer. We had always talked about some of the industries that were most affected and optimized.“So, who is this mysterious crypto company? Investor Turner Novak speculated that it’s Coinbase:He added he doesn’t know for certain that it is Coinbase, as other crypto companies have also raised silly amounts of money in the past several years.So, did Coinbase spend $65M on Datadog in 2022? On...