On the heels of yesterday’s post, DataDog announced earnings . The company exceeded its plan for the quarter & raised the plan for next quarter.

DataDog leads the cloud monitoring & security space. They will generate about $2b in revenue this year. That they see strength in their customer behavior is a good sign for Startupland broadly.

Here are some takeaways from their call yesterday :

The cost-cutting activities that dominated the start of this year are plateauing, which should drive better predictability in bookings.

“We are seeing signs that the cloud optimization activity from some of our customers may be moderating. "

AI is early but important. Now at 2.5% of ARR, it’s at least a $50m ARR segment for DataDog.

“We continue to see AI-related usage manifest itself most accurately with next-gen AI native customers who contributed about 2.5% of our ARR this quarter…they tend to be mobile [apps]”

But because the technology is new, predictability is a challenge.

“For one part, there’s some uncertainty in terms of – these customers are being to figure out what it is they are going to ship to their own customers. I think everybody is trying to learn that right now and experiment”

At this scale, Pareto’s principle applies. Large customers generate nearly 90% of revenue.

“We ended the quarter with about 3,130 customers with an ARR of $100,000 or more, up from about 2,600 last year. And these customers generated about 86% of our ARR.”

The suite strategy, cross-selling a portfolio of products, is one key part of large customer expansion. ACV today is about $82k - compare that to the $37k at IPO & it’s clear how much moving upmarket has been a key to success for the company.

“As of the end of Q3, 82% of customers were using 2 or more products, up from 80% a year ago. 46% of customers were using 4 or more products, up from 40% a year ago and 21% of our customers were using 6 or more products, up from 16% last year.”

This is another sign that for companies who see stability in their pipelines & customer behavior, it may be time to seize the moment.