Datadog (NASDAQ:DDOG) Issues Quarterly Earnings Results, Beats Estimates By $0.07 EPS

Datadog (NASDAQ:DDOG) released its quarterly earnings results on Thursday. The company reported $0.65 EPS for the quarter, beating analysts’ consensus estimates of $0.58 by $0.07, FiscalAI reports. The company had revenue of $1.12 billion during the quarter, compared to analysts’ expectations of $1.08 billion. Datadog had a return on equity of 5.67% and a net margin of 4.48%.The firm’s revenue was up 35.6% compared to the same quarter last year. During the same period last year, the business posted $0.46 earnings per share. Datadog updated its Q3 2026 guidance to 0.630-0.650 EPS and its FY 2026 guidance to 2.500-2.540 EPS.

Here are the key takeaways from Datadog’s conference call:

• Q2 revenue reached $1.12 billion, up 36% year over year and above the high end of guidance, while record quarterly revenue additions and 25% free-cash-flow margins underscored strong execution.
• Core demand accelerated broadly, with non-AI customers growing in the high 20s percentage range and new-logo bookings particularly strong in enterprise. Net revenue retention remained in the low 120s, while gross retention stayed in the mid-to-high 90s.
• Platform adoption continued to expand, with 58% of customers using at least four products and 37% using six or more; Real User Monitoring surpassed $200 million in ARR and grew more than 50% year over year.
• AI-related demand is expanding across startups, hyperscalers and traditional enterprises, supporting Datadog’s AI observability, security and automation offerings. The company cited more than 750 AI customers, rapid growth in agent activity and several large AI-related wins.
• Management incorporated a usage reduction from its largest customer into guidance, contributing to a Q3 revenue outlook of $1.135 billion-$1.145 billion, or 28%-29% growth, and full-year revenue guidance of $4.45 billion-$4.47 billion, or 30% growth.

Datadog Stock Performance

Shares of Datadog stock traded up $4.64 on Friday, reaching $233.93. 8,531,977 shares of the stock were exchanged, compared to its average volume of 4,713,936. The company has a quick ratio of 3.40, a current ratio of 3.20 and a debt-to-equity ratio of 0.23. Datadog has a twelve month low of $98.01 and a twelve month high of $292.72. The firm has a market capitalization of $83.27 billion, a price-to-earnings ratio of 477.42, a PEG ratio of 23.23 and a beta of 1.54. The business has a 50 day moving average price of $249.29 and a two-hundred day moving average price of $177.85.

Wall Street Analyst Weigh In

Several equities analysts have recently issued reports on DDOG shares. Needham & Company LLC upped their price objective on shares of Datadog from $260.00 to $300.00 and gave the company a “buy” rating in a report on Friday. Wolfe Research reiterated an “outperform” rating and issued a $295.00 target price on shares of Datadog in a research note on Thursday, June 11th. Zacks Research raised shares of Datadog from a “hold” rating to a “strong-buy” rating in a research report on Tuesday, July 7th. CICC Research upped their price target on shares of Datadog from $150.00 to $204.00 in a research note on Monday, May 11th. Finally, Craig Hallum began coverage on shares of Datadog in a report on Monday, June 15th. They issued a “buy” rating for the company. Two research analysts have rated the stock with a Strong Buy rating, thirty-eight have given a Buy rating, three have given a Hold rating and two have assigned a Sell rating to the stock. Based on data from MarketBeat, the stock presently has a consensus rating of “Moderate Buy” and an average price target of $276.32.

Key Headlines Impacting Datadog

Here are the key news stories impacting Datadog this week:

• Positive Sentiment: Datadog delivered a strong second quarter: revenue rose 35.6% year over year to $1.12 billion, exceeding the $1.08 billion consensus estimate, while EPS of $0.65 topped expectations of $0.58 and increased from $0.46 a year earlier. Growth was broad-based across AI and non-AI demand, with billings and remaining performance obligations also supporting future revenue visibility. Datadog Q2 Earnings and Revenues Surpass Estimates
• Positive Sentiment: Management raised its fiscal 2026 outlook to approximately $4.45-$4.47 billion in revenue and $2.50-$2.54 in EPS. Third-quarter EPS guidance of $0.63-$0.65 is above the $0.52 analyst consensus, providing a positive catalyst despite revenue guidance being roughly in line with expectations. Datadog Beats Earnings and Raises Outlook
• Positive Sentiment: Citigroup raised its DDOG price target to $305 and reaffirmed a “Buy” rating. DA Davidson also maintained its “Buy” rating with a $315 target, suggesting analysts see significant upside following the pullback. Datadog Analyst Price Targets
• Neutral Sentiment: CEO Olivier Pomel sold 127,141 shares worth approximately $36.5 million under a pre-arranged Rule 10b5-1 plan. The sale reduced his holdings by about 17%, but the planned nature of the transaction limits its value as a signal about Datadog’s business outlook. Datadog CEO Stock Sale Filing
• Negative Sentiment: The earlier decline reflected a high valuation and exceptionally high investor expectations rather than a quarterly miss. Investors focused on slowing bookings growth and management’s disclosure that its largest customer, reportedly a major AI company, plans to reduce usage, creating a risk to consumption-based revenue. Datadog Major Customer Usage News

Insider Buying and Selling

In related news, CEO Olivier Pomel sold 127,141 shares of the stock in a transaction that occurred on Monday, May 11th. The shares were sold at an average price of $199.84, for a total value of $25,407,857.44. Following the transaction, the chief executive officer owned 835,679 shares in the company, valued at approximately $167,002,091.36. This represents a 13.21% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Michael James Callahan sold 112,500 shares of Datadog stock in a transaction that occurred on Friday, June 12th. The shares were sold at an average price of $231.60, for a total transaction of $26,055,000.00. Following the sale, the director owned 14,996 shares of the company’s stock, valued at approximately $3,473,073.60. The trade was a 88.24% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold 1,502,163 shares of company stock worth $363,481,842 in the last quarter. 6.48% of the stock is currently owned by corporate insiders.

Institutional Inflows and Outflows

A number of institutional investors and hedge funds have recently added to or reduced their stakes in DDOG. Compound Planning Inc. boosted its stake in shares of Datadog by 17.3% in the fourth quarter. Compound Planning Inc. now owns 8,716 shares of the company’s stock worth $1,185,000 after buying an additional 1,284 shares during the last quarter. Corient Private Wealth LLC raised its position in Datadog by 127.3% during the fourth quarter. Corient Private Wealth LLC now owns 36,511 shares of the company’s stock valued at $4,965,000 after acquiring an additional 20,447 shares in the last quarter. Mercer Global Advisors Inc. ADV lifted its holdings in Datadog by 10.3% in the fourth quarter. Mercer Global Advisors Inc. ADV now owns 21,643 shares of the company’s stock valued at $2,943,000 after acquiring an additional 2,028 shares during the period. Vident Advisory LLC lifted its holdings in Datadog by 5.6% in the fourth quarter. Vident Advisory LLC now owns 235,640 shares of the company’s stock valued at $32,045,000 after acquiring an additional 12,577 shares during the period. Finally, Delta Global Management LP purchased a new stake in Datadog in the 4th quarter worth approximately $2,686,000. 78.29% of the stock is currently owned by institutional investors and hedge funds.

Datadog Company Profile

Datadog (NASDAQ: DDOG) is a cloud-based monitoring and observability platform that helps organizations monitor, troubleshoot and secure their applications and infrastructure at scale. Its software-as-a-service offering collects and analyzes metrics, traces and logs from servers, containers, cloud services and applications to provide real-time visibility into system performance and health. Datadog’s platform is widely used by engineering, operations and security teams to reduce downtime, accelerate incident response and improve application reliability.

The company’s product suite includes infrastructure monitoring, application performance monitoring (APM), log management, real user monitoring (RUM), synthetic monitoring and network performance monitoring, along with security-focused products such as security monitoring and cloud SIEM.