Datadog (NASDAQ:DDOG) Issues Earnings Results, Beats Estimates By $0.17 EPS

Datadog (NASDAQ:DDOG) posted its earnings results on Wednesday. The company reported $0.81 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $0.64 by $0.17, FiscalAI reports. Datadog had a net margin of 4.48% and a return on equity of 5.67%. The company had revenue of $1.20 billion during the quarter, compared to the consensus estimate of $1.15 billion. During the same period in the previous year, the firm posted $0.55 earnings per share. The firm’s quarterly revenue was up 35.2% on a year-over-year basis.

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

• Q3 revenue was $1.197 billion, up 35% year over year and above guidance. Growth among customers excluding AI-native customers accelerated for a fifth consecutive quarter to the high 20% range.
• AI-related demand and broader platform adoption continued to expand: Datadog served more than 850 AI customers, and its Infrastructure Monitoring suite surpassed $2 billion in ARR, growing at a mid-30s rate. Adoption of four or more products rose to 61% of customers, while AI-native customer growth continued to outpace the rest of the business.
• Q4 revenue guidance of $1.19 billion–$1.20 billion implies 25%–26% year-over-year growth, slowing from Q3’s 35%. The company is assuming its largest customer spends only at its minimum commitment; early renewals and pricing adjustments at some large customers are also creating near-term revenue headwinds.
• Profitability and contracted demand were strong in Q3: non-GAAP operating margin reached 28%, free cash flow was $251 million, and RPO grew 38% year over year to $3.85 billion. For 2026, Datadog expects revenue of $4.515 billion–$4.525 billion, about 32% growth, with a 24% non-GAAP operating margin.

Datadog Price Performance

DDOG stock traded down $12.64 during trading on Thursday, hitting $176.07. The stock had a trading volume of 3,129,604 shares, compared to its average volume of 5,093,178. The company’s 50 day moving average price is $250.09 and its two-hundred day moving average price is $199.43. Datadog has a 1-year low of $98.01 and a 1-year high of $300.68. The stock has a market cap of $63.23 billion, a price-to-earnings ratio of 355.46, a price-to-earnings-growth ratio of 21.50 and a beta of 1.50. The company has a debt-to-equity ratio of 0.23, a quick ratio of 3.20 and a current ratio of 3.20.

Wall Street Analyst Weigh In

Several equities research analysts recently issued reports on the stock. Raymond James Financial restated an “outperform” rating and set a $280.00 price objective on shares of Datadog in a research report on Thursday, August 6th. FBN Securities started coverage on Datadog in a research note on Friday, October 2nd. They issued an “outperform” rating and a $325.00 price objective for the company. Wedbush lowered their target price on shares of Datadog from $275.00 to $240.00 and set an “outperform” rating for the company in a research note on Thursday. Needham & Company LLC reiterated a “buy” rating and issued a $300.00 price target on shares of Datadog in a research note on Wednesday. Finally, BTIG Research dropped their price objective on Datadog from $289.00 to $260.00 and set a “buy” rating on the stock in a report on Wednesday. Two investment analysts have rated the stock with a Strong Buy rating, forty-one have given a Buy rating, three have given a Hold rating and one has assigned a Sell rating to the stock. According to MarketBeat.com, Datadog currently has a consensus rating of “Moderate Buy” and a consensus target price of $281.76.

Insider Activity

In other news, CTO Alexis Le-Quoc sold 53,912 shares of the firm’s stock in a transaction on Monday, August 10th. The stock was sold at an average price of $253.36, for a total transaction of $13,659,144.32. Following the sale, the chief technology officer owned 509,805 shares in the company, valued at $129,164,194.80. This trade represents a 9.56% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Matthew Jacobson sold 39,912 shares of the company’s stock in a transaction that occurred on Thursday, August 13th. The stock was sold at an average price of $250.55, for a total transaction of $9,999,951.60. Following the transaction, the director directly owned 544,220 shares of the company’s stock, valued at $136,354,321. This trade represents a 6.83% decrease in their position. The disclosure for this sale is available in the SEC filing. Over the last ninety days, insiders sold 745,293 shares of company stock worth $175,536,548. 6.48% of the stock is currently owned by corporate insiders.

Trending Headlines about Datadog

Here are the key news stories impacting Datadog this week:

• Positive Sentiment: Q3 revenue rose 35.2% year over year to $1.20 billion, ahead of estimates, while adjusted EPS of $0.81 topped the $0.64 consensus. Datadog also raised its full-year outlook and reported continued product adoption, including growth in its larger-customer base. Datadog Q3 results
• Positive Sentiment: Longer-term demand indicators were encouraging: revenue from customers outside AI grew in the high-20% range, and infrastructure-monitoring ARR exceeded $2 billion. Long-term investor takeaways
• Neutral Sentiment: Cantor Fitzgerald and BTIG lowered their price targets to $260 while retaining Overweight and Buy ratings, respectively; Needham reaffirmed Buy with a $300 target. The target cuts signal more cautious expectations despite continued bullish ratings. Cantor Fitzgerald rating
• Negative Sentiment: Q4 revenue guidance points to a slowdown from Q3’s 35% growth—roughly 26% year-over-year growth in one analysis, with revenue expected near Q3’s level. Investors may see the outlook as a deceleration even though Q3 beat estimates. Datadog rating downgrade analysis
• Negative Sentiment: Management said reduced usage by a major AI customer weighed on growth. That customer concentration and spending volatility add uncertainty to the outlook, while Datadog’s premium valuation leaves the stock vulnerable if growth expectations ease. Major customer usage report

Datadog Company Profile

Datadog, Inc is a technology company that provides a cloud-based monitoring and security platform for applications, infrastructure and other technology environments. Its platform helps organizations collect, analyze and visualize data from servers, databases, containers, cloud services, applications and user interactions in a unified environment.

Datadog’s products include infrastructure monitoring, application performance monitoring, log management, real user monitoring, synthetic monitoring, network performance monitoring, cloud security, software delivery tools and incident-management capabilities.