Datadog (NASDAQ:DDOG) Posts Quarterly Earnings Results, Beats Expectations By $0.17 EPS

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

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 Stock Down 14.3%

Shares of DDOG stock traded down $31.53 during mid-day trading on Wednesday, hitting $188.99. The stock had a trading volume of 10,561,797 shares, compared to its average volume of 5,090,371. Datadog has a 12-month low of $98.01 and a 12-month high of $300.68. The firm has a market capitalization of $67.86 billion, a P/E ratio of 385.71, a price-to-earnings-growth ratio of 21.09 and a beta of 1.50. The firm’s 50-day moving average is $250.77 and its two-hundred day moving average is $199.09. The company has a debt-to-equity ratio of 0.23, a current ratio of 3.20 and a quick ratio of 3.20.

Trending Headlines about Datadog

Here are the key news stories impacting Datadog this week:

• Positive Sentiment: Datadog reported Q3 revenue of $1.20 billion, up 35.2% year over year and above expectations of $1.15 billion. Adjusted earnings of $0.81 per share also beat the $0.64 consensus. The company highlighted growth in customers spending at least $100,000 annually and introduced its Scout 1.0 specialized model. Datadog Announces Third Quarter 2026 Financial Results
• Neutral Sentiment: Analyst views were supportive but mixed: Needham reaffirmed a Buy rating with a $300 target, while BTIG kept its Buy rating but cut its target from $289 to $260. Needham analyst ratings
• Negative Sentiment: Management expects Q4 revenue to be about $1.20 billion—roughly flat with Q3—and said lower usage by a major AI customer is weighing on growth. Investors appear to be prioritizing this near-term slowdown over the quarterly beat, despite reports that Datadog raised its guidance. Datadog Says Lower Usage From Major AI Customer Is Weighing on Growth

Analyst Ratings Changes

DDOG has been the topic of a number of analyst reports. Canadian Imperial Bank of Commerce upped their target price on Datadog from $280.00 to $315.00 and gave the company an “outperform” rating in a research note on Friday, October 9th. Canaccord Genuity Group raised their price target on Datadog from $250.00 to $295.00 and gave the stock a “buy” rating in a research note on Tuesday, August 4th. Jefferies Financial Group restated a “hold” rating and set a $300.00 price objective on shares of Datadog in a report on Sunday, October 11th. Citizens Jmp upped their price objective on Datadog from $225.00 to $311.00 and gave the company a “market outperform” rating in a research report on Monday, July 20th. Finally, Guggenheim upped their price objective on Datadog from $225.00 to $300.00 and gave the company a “buy” rating in a research report on Wednesday, July 22nd. Three research analysts have rated the stock with a Strong Buy rating, forty have assigned a Buy rating, three have issued a Hold rating and one has issued a Sell rating to the stock. Based on data from MarketBeat, Datadog currently has an average rating of “Moderate Buy” and a consensus price target of $287.35.

Insider Transactions at Datadog

In related news, CTO Alexis Le-Quoc sold 53,912 shares of Datadog stock in a transaction dated Monday, August 10th. The stock was sold at an average price of $253.36, for a total value of $13,659,144.32. Following the completion of the sale, the chief technology officer directly owned 509,805 shares in the company, valued at $129,164,194.80. The trade was a 9.56% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is available through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Olivier Pomel sold 89,497 shares of Datadog stock in a transaction dated Tuesday, September 8th. The shares were sold at an average price of $207.86, for a total value of $18,602,846.42. Following the completion of the sale, the chief executive officer owned 586,416 shares of the company’s stock, valued at $121,892,429.76. The trade was a 13.24% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last ninety days, insiders have sold 765,293 shares of company stock worth $180,233,548. Corporate insiders own 6.48% of the company’s stock.

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.