Datadog (NASDAQ:DDOG) Issues Quarterly Earnings Results

Datadog (NASDAQ:DDOG) issued its quarterly earnings data on Tuesday. The company reported $0.59 earnings per share for the quarter, topping analysts’ consensus estimates of $0.55 by $0.04, FiscalAI reports. Datadog had a net margin of 3.14% and a return on equity of 4.14%. The business had revenue of $953.19 million during the quarter, compared to analysts’ expectations of $916.53 million. During the same period last year, the company posted $0.49 EPS. The company’s revenue was up 29.2% on a year-over-year basis. Datadog updated its FY 2026 guidance to 2.080-2.160 EPS and its Q1 2026 guidance to 0.490-0.510 EPS.

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

• Q4 beat and cash generation — Revenue was $953 million (+29% Y/Y), bookings hit a record $1.63 billion (+37% Y/Y), and free cash flow was $291 million (31% margin), supporting strong profitability and balance-sheet flexibility.
• AI and product traction — Early adoption of Bits AI agents, explosive MCP server usage (tool calls up 11x Q4 vs Q3), and multiple large AI-related deals signal accelerating demand for Datadog’s AI-enabled observability offerings.
• Customer retention and expansion — Trailing‑12‑month net revenue retention ~120%, customers ~32,700, rising multi‑product penetration (more customers using 4–10+ products), and 48% of the Fortune 500 as customers indicate a substantial upsell runway.
• Guidance shows deceleration — FY2026 revenue guide of $4.06–$4.10 billion (18–20% growth) and Q1 guide of 25–26% imply a notable slowdown from Q4’s growth rate, reflecting the company’s conservative modeling and concentration considerations.

Datadog Stock Performance

Shares of DDOG stock opened at $127.33 on Thursday. The company has a market cap of $44.65 billion, a P/E ratio of 410.74, a PEG ratio of 23.16 and a beta of 1.27. The business has a 50 day moving average of $133.30 and a two-hundred day moving average of $143.94. Datadog has a 52 week low of $81.63 and a 52 week high of $201.69. The company has a quick ratio of 3.66, a current ratio of 3.38 and a debt-to-equity ratio of 0.26.

Insider Buying and Selling

In other Datadog news, CEO Olivier Pomel sold 11,195 shares of the firm’s stock in a transaction on Wednesday, December 17th. The stock was sold at an average price of $137.93, for a total value of $1,544,126.35. Following the sale, the chief executive officer directly owned 518,133 shares in the company, valued at approximately $71,466,084.69. This trade represents a 2.11% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which can be accessed through this link. Also, Director Shardul Shah sold 7,916 shares of the business’s stock in a transaction on Tuesday, January 13th. The shares were sold at an average price of $124.89, for a total transaction of $988,629.24. Following the transaction, the director directly owned 340,701 shares of the company’s stock, valued at approximately $42,550,147.89. This trade represents a 2.27% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Insiders have sold a total of 538,917 shares of company stock valued at $86,804,288 over the last quarter. Company insiders own 8.70% of the company’s stock.

Institutional Trading of Datadog

Several hedge funds have recently bought and sold shares of the company. State Street Corp boosted its stake in Datadog by 106.8% during the 3rd quarter. State Street Corp now owns 13,732,777 shares of the company’s stock valued at $1,955,547,000 after purchasing an additional 7,091,075 shares during the period. Invesco Ltd. boosted its position in shares of Datadog by 119.2% during the third quarter. Invesco Ltd. now owns 4,075,721 shares of the company’s stock worth $580,383,000 after buying an additional 2,216,402 shares during the period. AQR Capital Management LLC boosted its position in shares of Datadog by 99.8% during the second quarter. AQR Capital Management LLC now owns 1,847,722 shares of the company’s stock worth $247,983,000 after buying an additional 923,038 shares during the period. Northern Trust Corp increased its position in Datadog by 45.0% in the 3rd quarter. Northern Trust Corp now owns 2,707,291 shares of the company’s stock valued at $385,518,000 after acquiring an additional 840,633 shares during the period. Finally, Ameriprise Financial Inc. raised its stake in Datadog by 57.7% during the 2nd quarter. Ameriprise Financial Inc. now owns 1,769,943 shares of the company’s stock valued at $237,758,000 after acquiring an additional 647,623 shares in the last quarter. 78.29% of the stock is currently owned by institutional investors.

Analyst Ratings Changes

A number of equities analysts have recently weighed in on DDOG shares. Royal Bank Of Canada cut their price objective on shares of Datadog from $175.00 to $150.00 and set an “outperform” rating for the company in a research report on Monday. Wedbush decreased their target price on Datadog from $215.00 to $190.00 and set an “outperform” rating for the company in a report on Wednesday. Bank of America increased their price target on Datadog from $180.00 to $215.00 and gave the company a “buy” rating in a report on Friday, November 7th. Capital One Financial lifted their price objective on shares of Datadog from $156.00 to $157.00 and gave the company an “overweight” rating in a research note on Wednesday. Finally, Oppenheimer boosted their target price on shares of Datadog from $165.00 to $195.00 and gave the stock an “outperform” rating in a research report on Friday, October 17th. Thirty-seven equities research analysts have rated the stock with a Buy rating, five have issued a Hold rating and two have assigned a Sell rating to the company. According to MarketBeat.com, the stock currently has an average rating of “Moderate Buy” and an average price target of $179.50.

Trending Headlines about Datadog

Here are the key news stories impacting Datadog this week:

• Positive Sentiment: Q4 beat and upbeat guidance: Datadog reported Q4 revenue up ~29% to $953M and $0.59 EPS, topping estimates; management issued Q1 and FY2026 guidance well above Street expectations, which spurred the post-earnings rally. Datadog beats quarterly estimates
• Positive Sentiment: AI positioning: Analysts and commentators argue AI fears are overstated for Datadog; the company is integrating AI monitoring and security features that should make it a beneficiary of AI adoption rather than a victim. Datadog: AI Isn’t The Main Problem
• Positive Sentiment: Strong market reaction and cash flow: Multiple outlets note the stock jumped double digits after the print as revenue, ARR and cash-flow metrics showed acceleration—supporting bullish momentum in the near term. Datadog Stock Surges After Earnings
• Neutral Sentiment: Mixed analyst moves: Some firms reaffirm buys and high targets (DA Davidson, Rosenblatt), while others trimmed targets; reactions are supportive but show a wide range of conviction that could create volatility. Analyst notes (Benzinga)
• Neutral Sentiment: Sector flow and short-squeeze chatter: Broader software/AI rotation and talk of short-covering have amplified price moves—this can produce sharp intraday swings unrelated to fundamentals. Software Stocks Look Primed for a Short Squeeze
• Negative Sentiment: Valuation remains a concern: Commentators and some analysts still view Datadog as expensive (very high P/E and premium multiples), which limits upside despite strong results and makes the stock sensitive to any slowdown or guidance miss. Is Datadog Stock Still A Buy?
• Negative Sentiment: Short-term profit-taking and AI-sector weakness: After the earnings pop, some investors are trimming positions into strength; ongoing AI-driven rotation in software names is pressuring the stock despite Datadog-specific positives. Datadog jumps after Q4 beat

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.