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

Datadog (NASDAQ:DDOG) announced its quarterly earnings results on Wednesday. The company reported $0.81 EPS for the quarter, topping 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 firm had revenue of $1.20 billion during the quarter, compared to analyst estimates of $1.15 billion. During the same period in the previous year, the business posted $0.55 earnings per share. The business’s revenue for the quarter 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 Stock Performance

DDOG traded down $31.33 during trading on Wednesday, hitting $189.19. The company’s stock had a trading volume of 10,210,850 shares, compared to its average volume of 5,087,805. The company has a quick ratio of 3.20, a current ratio of 3.20 and a debt-to-equity ratio of 0.23. Datadog has a one year low of $98.01 and a one year high of $300.68. The firm has a market cap of $67.94 billion, a PE ratio of 386.63, a P/E/G ratio of 21.09 and a beta of 1.50. The business’s 50 day simple moving average is $250.77 and its 200-day simple moving average is $199.09.

Insider Activity

In other news, CTO Alexis Le-Quoc sold 43,224 shares of Datadog stock in a transaction dated Wednesday, October 28th. The stock was sold at an average price of $278.90, for a total transaction of $12,055,173.60. Following the transaction, the chief technology officer directly owned 488,033 shares of the company’s stock, valued at $136,112,403.70. The trade was a 8.14% decrease in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available at this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Yanbing Li sold 12,700 shares of the business’s stock in a transaction that occurred on Friday, September 11th. The shares were sold at an average price of $221.26, for a total value of $2,810,002.00. Following the transaction, the insider owned 250,446 shares of the company’s stock, valued at approximately $55,413,681.96. This trade represents a 4.83% 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. Over the last 90 days, insiders have sold 765,293 shares of company stock worth $180,233,548. Company insiders own 6.48% of the company’s stock.

Wall Street Analyst Weigh In

DDOG has been the topic of several research reports. Evercore restated an “outperform” rating and issued a $300.00 target price on shares of Datadog in a report on Monday. Jefferies Financial Group reissued a “hold” rating and set a $300.00 price target on shares of Datadog in a report on Sunday, October 11th. Canaccord Genuity Group increased their price target on Datadog from $250.00 to $295.00 and gave the company a “buy” rating in a report on Tuesday, August 4th. Morgan Stanley raised their price target on Datadog from $225.00 to $300.00 and gave the stock an “overweight” rating in a research note on Tuesday, July 28th. Finally, Wells Fargo & Company lifted their price objective on Datadog from $295.00 to $325.00 and gave the stock an “overweight” rating in a report on Wednesday, October 28th. Three investment analysts have rated the stock with a Strong Buy rating, forty have issued a Buy rating, three have issued a Hold rating and one has issued a Sell rating to the company’s stock. According to MarketBeat, the stock currently has a consensus rating of “Moderate Buy” and a consensus price target of $287.35.

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

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.