Datadog (NASDAQ:DDOG) Announces Quarterly Earnings Results, Beats Expectations By $0.07 EPS

Datadog (NASDAQ:DDOG) posted its quarterly earnings results on Thursday. The company reported $0.65 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.58 by $0.07, FiscalAI reports. Datadog had a return on equity of 5.67% and a net margin of 4.48%.The business had revenue of $1.12 billion for the quarter, compared to analyst estimates of $1.08 billion. During the same period last year, the company earned $0.46 EPS. Datadog’s revenue for the quarter was up 35.6% compared to the same quarter last year. 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 Trading Up 2.0%

Datadog stock traded up $4.64 during mid-day trading on Friday, reaching $233.93. 8,531,977 shares of the company traded hands, compared to its average volume of 4,713,936. The company has a debt-to-equity ratio of 0.23, a current ratio of 3.20 and a quick ratio of 3.40. The firm’s 50 day moving average price is $249.29 and its 200 day moving average price is $177.85. The firm has a market capitalization of $83.27 billion, a price-to-earnings ratio of 477.42, a P/E/G ratio of 23.23 and a beta of 1.54. Datadog has a 52-week low of $98.01 and a 52-week high of $292.72.

Insider Activity at Datadog

In other news, Director Amit Agarwal sold 20,000 shares of the firm’s stock in a transaction dated Thursday, July 30th. The shares were sold at an average price of $266.82, for a total value of $5,336,400.00. Following the completion of the sale, the director directly owned 1,640 shares of the company’s stock, valued at approximately $437,584.80. This trade represents a 92.42% decrease in their position. The transaction was disclosed in a document filed with the SEC, which is accessible through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CTO Alexis Le-Quoc sold 43,224 shares of Datadog stock in a transaction dated Monday, July 20th. The shares were sold at an average price of $265.23, for a total transaction of $11,464,301.52. Following the sale, the chief technology officer directly owned 509,805 shares in the company, valued at $135,215,580.15. The trade was a 7.82% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last 90 days, insiders sold 1,502,163 shares of company stock valued at $363,481,842. 6.48% of the stock is currently owned by company insiders.

Institutional Trading of Datadog

Several large investors have recently bought and sold shares of DDOG. JPL Wealth Management LLC bought a new position in shares of Datadog in the 3rd quarter worth approximately $27,000. Quarry LP bought a new stake in shares of Datadog during the third quarter valued at approximately $45,000. DV Equities LLC bought a new stake in shares of Datadog during the fourth quarter valued at approximately $62,000. Geneos Wealth Management Inc. grew its stake in Datadog by 17.6% in the first quarter. Geneos Wealth Management Inc. now owns 769 shares of the company’s stock worth $76,000 after purchasing an additional 115 shares during the period. Finally, GW&K Investment Management LLC grew its stake in Datadog by 964.3% in the fourth quarter. GW&K Investment Management LLC now owns 596 shares of the company’s stock worth $81,000 after purchasing an additional 540 shares during the period. 78.29% of the stock is owned by institutional investors.

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

Analysts Set New Price Targets

A number of research firms have recently weighed in on DDOG. Oppenheimer increased their price objective on Datadog from $220.00 to $300.00 and gave the company an “outperform” rating in a research note on Monday, July 20th. BMO Capital Markets set a $300.00 target price on shares of Datadog in a research note on Friday. Rosenblatt Securities upped their price target on shares of Datadog from $220.00 to $305.00 and gave the company a “buy” rating in a report on Tuesday. CICC Research increased their price target on shares of Datadog from $150.00 to $204.00 in a research report on Monday, May 11th. Finally, Wedbush started coverage on shares of Datadog in a research report on Monday, June 15th. They set a “neutral” rating for the company. Two equities research analysts have rated the stock with a Strong Buy rating, thirty-eight have assigned a Buy rating, three have issued a Hold rating and two have assigned a Sell rating to the company. According to data from MarketBeat.com, the stock presently has a consensus rating of “Moderate Buy” and an average price target of $276.32.

About Datadog

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.