Datadog (NASDAQ:DDOG) Releases 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 6.12% and a return on equity of 7.28%. The company had revenue of $1.20 billion during the quarter, compared to analysts’ expectations of $1.15 billion. During the same quarter in the previous year, the company posted $0.55 earnings per share. Datadog’s quarterly revenue was up 35.2% compared to the same quarter last year.

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

Shares of DDOG traded up $7.71 during mid-day trading on Friday, hitting $182.31. 3,756,090 shares of the company’s stock were exchanged, compared to its average volume of 5,121,020. The company has a quick ratio of 3.20, a current ratio of 3.51 and a debt-to-equity ratio of 0.21. Datadog has a 52 week low of $98.01 and a 52 week high of $300.68. The stock’s 50-day simple moving average is $249.02 and its 200-day simple moving average is $199.70. The firm has a market cap of $65.46 billion, a price-to-earnings ratio of 256.27, a price-to-earnings-growth ratio of 18.40 and a beta of 1.50.

Analyst Ratings Changes

DDOG has been the subject of several recent analyst reports. Yorkville Ives assumed coverage on Datadog in a report on Monday, October 5th. They issued an “outperform” rating and a $335.00 price target for the company. Evercore reaffirmed an “outperform” rating and issued a $300.00 target price on shares of Datadog in a research note on Monday. Wedbush lowered their target price on Datadog from $275.00 to $240.00 and set an “outperform” rating for the company in a report on Thursday. Oppenheimer lifted their price target on Datadog from $300.00 to $330.00 and gave the company an “outperform” rating in a research note on Monday, October 26th. Finally, Wells Fargo & Company cut their price target on Datadog from $325.00 to $300.00 and set an “overweight” rating on the stock in a report on Thursday. Two research analysts have rated the stock with a Strong Buy rating, forty-one have assigned a Buy rating, three have issued a Hold rating and one has given a Sell rating to the company’s stock. According to data from MarketBeat, the company currently has a consensus rating of “Moderate Buy” and a consensus target price of $275.46.

Insider Activity

In other news, insider Yanbing Li sold 12,700 shares of Datadog stock in a transaction on Friday, September 11th. The stock was 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 in the company, valued at approximately $55,413,681.96. This trade represents a 4.83% decrease in their position. The sale was disclosed in a document filed with the SEC, which is accessible through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CRO Sean Walters sold 11,710 shares of the business’s stock in a transaction dated Friday, September 11th. The stock was sold at an average price of $221.04, for a total value of $2,588,378.40. Following the transaction, the executive directly owned 233,135 shares of the company’s stock, valued at approximately $51,532,160.40. The trade was a 4.78% decrease in their position. 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 quarter, insiders sold 745,293 shares of company stock worth $175,536,548. 6.48% of the stock is owned by insiders.

Trending Headlines about Datadog

Here are the key news stories impacting Datadog this week:

• Positive Sentiment: Q3 revenue of $1.20 billion and adjusted EPS of $0.81 exceeded estimates; revenue grew 35.2% year over year. Infrastructure Monitoring ARR also topped $2 billion, with broad-based customer and product adoption and rising AI usage. Datadog’s Infrastructure Monitoring Tops $2B ARR in Q3, Revenues Beat
• Positive Sentiment: Analysts continue to see potential: several firms lowered price targets after the results but kept Buy or Overweight ratings, including Wedbush, which set a $240 target. Datadog Given New $240 Price Target at Wedbush
• Neutral Sentiment: One valuation analysis argues DDOG could still be undervalued based on expected cash generation, while noting that AI-driven investor sentiment has contributed to sharp share-price swings. Datadog Stock Could Still Be Undervalued As AI Hopes Swing
• Negative Sentiment: Despite the beat, Q4 guidance points to slower revenue growth—around 26% in one analysis. Investors are also watching the contribution from Datadog’s largest customer and lower-priced AI customer deals and renewals, making the outlook less certain. Q3 Earnings Call Highlights AI Growth and Customer Renewals
• Negative Sentiment: Multiple firms cut price targets, reflecting tempered expectations after the results. High valuation has added to concerns that the stock’s growth prospects leave little room for disappointment. Datadog: AI Story Priced For Perfection

About Datadog

Datadog, Inc provides a cloud-based monitoring and security platform that helps organizations observe and manage their technology environments. Its tools collect and analyze data from applications, infrastructure, networks, and other systems to help teams detect issues and improve performance.

The company’s products include infrastructure monitoring, application performance monitoring, log management, digital experience monitoring, database and network monitoring, and security tools. Datadog also offers capabilities for incident management and cloud security.

Founded in 2010 by Olivier Pomel and Alexis Lê-Quôc, Datadog serves customers around the world.