Datadog (NASDAQ:DDOG – Get Free Report) announced its earnings results on Thursday. The company reported $0.65 earnings per share 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 firm had revenue of $1.12 billion for the quarter, compared to the consensus estimate of $1.08 billion. During the same period in the previous year, the business earned $0.46 EPS. The firm’s revenue for the quarter was up 35.6% on a year-over-year basis. 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 Stock Performance
NASDAQ:DDOG traded up $4.64 during mid-day trading on Friday, hitting $233.93. The company’s stock had a trading volume of 8,531,977 shares, compared to its average volume of 4,713,936. The business’s fifty day moving average is $249.29 and its two-hundred day moving average is $177.85. The stock has a market cap of $83.27 billion, a price-to-earnings ratio of 477.42, a PEG ratio of 23.23 and a beta of 1.54. The company has a debt-to-equity ratio of 0.23, a current ratio of 3.20 and a quick ratio of 3.40. Datadog has a 1 year low of $98.01 and a 1 year high of $292.72.
Analyst Ratings Changes
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Key Stories 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
Insiders Place Their Bets
In other news, CFO David M. Obstler sold 75,000 shares of the company’s stock in a transaction dated Monday, June 8th. The stock was sold at an average price of $231.69, for a total value of $17,376,750.00. Following the sale, the chief financial officer owned 434,591 shares in the company, valued at $100,690,388.79. This represents a 14.72% decrease in their ownership of the stock. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Michael James Callahan sold 112,500 shares of the firm’s stock in a transaction dated Friday, June 12th. The stock was sold at an average price of $231.60, for a total value of $26,055,000.00. Following the sale, the director directly owned 14,996 shares in the company, valued at approximately $3,473,073.60. This trade represents a 88.24% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last quarter, insiders have sold 1,502,163 shares of company stock worth $363,481,842. 6.48% of the stock is currently owned by company insiders.
Institutional Inflows and Outflows
A number of large investors have recently modified their holdings of the company. JPL Wealth Management LLC acquired a new stake in shares of Datadog during the 3rd quarter valued at about $27,000. Quarry LP acquired a new position in Datadog in the 3rd quarter valued at $45,000. DV Equities LLC acquired a new position in Datadog during the fourth quarter worth about $62,000. Geneos Wealth Management Inc. raised its position in shares of Datadog by 17.6% during the 1st quarter. Geneos Wealth Management Inc. now owns 769 shares of the company’s stock valued at $76,000 after buying an additional 115 shares during the period. Finally, GW&K Investment Management LLC lifted its stake in shares of Datadog by 964.3% in the 4th quarter. GW&K Investment Management LLC now owns 596 shares of the company’s stock valued at $81,000 after purchasing an additional 540 shares during the last quarter. Institutional investors and hedge funds own 78.29% of the company’s stock.
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.
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