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

Datadog (NASDAQ:DDOG) released its quarterly earnings data on Thursday. The company reported $0.65 EPS for the quarter, beating analysts’ consensus estimates of $0.58 by $0.07, FiscalAI reports. Datadog had a net margin of 4.48% and a return on equity of 5.67%. The company had revenue of $1.12 billion during the quarter, compared to the consensus estimate of $1.08 billion. During the same quarter in the prior year, the firm earned $0.46 EPS. Datadog’s quarterly revenue 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 Trading Up 2.0%

NASDAQ:DDOG traded up $4.64 on Friday, reaching $233.93. The company’s stock had a trading volume of 8,531,977 shares, compared to its average volume of 4,713,936. Datadog has a 12-month low of $98.01 and a 12-month high of $292.72. The stock has a 50 day moving average price of $249.29 and a 200 day moving average price of $177.85. The firm has a market cap of $83.27 billion, a price-to-earnings ratio of 477.42, a price-to-earnings-growth ratio of 23.23 and a beta of 1.54. The company has a quick ratio of 3.40, a current ratio of 3.20 and a debt-to-equity ratio of 0.23.

Trending Headlines about 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

Analyst Upgrades and Downgrades

A number of equities analysts have weighed in on the company. Scotiabank reissued an “outperform” rating and set a $285.00 price objective on shares of Datadog in a research note on Friday. Daiwa Securities Group lifted their price target on Datadog from $190.00 to $240.00 and gave the stock a “buy” rating in a report on Wednesday, May 13th. Rothschild & Co Redburn began coverage on shares of Datadog in a research report on Thursday, April 23rd. They set a “buy” rating and a $170.00 price target on the stock. DA Davidson reissued a “buy” rating and issued a $315.00 price objective on shares of Datadog in a report on Friday. Finally, Bank of America raised their price objective on shares of Datadog from $260.00 to $280.00 and gave the stock a “buy” rating in a research report on Monday, June 8th. 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 given a Sell rating to the stock. Based on data from MarketBeat.com, Datadog currently has a consensus rating of “Moderate Buy” and an average target price of $276.32.

Insider Buying and Selling at Datadog

In related news, CTO Alexis Le-Quoc sold 53,912 shares of the firm’s stock in a transaction dated Monday, June 1st. The stock was sold at an average price of $271.05, for a total transaction of $14,612,847.60. Following the completion of the sale, the chief technology officer directly owned 531,311 shares of the company’s stock, valued at approximately $144,011,846.55. This trade represents a 9.21% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, Director Dev Ittycheria sold 120,000 shares of the business’s stock in a transaction dated Wednesday, June 3rd. The shares were sold at an average price of $248.78, for a total transaction of $29,853,600.00. Following the completion of the sale, the director owned 39,235 shares in the company, valued at approximately $9,760,883.30. This trade represents a 75.36% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. In the last quarter, insiders sold 1,502,163 shares of company stock worth $363,481,842. Insiders own 6.48% of the company’s stock.

Institutional Investors Weigh In On Datadog

A number of institutional investors and hedge funds have recently made changes to their positions in the stock. Price T Rowe Associates Inc. MD lifted its stake in Datadog by 7.1% during the fourth quarter. Price T Rowe Associates Inc. MD now owns 14,423,814 shares of the company’s stock worth $1,961,496,000 after purchasing an additional 956,993 shares in the last quarter. State Street Corp boosted its position in shares of Datadog by 106.8% during the third quarter. State Street Corp now owns 13,732,777 shares of the company’s stock worth $1,955,547,000 after buying an additional 7,091,075 shares during the period. Invesco Ltd. grew its stake in shares of Datadog by 119.2% in the third quarter. Invesco Ltd. now owns 4,075,721 shares of the company’s stock valued at $580,383,000 after buying an additional 2,216,402 shares in the last quarter. Northern Trust Corp grew its stake in shares of Datadog by 1.8% in the fourth quarter. Northern Trust Corp now owns 2,754,782 shares of the company’s stock valued at $374,623,000 after buying an additional 47,491 shares in the last quarter. Finally, Charles Schwab Investment Management Inc. raised its holdings in shares of Datadog by 3.5% in the 4th quarter. Charles Schwab Investment Management Inc. now owns 2,391,601 shares of the company’s stock valued at $325,234,000 after buying an additional 80,781 shares during the period. 78.29% of the stock is owned by hedge funds and other institutional investors.

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.