Snowflake klesá o 5 % po 17% skoku po výsledcích, když obchodníci vybírají zisky. Firma zároveň zvýšila výhled tržeb za produkt na FY27 na 6,07 mld. USD.
Snowflake surged 17% on earnings night, then spent Friday giving it back while every benchmark around it barely budged. That split-screen moment raises a pointed question about who is actually selling and why.
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Snowflake (NYSE:SNOW | SNOW Price Prediction) is handing back part of Wednesday evening’s post-earnings pop, while enterprise software peers and the broader tape barely register a wobble. That gap between a name-specific giveback and a steady sector reads like textbook profit-taking. The Invesco QQQ Trust (NASDAQ:QQQ) is unchanged at $717.67, and the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) is down 0.4% to $769.89.
Snowflake stock is down 5% to $339.60, cooling off after a one-session surge that lifted shares to a fresh multi-month high on Thursday. Meanwhile, Datadog (NASDAQ:DDOG) stock is unchanged at $214.46 as the observability peer holds its ground through Friday afternoon trading.
Profit-Taking Follows a One-Session Surge The move looks mechanical, not fundamental. Snowflake reported Q2 FY2027 results after the close on September 2, delivering non-GAAP EPS of $0.62 against a $0.447 consensus and revenue of $1.55 billion, up 35.1% year over year (YoY). Product revenue climbed 37% YoY to $1.49 billion, remaining performance obligations reached $9 billion, up 30% YoY, and net revenue retention held at 126%.
Snowflake’s management raised the company’s FY27 product revenue guide to $6.07 billion, or 36% growth, and lifted its non-GAAP operating margin guide to 14.5%. The company added 692 net new customers, up 32% YoY, its Cortex AI suite surpassed 9,100 accounts, and CoWork reached 5,800 accounts. CEO Sridhar Ramaswamy asserted, “Snowflake delivered another strong quarter, with product revenue of $1.49 billion, up 37% year-over-year, as Snowflake continues to power the enterprise AI revolution.” Snowflake stock surged 17% on the release day, and today’s pullback still leaves it up 3% over the past week.
Peer Read Confirms the Setup Datadog is a clean observability comp for a Snowflake move, and its calm trading through the session cuts against any read that enterprise software is being sold as a group. Datadog delivered its own beat on August 6, posting Q2 2026 revenue of $1.12 billion, up 35.6% YoY, and raised its full-year revenue guide to $4.45 billion to $4.47 billion. Non-GAAP operating margin expanded to 23%, and free cash flow reached $278.7 million.
With Datadog roughly flat, QQQ unchanged, and SPY only marginally lower, the Snowflake pullback registers as position unwinding rather than a reassessment of the business. Nothing about Snowflake changed overnight. Guidance held steady, disclosures were routine, and no analyst event of consequence emerged, leaving a large one-session gain to meet the natural supply of holders who had waited for exactly that gain to arrive.
The pattern isn’t new. In Q2 FY2026, Snowflake stock jumped 20% on the day of the report, then slid 6% over the following week. Post-earnings gap-fills are the norm here, and Snowflake’s operational trajectory keeps improving through them.
Session Scorecard Ticker Today Year to Date SNOW down 5% up 55% DDOG unchanged up 57% Both names have run hard in 2026. Snowflake stock is up 55% year to date (YTD), and Datadog stock is up 57% YTD. That backdrop matters. When a name this extended posts a 17% single-session pop on earnings, a giveback the following session is often the price of a crowded book meeting a natural exit. Datadog’s one-month chart tells a different story, with shares down 26% over the past month after a large-customer usage reset that management folded into guidance. Today’s steady tape under Datadog suggests investors have moved past that reset.
What to Watch Next The question price action can’t settle is whether the raised outlook deserved the size of Wednesday’s move. That answer comes with Q3 FY2027 results. Snowflake’s management guided Q3 product revenue to $1.588 billion to $1.593 billion, or 37% to 38% growth. Traders can watch for whether AI adoption keeps pulling core platform consumption higher into that report (the supplier side of that AI buildout, from power to networking, is the subject of a free report we put together here).
Anyone who bought before Snowflake’s report can treat today’s decline as normal digestion. For those who chased the pop, it’s a reminder that liquidity events aren’t information. Investors sizing new exposure to Snowflake stock here should scale their positions carefully given the YTD run and elevated near-term volatility, keeping their allocation modest until the next quarterly cadence validates the raised outlook.
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Datadog zvýšil celoroční výhled tržeb na 4,45 až 4,47 miliardy USD, i když jeho největší zákazník omezil využívání služeb. Počet klientů s ročními opakovanými tržbami nad 100 000 USD vzrostl meziročně o 23 % na zhruba 4 720.
Key Takeaways Datadog's AI suite is broadening with autonomous tools and security capabilities for agentic workloads.Datadog's $100K ARR customer base rose 23% year over year to roughly 4,720 accounts.Datadog raised 2026 revenue guidance to $4.45-$4.47 billion despite a key customer's usage reduction. Shares of Datadog (DDOG - Free Report) have surged 64.6% year to date, outperforming the broader Zacks Computer and Technology sector's growth of 15.5%, as the AI-powered observability and security platform continues to convert enterprise AI adoption into accelerating revenues.
Yet even after this sharp climb, the investment case for Datadog is not about chasing momentum. It rests on a set of fundamental drivers — expanding large-customer relationships, deepening AI-native product adoption, and a raised full-year outlook — that suggest the stock is best treated as a hold for existing shareholders rather than a fresh buy or a name to exit.
Investors already positioned in DDOG have good reason to stay put, while those still on the sidelines may be better served waiting for a more attractive entry point, given how much of the good news is already reflected in the price.
DDOG Outperforms Industry, Sector YTD
Image Source: Zacks Investment Research
AI Product Momentum Is Broadening the PlatformDatadog advanced its AI roadmap with the general availability of Bits Code, Bits Chat and Bits Agent Builder, extending its Bits AI suite toward fully autonomous incident detection, investigation and remediation. It also introduced AI Guard, a capability built to protect AI agents from prompt injection and data-poisoning attacks, addressing a security gap opening up as enterprises push more agentic workloads into production. Datadog additionally completed its acquisition of Adaptive ML, a frontier AI reinforcement-learning specialist, and was named a Leader in the Gartner Magic Quadrant for Observability Platforms for the sixth consecutive year. Together, these moves reinforce a widening platform rather than a single-product story, supporting the hold thesis even as the stock digests its year-to-date gains.
Customer Growth Remains Broad-Based, Not AI-OnlyDatadog's own disclosures point to genuinely durable demand across its full customer base rather than a narrow, AI-only bump. Management has highlighted that revenue growth among non-AI-native customers also accelerated meaningfully in the most recent quarter, indicating that core cloud-migration and modernization spend remains healthy alongside AI workloads. On the client-win front, the company reported roughly 4,720 customers with annual recurring revenues of $100,000 or more as of quarter-end, up 23% year over year, alongside a record sequential revenue increase of $115 million. That breadth across large accounts and everyday cloud customers reduces reliance on any single buyer cohort.
Raised Guidance Signals Management ConfidenceDatadog's own forward guidance, issued alongside its second-quarter 2026 results on Aug. 6, 2026, offers a more grounded, fundamentals-based read on near-term prospects than the stock chart alone does. For the third quarter of 2026, the company guided revenues to a range of $1.135 billion to $1.145 billion and non-GAAP operating income of $260 million to $270 million. For the full year, management raised its outlook to revenues of $4.45 billion to $4.47 billion, non-GAAP operating income of $1.01 billion to $1.03 billion, and non-GAAP earnings per share of $2.50 to $2.54. Notably, this guidance was raised even after factoring in a usage reduction from the company's largest customer, a sign that demand elsewhere in the customer base is more than offsetting that single account's pullback.
The Zacks Consensus Estimate for DDOG's 2026 earnings currently stands at $2.52 per share, up 4.6% over the past 30 days, compared with earnings of $2.05 per share reported in 2025. That said, the customer-concentration episode is a useful reminder that usage-based revenues can still swing with individual account behavior, a nuance that argues for patience rather than aggressive buying at current price levels.
Valuation and Competitive LandscapeFrom a valuation perspective, DDOG appears overvalued, trading at a forward price-to-sales ratio of 15.73, well above the Zacks Internet – Software industry average of 3.98, and the company carries a Value Score of F.
Datadog competes against a mix of legacy technology giants and specialized observability players, including International Business Machines (IBM - Free Report) , Cisco Systems (CSCO - Free Report) and Dynatrace Software (DT - Free Report) . IBM brings scale and deep enterprise relationships, Cisco leverages its networking footprint, and Dynatrace competes directly on AI-driven automation. Against IBM's and Cisco's broader portfolios and Dynatrace's narrower observability focus, Datadog's platform breadth remains a differentiator, even as IBM, Cisco and Dynatrace intensify AI-native monitoring investment.
Investors may still hold despite the premium valuation because accelerating large-customer growth and raised full-year guidance suggest fundamentals are catching up to the multiple. Holding through the run is reasonable too, since the gains largely reflect improving operating leverage and cash-flow growth rather than sentiment.
DDOG’s Valuation Looks Steep
Image Source: Zacks Investment Research
ConclusionDatadog's fundamentals, broadening AI product adoption, resilient large-customer growth and an upwardly revised full-year outlook paint a picture of a durable, expanding platform rather than a stock riding a temporary wave. At the same time, a stretched valuation, a soft Value Score and lingering customer-concentration risk argue against adding aggressively after such a steep run. For current shareholders, the balance of evidence favors holding and letting the underlying business continue to compound its growth through disciplined execution; for prospective buyers watching from the sidelines, waiting patiently for a calmer, more attractive entry point remains the more prudent near-term path forward. Datadog stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Datadog hlásí silnější přijetí více produktů: k 30. červnu 2026 používalo 58 % zákazníků alespoň čtyři a 37 % šest či více. Real User Monitoring překonal 200 milionů USD v ARR a meziročně rostl o více než 50 %.
Key Takeaways Datadog saw 58% of customers use at least four products, while 37% used six or more as of June 2026.A major online media company signed a multiyear Datadog deal worth more than $30 million in contract value.Datadog's Real User Monitoring topped $200 million in ARR and grew more than 50% year over year. Datadog’s (DDOG - Free Report) multi-product strategy is gaining traction; a growing number of customers are adopting its additional products, thereby creating further opportunities to increase revenues from existing customers. As of June 30, 2026, 58% of customers used at least four Datadog products, up from 52% a year earlier, while the share using six or more rose to 37% from 29%; those using 10 or more nearly doubled to 13% from 7%. Datadog's land-and-expand model supports this expansion, as management notes that the company typically lands customers with two or more products and then expands from there.
The strategy is also translating into larger customer relationships. A South American bank consolidated onto 11 Datadog products and is adding security offerings, while a Fortune 100 health insurer is expanding to 19 products. A major online media company signed a multiyear deal worth more than $30 million in total contract value after standardizing on Datadog and adopting products beyond core observability, including Product Analytics, CI Visibility, Data Observability and Cloud Cost Management.
Datadog's expanding product footprint is creating more opportunities to deepen existing customer relationships. RUM, or Real User Monitoring, surpassed $200 million in ARR and grew more than 50% year over year, with customers increasingly using it alongside Product Analytics. Together, rising multi-product adoption, larger platform deployments and growth in newer offerings could help Datadog generate more revenues from its existing customer base.
The Zacks Consensus Estimate projects year-over-year total revenue growth of 28.9% in 2026, highlighting the company's growth potential.
DDOG Faces Stiff Competition From Dynatrace & CiscoDynatrace (DT - Free Report) and Cisco (CSCO - Free Report) are broadening their unified platforms to encourage tool consolidation and deeper customer adoption, intensifying competition for the same expansion opportunities underpinning DDOG’s multi-product strategy.
Dynatrace is competing with DDOG through an end-to-end observability platform designed to drive broader adoption and consolidation. DT says customers often expand quickly, with significant cross-sell and upsell opportunities, while log-management growth and AI observability create additional consumption. DT’s 110% NRR reinforces the expansion opportunity.
Cisco challenges DDOG through a broader technology portfolio spanning networking, security and observability. CSCO says more than half of customers buy both campus and data-center networking, while Splunk integration is generating whole-portfolio agreements. Cisco’s unified cloud control further strengthens cross-product adoption by providing a single management plane across various products.
DDOG’s Share Price Performance, Valuation & EstimatesShares of DDOG have surged 66.1% year to date, outperforming the broader Zacks Computer and Technology sector's growth of 15.7%.
DDOG’s YTD Price Performance
Image Source: Zacks Investment Research
From a valuation perspective, DDOG appears overvalued, trading at a forward price-to-sales ratio of 15.93, significantly higher than the Internet – Software industry average of 3.93. The company carries a Value Score of F.
DDOG’s Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for DDOG’s 2026 earnings is currently pegged at $2.52 per share, an increase of 4.6% over the past 30 days. The company reported earnings of $2.05 per share in 2025.
Image Source: Zacks Investment Research
Datadog stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Datadog hlásí, že zákazníci s ARR nad 100 000 USD vzrostli meziročně o 23 % na zhruba 4 720 a tvoří 91 % celkového ARR. Firma zároveň čeká tržby za 3. čtvrtletí fiskálního roku 2026 ve výši 1,135–1,145 miliardy USD.
Key Takeaways Datadog's $100,000-plus ARR customers rose 23% to about 4,720, contributing 91% of total ARR.Enterprise new-logo bookings more than doubled, while new customers drove about 30% of Q2 revenue growth.Datadog expects Q3 2026 revenues of $1.135-$1.145 billion as customers expand platform usage. Datadog (DDOG - Free Report) is seeing strong growth in its large customer base, with customers generating at least $100,000 in ARR rising 23% year over year to approximately 4,720 as of June 30, 2026. These accounts contributed about 91% of total ARR, up from 89% a year earlier, strengthening the company’s high-value recurring revenue base.
Datadog is also gaining momentum in enterprise sales. New-logo annualized bookings in the enterprise segment more than doubled year over year, while new customers contributed about 30% of year-over-year revenue growth in the second quarter. The company’s AI customer base is also becoming more valuable, with more than 750 AI customers, including 31 spending over $1 million annually and eight spending over $10 million annually.
Importantly, large customers are expanding their use of the platform. A Fortune 100 insurer is expected to use 19 Datadog products, while a major online media company signed a multiyear deal worth more than $30 million in TCV. Datadog’s low-120% net revenue retention also reflects continued expansion from existing customers.
Looking ahead, Datadog expects third-quarter 2026 revenues of $1.135-$1.145 billion, suggesting continued momentum following the strong second-quarter performance. The outlook provides further support for the company’s growth trajectory as its large customer base expands and existing customers increase platform usage.
Taking a Look at DDOG’s CompetitorsThe customer base remains a key battleground in observability, with Datadog, Dynatrace and Elastic pursuing different strategies to attract, retain and expand enterprise customers.
Dynatrace (DT - Free Report) competes with Datadog’s broader 33,400-customer base through an enterprise-focused strategy, adding 122 new logos and achieving more than 160% new-logo ARR growth. Dynatrace’s unified AI-powered observability, open interoperability and platform-consolidation approach support larger customer lands, while average ARR per customer exceeds $500,000. Dynatrace’s mid-90s gross retention and 110% NRR strengthen expansion opportunities.
Elastic’s (ESTC - Free Report) growing base of high-value customers strengthens its competitive position against Datadog, with more than 1,720 customers exceeding $100,000 ACV and over 240 above $1 million. Elastic emphasizes multiyear commitments without material changes in discount practices, while AI, search, security and observability broaden its opportunity. The company’s data gravity, context platform and specialized agents support consolidation, helping Elastic deepen customer relationships.
DDOG’s Share Price Performance, Valuation & EstimatesShares of DDOG have surged 77.2% year to date, outperforming the broader Zacks Computer and Technology sector's growth of 18.3%.
DDOG’s YTD Price Performance
Image Source: Zacks Investment Research
Datadog trades at a premium with a Price-to-Book (P/B) ratio of 19.64 compared to the broader Zacks Internet – Software industry's multiple of 5.01. DDOG carries a Value Score of F.
DDOG’s Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for DDOG’s 2026 earnings is currently pegged at $2.43 per share, increased by 2 cents over the past 30 days. The company reported earnings of $2.05 per share in 2025.
Image Source: Zacks Investment Research
Datadog stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Datadog uvedl, že růst táhnou širší platforma, zisk podílu na trhu a silnější poptávka po AI a modernizaci technologií. Ve čtvrtletí mezikvartálně přidal 115 milionů USD tržeb.
3 of the Market's Most-Upgraded Tech Stocks Right NowDatadog NASDAQ: DDOG Chief Financial Officer David Obstler said the company’s recent growth has been supported by a broader product platform, market-share gains and expanding demand across customer sizes and geographies. In a conference discussion with Canaccord Genuity technology analyst Kingsley Crane, Obstler said the company has benefited from customers modernizing technology stacks and preparing infrastructure for artificial intelligence workloads.
Crane characterized Datadog’s latest quarter as featuring 36% growth at a $1.1 billion scale, accelerating from 32%, and noted that growth had accelerated over the past five quarters. Obstler said the results reflected investments in the platform that have expanded the product portfolio and enabled greater cross-selling.
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Datadog’s Drop Says More About Expectations Than Earnings“We’re seeing strength across all the way from SMB to enterprise and globally,” Obstler said. “Anytime we have a re-platforming and a modernization of tech stack, that’s complemented Datadog in their growth.”
Platform adoption and customer expansion Obstler said growth has not been limited to AI-native companies. He said enterprise customers have accelerated adoption of the Datadog platform, driven by demand for integrated, real-time observability and security capabilities.
5 Tech Stocks Holding Their Ground Through the AI Trade PullbackHe pointed to what he described as substantial market-share gains, saying Datadog added $115 million in revenue sequentially during the last quarter. The company’s platform approach appeals to customers seeking a “single pane of glass” for monitoring and security, he said.
Datadog’s customer expansion model generally unfolds over multiple years, according to Obstler. Customers often initially use other vendors, then add Datadog products as existing contracts come up for renewal. The company sells capacity through a credit-based model, allowing customers to use different products on the platform.
Obstler said cohorts signed five years ago are continuing to expand, supported by product additions and vendor consolidation. He cited net retention in the low 120% range as evidence of the durability of that expansion motion.
Customers increasingly adopt more Datadog products over time, rather than switching all tools at once. Modern and mission-critical workloads have increasingly been directed to Datadog for monitoring, Obstler said. Datadog works with customers on capacity planning under contracts that generally span at least one year and can extend to three years. AI-native customers and production workloads Obstler said AI-native companies represent a smaller percentage of Datadog’s annual recurring revenue than cloud-native customers did during the COVID-era technology boom, but the group is growing quickly. He said Datadog had more than 750 AI-native customers, with more than 30 generating at least $1 million in annual recurring revenue.
Those companies include model providers, database providers, GPU providers and companies serving specific industry verticals, he said. While Obstler acknowledged that AI-native markets could be volatile, he described the segment as an endorsement of Datadog’s position in modern technology infrastructure.
He said AI-related monitoring demand is increasingly shifting from training and research into production environments. Datadog is positioned to monitor applications using large language models, agents, coding agents and GPU infrastructure, he said. The company is also beginning to address more training-related use cases.
“We basically set that up, and we’ve been seeing very good growth in that area,” Obstler said of AI monitoring. He added that Datadog monetizes these offerings through usage-based pricing tied to data consumed, investigations and related activity.
Bits AI and product investment Obstler also discussed “AI for Datadog,” referring to the company’s use of AI within its own platform. He said the Bits AI product is designed to help users automate investigations, analyze issues, route cases and eventually support more self-remediation.
The company has broadened Bits AI beyond reliability engineering investigations into development and security use cases, Obstler said. Datadog has tested pricing approaches, moving from a per-investigation model toward token-based pricing in some areas.
Datadog’s data sets, platform integration and existing use of machine learning for analytics provide an advantage in observability-specific AI, Obstler said. He said the company’s vision is to provide specialized intelligence that can identify problems and, in certain instances, enable customers to approve automated remediation.
Obstler said Datadog plans to continue investing in both sales capacity and research and development. Sales capacity has expanded globally at roughly the same pace as revenue, he said. While the company expects a greater share of R&D resources to shift toward tokens and AI tools over time, he said management is focused on using those tools to develop products rather than pursuing AI investment at the expense of margins.
Competitive strategy Addressing competition from companies expanding their own platforms, including security and data-focused vendors, Obstler said Datadog remains focused on observing software in production and on adjacent opportunities where its observability platform creates synergies.
He cited cloud workload security, Cloud SIEM and service management as areas where Datadog can expand, while emphasizing that the company is not attempting to address every segment of the broader security market. Obstler said Datadog’s focus on modern cloud workloads, coupled with continued R&D investment, has strengthened rather than weakened its competitive position.
About Datadog (NASDAQ:DDOG)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.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].
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Datadog ve 2. čtvrtletí překonal odhady, výnosy vzrostly o 36 % na 1,12 miliardy USD a non-GAAP EPS o 41,3 % na 65 centů. Zároveň zvýšil výhled výnosů pro rok 2026 na 4,45–4,47 miliardy USD.
Key Takeaways Datadog beat Q2 expectations as revenues rose 36% to $1.12 billion and non-GAAP EPS climbed 41.3%.DDOG raised 2026 revenue guidance to $4.45-$4.47 billion and non-GAAP EPS outlook to $2.50-$2.54.Datadog serves 750 AI customers, while its expanding AI portfolio targets demand across the AI stack. Datadog (DDOG - Free Report) , the leading AI-powered observability and security platform, delivered strong second-quarter 2026 results, with both the top and bottom lines exceeding expectations. Total revenues rose 36% to $1.12 billion, while non-GAAP EPS of 65 cents rose 41.3% year over year.
Building on this momentum, Datadog raised its full-year 2026 revenue guidance to $4.45-$4.47 billion, implying approximately 30% year-over-year growth. The company also increased its non-GAAP EPS outlook to $2.50-$2.54, underscoring management’s confidence in its growth line.
Analyst sentiment remains positive, with the Zacks Consensus Estimate projecting 2026 revenues of $4.41 billion, up 28.82% year over year. The earnings estimate of $2.43 per share has also been revised upward over the past 60 days, implying 18.54% year-over-year growth and indicating expectations for continued strong financial performance, which supports the stock’s investment outlook.
Image Source: Zacks Investment Research
The bullish sentiment is also reflected in DDOG's stock performance. The company’s shares closed at $233.93 on Friday, gaining 4.64% for the session, and have surged 72% year to date. This significantly outpaces the Zacks Internet - Software industry, which has declined 3.2%, and the broader Zacks Computer and Technology sector, which has gained 18.3%.
Datadog has also outperformed its peers, including Arista Networks (ANET - Free Report) , Paycom Software (PAYC - Free Report) and Unity Software (U - Free Report) , over the same time frame. While Arista Networks and Paycom Software shares have appreciated 44% and 34.9%, respectively, Unity Software shares have fallen 2.6%, highlighting Datadog’s stronger stock market performance.
YTD Price Performance Comparison
Image Source: Zacks Investment Research
Now, the question arises: is this the right time to add this stock to your portfolio? Let us examine the key factors driving the rise in the share price, the emerging AI opportunity and valuation to assess the stock’s investment prospects.
Key Q2 Tailwinds Supporting DDOG StockDatadog’s latest results highlight sustained business momentum, driven by growing customer adoption and the expanding role of its platform in managing increasingly complex cloud and AI workloads. Strong cash generation was another key positive, with the company delivering $316 million in operating cash flow and $279 million in free cash flow during the second quarter, translating into a 25% free cash flow margin. Datadog ended the quarter with approximately $5 billion in cash, cash equivalents and marketable securities, providing a strong financial cushion to support continued investments in product innovation, strategic initiatives and potential acquisitions.
Customer growth and expansion trends also remain encouraging. Datadog ended the second quarter with roughly 33,400 customers, while the number of customers generating at least $100,000 in ARR increased 23% year over year to approximately 4,720, accounting for about 91% of total ARR. Importantly, customers are increasingly adopting multiple Datadog products: 58% now use at least four products, compared with 52% a year ago, while 13% use 10 or more products, versus 7% a year ago. RUM has also surpassed $200 million in ARR and is growing more than 50% year over year. This increasing platform adoption could support higher customer spending and strengthen retention over the long term.
Another significant area of long-term growth is platform consolidation and enterprise-level expansion. In the second quarter, Datadog’s RPO reached $3.47 billion — a 43% increase year over year — while current RPO grew by approximately 40% during the same period. The company also won several large enterprise deals, including a multiyear deal worth more than $30 million in total contract value in which a major online media company standardized on Datadog and replaced four commercial and internal tools.
Datadog is also expanding into security, data observability, cloud cost management, digital experience and Bring Your Own Cloud. These opportunities could allow the company to capture a larger share of enterprise technology spending while increasing the value of its platform beyond traditional observability.
AI Adds a New Secular Growth Driver for DDOGAI is emerging as a powerful new growth catalyst for Datadog, complementing its established secular tailwinds from cloud migration and digital transformation. As AI workloads expand cloud consumption, they are driving greater demand for Datadog’s observability platform. The company now serves more than 750 AI customers, including all 10 of the top AI leaders, while AI monitoring volumes have accelerated sharply.
The opportunity could broaden further as AI moves from model training toward inference and agentic applications. Datadog sees observability opportunities across the entire AI stack — from GPUs and infrastructure to LLMs, tool calls, applications and agent outcomes. Its expanding Datadog for AI portfolio, including Agent Observability, GPU Monitoring, Data Observability and AI Guard, positions DDOG to capture this emerging demand.
DDOG Stock Trades at a PremiumDatadog shares are trading at a premium, as suggested by a Value Score of F.
In terms of the forward 12-month price-to-sales (P/S), Datadog is trading at 16.81X, higher than the industry’s 4.05X. DDOG also trades at a higher multiple than Arista Networks (16.64X), Paycom Software (4.22X) and Unity Software (7.77X).
DDOG Forward 12-Month P/S Ratio
Image Source: Zacks Investment Research
ConclusionDatadog enters the second half of 2026 with compelling fundamental momentum. Accelerating customer adoption, expanding enterprise penetration, strong cash generation and AI-driven demand provide multiple avenues for long-term growth. The company’s ability to expand from observability into security and AI management could further increase its addressable market. These factors are expected to push the stock upward and justify a premium valuation.
Datadog currently carries a Zacks Rank #2 (Buy) and a Growth Score of A, a favorable combination that offers a strong investment opportunity per the Zacks Proprietary methodology. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Datadog ve 2. čtvrtletí zvýšil tržby o 36 % na 1,12 miliardy USD a non-GAAP EPS dosáhl 65 centů. Pro 3. čtvrtletí čeká tržby 1,135–1,145 miliardy USD, ale u svého největšího zákazníka počítá s nižším využitím od 3. čtvrtletí.
Key Takeaways Datadog's Q2 revenues rose 36% to $1.12 billion, while non-GAAP EPS reached 65 cents.More than 750 AI customers use Datadog, with 31 spending over $1 million annually. Datadog sees Q3 revenues of $1.135B-$1.145B after derisking lower usage at its largest customer. Datadog, Inc. (DDOG - Free Report) used its second-quarter 2026 earnings call to emphasize accelerating demand across AI and non-AI customers, while acknowledging a usage reduction at its largest customer.
Co-Founder and CEO Olivier Pomel framed AI as an additional growth driver, citing stronger cloud consumption, new observability workloads and wider adoption of Bits AI and security products.
DDOG Sees Broad-Based Growth AccelerationRevenues rose 36% year over year to $1.12 billion, while non-GAAP earnings were 65 cents per share. Revenues and earnings exceeded the Zacks Consensus Estimate of $1.08 billion and 58 cents, respectively.
CFO David Obstler said sequential revenue growth of 11% was the strongest since the second quarter of 2022, with a record $115 million added from the first quarter. Non-AI customer revenue growth accelerated to the high-20% range.
Datadog ended the second quarter with about 4,720 customers generating at least $100,000 in ARR, up from about 3,850 a year earlier.
Datadog Builds Around AI-Native DemandPomel said more than 750 AI customers use Datadog, including all 10 companies management identifies as leading AI players. Obstler added that 31 AI customers spend more than $1 million annually, including eight above $10 million.
Pomel said MCP tool calls quadrupled again sequentially and rose more than 22 times versus Q4 2025. He described observability opportunities across GPUs, models, agents and the applications those agents call.
Obstler said enterprise new-logo annualized bookings more than doubled year over year. New customers accounted for about 30% of year-over-year revenue growth, up from 25% in the first quarter.
DDOG Pushes Bits AI Deeper Into OperationsPomel said Bits AI has expanded beyond alert investigation into chat, monitoring management, coding, testing and release validation. Datadog is also rolling out AI-credit packaging as its use cases broaden.
A Bank of America analyst asked whether automation could reduce traditional observability activity. Pomel said Bits AI users are deploying more of the platform, creating more dashboards and alerts, and bringing more users into Datadog.
Pomel also said Bits Security Analyst is being separated from Datadog's SIEM so it can work with other SIEMs, widening the market for AI-driven security operations.
Datadog Derisks Largest-Customer UsageManagement disclosed a nine-figure renewal with its largest customer, but said usage will decline beginning in the third quarter. Pomel said Datadog fully derisked guidance for that customer so the account would not overshadow broader business trends.
For the third quarter, revenues are expected to be $1.135 billion to $1.145 billion, representing 28% to 29% growth, with non-GAAP earnings estimated to be 63 to 65 cents per share. Full-year revenue guidance is $4.45 billion to $4.47 billion.
A Morgan Stanley analyst pressed for renewal details and the lower usage. Pomel declined to discuss customer-specific economics, while stressing that growth excluding the largest customer has continued to accelerate.
DDOG Q&A Tests Sustainability and SpendA Goldman Sachs analyst raised customer concerns about Datadog bills. Pomel said the company must show its software saves customers money or helps them make money, and highlighted AI cost control as a growing priority.
Pomel said Infinite Cardinality Metrics is designed to reduce billing unpredictability when customers send more granular data. He tied the product to rising data volumes and more complex questions from AI applications.
A JPMorgan analyst asked whether non-AI acceleration is sustainable. Pomel said growth is largely coming from existing customers through higher volumes, cloud migration and broader product adoption. Obstler also cited expanded go-to-market capacity.
Datadog Keeps Investing Into ScalePomel closed with confidence on product development and go-to-market execution, saying Datadog has more products planned for the remainder of the year and large sales pipelines to pursue.
Obstler said R&D and go-to-market investments are producing results and positioning the company for continued execution.
DDOG's Zacks Signals Stay MixedDDOG carries a Zacks Rank #2 (Buy), alongside a Growth Score of A, Momentum Score of A and a VGM Score of B. Under the Zacks Style Scores framework, A and B are the more favorable grades, especially when paired with a Zacks Rank #1 (Strong Buy) or #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Value Score of F tempers that profile because the framework gives its strongest preference to top-ranked stocks with A or B individual Style Scores. The Zacks Rank can change as earnings estimates are revised after the reported results.
Datadog, Inc. (DDOG) Q2 2026 Earnings Call August 6, 2026 8:00 AM EDT
Company Participants
Yuka Broderick - Investor Relations
Olivier Pomel - Co-Founder, CEO & Director
David Obstler - Chief Financial Officer
Conference Call Participants
Sanjit Singh - Morgan Stanley, Research Division
Raimo Lenschow - Barclays Bank PLC, Research Division
Gabriela Borges - Goldman Sachs Group, Inc., Research Division
Michael Cikos - Needham & Company, LLC, Research Division
Aleksandr Zukin - Wolfe Research, LLC
Koji Ikeda - BofA Securities, Research Division
Samik Chatterjee - JPMorgan Chase & Co, Research Division
Howard Ma - Guggenheim Securities, LLC, Research Division
Andrew Sherman - TD Cowen, Research Division
Brad Reback - Stifel, Nicolaus & Company, Incorporated, Research Division
Ittai Kidron - Oppenheimer & Co. Inc., Research Division
Andrew DeGasperi - BNP Paribas, Research Division
Presentation
Operator
Good day, and thank you for standing by. Welcome to the Q2 2026 Datadog Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Yuka Broderick, Senior Vice President of Investor Relations. Please go ahead.
Yuka Broderick
Investor Relations
Thank you, Lauren. Good morning, and thank you for joining us to review Datadog's second quarter 2026 financial results, which we announced in our press release issued this morning. Joining me on the call today are Olivier Pomel, Datadog's Co-Founder and CEO; and David Obstler, Datadog's CFO. During this call, we will make forward-looking statements, including statements related to our future financial performance, our outlook for the third quarter and the fiscal year 2026 and related notes and assumptions, our product capabilities and our ability to capitalize on market opportunities.
The words anticipate, believe, continue, estimate, expect, intend, will and similar expressions are intended to identify forward-looking statements or similar indications of future expectations. These statements reflect our views today and are subject to a variety of
Datadog ve 2. čtvrtletí vykázal zisk 0,65 USD na akcii a výnosy 1,12 miliardy USD, obojí nad odhady. Zisk byl také vyšší než 0,46 USD na akcii před rokem.
Datadog (DDOG - Free Report) came out with quarterly earnings of $0.65 per share, beating the Zacks Consensus Estimate of $0.58 per share. This compares to earnings of $0.46 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of +12.07%. A quarter ago, it was expected that this data analytics and cloud monitoring company would post earnings of $0.5 per share when it actually produced earnings of $0.6, delivering a surprise of +20%.
Over the last four quarters, the company has surpassed consensus EPS estimates four times.
Datadog, which belongs to the Zacks Internet - Software industry, posted revenues of $1.12 billion for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 3.85%. This compares to year-ago revenues of $826.76 million. The company has topped consensus revenue estimates four times over the last four quarters.
The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.
Datadog shares have added about 108.2% since the beginning of the year versus the S&P 500's gain of 12.8%.
What's Next for Datadog?While Datadog has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?
There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.
Ahead of this earnings release, the estimate revisions trend for Datadog was favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.60 on $1.09 billion in revenues for the coming quarter and $2.42 on $4.34 billion in revenues for the current fiscal year.
Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Internet - Software is currently in the top 44% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
DocuSign (DOCU - Free Report) , another stock in the same industry, has yet to report results for the quarter ended July 2026.
This provider of electronic signature technology is expected to post quarterly earnings of $1.08 per share in its upcoming report, which represents a year-over-year change of +17.4%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.
DocuSign's revenues are expected to be $868.04 million, up 8.4% from the year-ago quarter.
Datadog na začátku obchodování klesl téměř o 18 %, i když za 2. čtvrtletí překonal odhady zisku i tržeb a zvýšil celoroční výhled. Investoři se zaměřili na zpomalení růstu tržeb ve 3. čtvrtletí.
Datadog shares DDOG dropped nearly 18% at market open on Thursday despite the cloud monitoring and analytics company reporting better-than-expected second-quarter earnings and raising its full-year financial outlook.
The sharp decline came after the stock had reached a record closing high earlier this week, with analysts pointing to profit-taking and elevated investor expectations for 2H revenue as key reasons behind the selloff.
Some market participants cited management's third-quarter guidance, which, although above Wall Street estimates, implied a notable sequential slowdown in revenue growth compared with the first half of the year, as reason behind the stock price decline.
The software company reported adjusted earnings of 65 cents per share for the second quarter, compared with 46 cents a year earlier and ahead of analysts' expectations of 58 cents, according to FactSet.
Revenue rose 36% year over year to $1.12 billion, surpassing consensus estimates of $1.08 billion.
Looking ahead, Datadog expects third-quarter adjusted earnings of between 63 cents and 65 cents per share, with revenue projected in the range of $1.135 billion to $1.145 billion.
Those figures remain above Wall Street expectations of 61 cents per share and $1.11 billion in revenue.
However, investors focused on the implied slowdown in growth after a strong first half of the year.
"Datadog just showed how expensive one quarter of deceleration can be," AInvest wrote on X.
"Q3 guidance points to roughly 29% growth. After a 94% six-month rally, the stock is down about 21% premarket. The same reset is hitting $APP (-19%), $HUBS (-23%), and $FIG (-14%). Strong results can still meet unforgiving valuations when acceleration is already priced in," the post added.
For the full fiscal year, the company raised its outlook, forecasting adjusted earnings of $2.50 to $2.54 per share and revenue between $4.45 billion and $4.47 billion.
The revised guidance is higher than its previous forecast and comfortably ahead of analysts' estimates of $2.42 per share on revenue of $4.35 billion.
Datadog has been one of the strongest-performing software stocks this year, with shares gaining more than 110% in 2026 before Thursday's decline.
The strong rally had left investors with little room for disappointment.
Evercore ISI analysts said the market reaction appeared excessive.
"The initial reaction seems a bit extreme as the company delivered solid F2Q results, and while the lack of revenue acceleration in 2H may weigh on the uber bull case, DDOG remains one of the best growth stories in software," they said.
Datadog remains closely tied to the expanding artificial intelligence market, providing monitoring and observability tools for AI chips, coding agents and cloud infrastructure.
Its customer base includes AI developers and major cloud providers such as OpenAI and Amazon Web Services.
The company also reported continued expansion among its largest customers.
Datadog ended the quarter with approximately 4,720 customers generating annual recurring revenue of more than $100,000, compared with 3,850 customers a year earlier.
Chief Executive Olivier Pomel said AI adoption continues to drive customer demand for the company's platform.
"Our customers are building and deploying with AI, and they are using the Datadog platform to observe, secure, and act on their AI-enabled solutions," Pomel said in the earnings release.
"We are innovating rapidly to help our customers manage rising complexity, and increasingly build autonomy into their operations."
SoundHound AI po výsledcích za 2. čtvrtletí vyskočila o 12 % po tržbách ve výši 61,9 mil. USD a zvýšení celoročního výhledu na 230 až 260 mil. USD. Unity Software přidala 11 %, zatímco Datadog klesl o 15 %.
Three enterprise software names are moving in opposite directions Thursday morning after earnings results. SoundHound AI (NASDAQ:SOUN) stock is up 12% to $7.23, Unity Software (NYSE:U | U Price Prediction) shares are up 11% to $39.33, and Datadog (NASDAQ:DDOG) shares are down 15% to $239.71.
The Invesco QQQ Trust (NASDAQ:QQQ) (which tracks the NASDAQ 100 index) is roughly flat, so today’s action is stock-specific. Traders are separating the winners from the losers on valuation and expectations.
SoundHound AI Rally Follows a Beat and a Raise SoundHound posted Q2 revenue of $61.9 million, beating the $52.4 million consensus estimate. Furthermore, the company’s adjusted EBITDA loss narrowed to $9.6 million.
Management raised full-year 2026 revenue guidance to $230 million to $260 million, pending the LivePerson acquisition closing before year-end. SoundHound ended the quarter with $203 million in cash and no debt.
Growth is driven by SoundHound’s OASYS agentic AI platform and enterprise wins including eight-figure multi-year Latin America contract spanning 20+ countries, seven-figure China automotive infotainment agreement, and seven-figure healthcare deal. Automotive partners Stellantis (NYSE:STLA) and Hyundai expanded live generative AI deployments.
CEO Keyvan Mohajer stated, “Our exceptional Q2 results demonstrate the momentum SoundHound is building… With our Q2 revenue now 10 times what it was when we debuted as a public company in Q2 2022, and enterprise demand for high-ROI voice and agentic AI accelerating globally, our OASYS platform and in-house model innovations position us to lead in the new era of enterprise automation.” The pending acquisition of LivePerson is expected to close before the end of 2026.
SoundHound stock had entered earnings down 36% year to date (YTD). Reddit chatter turned very bullish with a sentiment score of 82 ahead of the release.
Unity Beat and Raise Powers a Rebound Unity reported Q2 revenue of $546 million, up 24% YoY, beating $514.6 million above consensus. Adjusted EBITDA came in at $160 million at a 29% margin, up from $90 million and a 21% margin versus a year ago. Moreover, the company’s free cash flow reached $202 million.
Unity’s Q3 2026 strategic revenue guidance of $540 million to $550 million landed above the consensus estimate, with the midpoint implying 44% to 47% YoY growth. The Grow Solutions segment, home to the Unity Vector AI ad platform, grew 35% YoY to $389 million and is driving results.
CEO Matt Bromberg called it “arguably the best quarter in Unity’s history as a public company.” Unity stock had climbed 20% over the past month, and management now expects to reach GAAP profitability by Q3 2026.
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Unity also plans to retire its 2021 convertible notes in November 2026, cleaning up the balance sheet as Vector AI ramps translate into operating leverage.
Datadog Sells Off Despite Its Own Beat and Raise Meanwhile, Datadog delivered a beat and raise. Q2 revenue of $1.12 billion beat the $1.08 billion consensus estimate and grew 35.6% YoY. Also, non-GAAP EPS of $0.65 topped the $0.58 estimate, marking the fifth straight quarterly EPS beat.
Datadog’s $100,000-plus ARR customer count grew to 4,720, up from 3,850 versus a year ago. Management raised full-year 2026 revenue guidance to $4.45 billion to $4.47 billion and non-GAAP EPS to $2.50 to $2.54. Plus, Datadog’s free cash flow margin expanded to 25% from 20% from a year ago.
CEO Olivier Pomel provided a confident assessment:
Datadog delivered a strong quarter, with 36% year-over-year revenue growth, $316 million in operating cash flow, and $279 million in free cash flow. Our customers are building and deploying with AI, and they are using the Datadog platform to observe, secure, and act on their AI-enabled solutions.
The issue was expectations. Datadog stock had rallied 108% YTD and hit an intraday record above $292 the prior session. Today’s move is on track to be one of DDOG stock’s largest single-day drops on record.
What to Watch Now SoundHound holds its earnings call at 5:00 p.m. ET tonight, where the OASYS pipeline and LivePerson integration timeline could shape the next share-price move. Unity’s call was held earlier this morning at 8:30 a.m. ET, and investors can watch for whether Vector AI momentum continues translating into upside guidance and free cash flow.
For Datadog, the debate centers on multiple compression rather than business execution. The bull case rests on 35.6% growth, AI observability leadership through Bits AI and AI Guard, and expanding free cash flow margins. The bear case is a stock that ran too far, too fast into the report, with prediction sentiment turning bearish at a composite score of 36.6.
Investors can watch for whether today’s flush finds a floor before Datadog’s next major catalyst. Position sizing across all three names should reflect the volatility on display, with new exposure warranted only after the price action stabilizes.
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Datadog, Inc. (NASDAQ:DDOG) will release its second quarter earnings report before the opening bell on Thursday, Aug. 6.
Analysts expect the New York-based company to report quarterly earnings of 58 cents per share, up from 46 cents per share in the year-ago period. The consensus estimate for Datadog’s quarterly revenue is $1.08 billion. It reported $826.76 million last year, according to Benzinga Pro.
On June 30, Datadog announced it has acquired Adaptive ML.
Shares of Datadog fell 1.7% to close at $283.17 on Wednesday.
Benzinga readers can access the latest analyst ratings on the Analyst Stock Ratings page. Readers can sort by stock ticker, company name, analyst firm, rating change or other variables.
Let’s have a look at how Benzinga’s most-accurate analysts have rated the company in the recent period.
Considering buying DDOG stock? Here’s what analysts think:
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Datadog zvýšil výhled tržeb za celý rok 2026 na 3,225–3,245 miliardy USD po růstu RPO o 51 % na 3,48 miliardy USD. Delší víceleté smlouvy zlepšují viditelnost budoucích tržeb.
Key Takeaways Datadog's RPO jumped 51% to $3.48 billion as multi-year contracts and longer terms improved visibility.DDOG raised 2026 revenue guidance to $3.225-$3.245 billion, citing demand and execution confidence.Enterprise clients adopting 10-plus products, strong retention and AI deployments support recurring growth. Datadog (DDOG - Free Report) is making its revenue growth more predictable as momentum in multi-year customer agreements improves revenue visibility and reinforces the durability of its subscription-based business model. During the first quarter of 2026, the company reported a 51% year-over-year increase in remaining performance obligations (RPO) to $3.48 billion, with management attributing the growth partly to a higher mix of multi-year contracts and longer contract durations. This expanding backlog provides greater visibility into future revenues, strengthening the predictability of recurring subscription revenues while reducing reliance on short-term renewals.
Datadog continues to win large enterprise expansion deals, with several customers expanding their usage across 10 or more Datadog products. Higher multi-product adoption, coupled with gross retention in the mid-to-high 90% range and net revenue retention in the low 120% range in the first quarter of 2026, supports longer-term customer commitments, increases switching costs and strengthens recurring revenue growth. AI-driven deployments are further contributing to larger enterprise engagements, expanding the company's long-term revenue opportunity.
Reflecting this momentum, management raised its full-year 2026 revenue outlook to $3.225-$3.245 billion from $3.175-$3.195 billion, underscoring confidence in customer demand and execution. While longer-duration contracts enhance revenue visibility and improve growth predictability, Datadog's ability to sustain this momentum will depend on continued customer renewals, platform expansion and healthy enterprise IT spending.
How Do Datadog's Rivals Stack Up?Dynatrace (DT - Free Report) emphasizes large enterprise platform standardization over maximizing RPO, unlike Datadog's expanding multiyear contracts. Dynatrace wins bigger end-to-end observability deals, records $1 million-plus ACV contracts in the fourth quarter of fiscal 2026 and broader platform adoption through DPS subscriptions. Dynatrace focuses on durable ARR expansion, enterprise consolidation and long-term consumption while benefiting from strategic AI-driven platform commitments rather than emphasizing deferred revenue metrics.
Snowflake (SNOW - Free Report) competes more directly with Datadog through rising RPO and multiyear enterprise commitments. In the first quarter of fiscal 2027, Snowflake reported 38% RPO growth, a new five-year AWS agreement and increasing $10 million-plus customers, supporting long-term revenue visibility. While Datadog benefits from larger multiyear observability contracts, Snowflake leverages AI-driven data platform expansion and enterprise consumption, making the company a formidable long-duration subscription competitor.
DDOG’s Share Price Performance, Valuation & EstimatesShares of DDOG have surged 68.5% over the past year, outperforming the broader Zacks Computer and Technology sector's growth of 22.8%.
DDOG’s Price Performance
Image Source: Zacks Investment Research
From a valuation standpoint, DDOG appears overvalued, trading at a trailing 12-month price-to-sales ratio of 24.92X, above the industry’s 5.27X. DDOG has a Value Score of F.
DDOG’s Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate projects earnings of $2.41 per share for 2026 and $2.88 for 2027, reflecting year-over-year growth of 17.56% and 19.29%, respectively.
Image Source: Zacks Investment Research
Datadog stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Datadog zakončil 1. čtvrtletí 2026 s přibližně 4 550 zákazníky s ARR nad 100 000 USD, což je meziročně nárůst z 3 770. Tito velcí klienti tvoří téměř 90 % celkového ARR.
Key Takeaways Datadog ended Q1 2026 with about 4,550 customers generating more than $100,000 in ARR.56% of customers use four or more products, while 20% use eight or more, boosting lifetime value.More than 6,500 customers use AI integrations, representing roughly 80% of Datadog's ARR. Datadog’s (DDOG - Free Report) enterprise customer base is strengthening its long-term growth trajectory by driving higher recurring revenues and deeper platform adoption. The company ended the first quarter of 2026 with approximately 4,550 customers generating more than $100,000 in annual recurring revenues (ARR), up from 3,770 a year ago. These large customers now account for nearly 90% of total ARR, highlighting the growing contribution of enterprise clients to Datadog's business.
Management also noted several seven-figure and eight-figure customer wins across industries, with many organizations replacing multiple legacy monitoring tools and expanding deployments to 10-16 Datadog products. This trend is reflected in the company's strong cross-selling performance, as 56% of customers now use four or more products, while 20% use eight or more, supporting higher customer lifetime value and durable subscription revenues.
The rapid adoption of AI is creating another growth path, with more than 6,500 customers using one or more AI integrations, representing roughly 80% of ARR. Datadog further strengthened its enterprise proposition at DASH 2026 by introducing more than 100 new AI, observability and security capabilities, including expanded Bits AI functionality and Agent Observability, which should further deepen enterprise adoption and increase wallet share.
However, the company remains dependent on continued enterprise expansion and IT spending. A slowdown in customer spending, weaker macroeconomic conditions or intensifying competition could moderate ARR growth and limit future revenue expansion. Nevertheless, Datadog's expanding enterprise footprint, strong customer retention, continuous platform innovation and the Zacks Consensus Estimate for 26.62% revenue growth in 2026 indicate that its enterprise-led growth story remains firmly intact.
How Are Competitors Faring?Dynatrace (DT - Free Report) and Elastic (ESTC - Free Report) compete with Datadog in enterprise observability, where platform breadth, enterprise expansion and customer retention drive long-term growth.
Dynatrace challenges Datadog through unified AI-powered observability, deterministic AI and its DPS licensing model that drives broader adoption and consumption. The company reported a fourth-quarter fiscal 2026 NRR of 110%, with more than 75% of ARR on its DPS licensing model and strong cross-sell potential. Dynatrace targets enterprise consolidation, autonomous operations and cloud expansion, while Datadog currently outpaces it in enterprise customer growth and retention.
Elastic competes with Datadog by combining observability, security and AI on a unified platform emphasizing consolidation and context-aware AI. The company is expanding enterprise relationships through larger multiyear commitments, $1 million-plus deals and AI-driven observability. Elastic leverages search expertise and platform consolidation to win upsell opportunities, though Datadog maintains stronger enterprise expansion and higher retention metrics.
DDOG’s Share Price Performance, Valuation & EstimatesShares of DDOG have rallied 79.9% over the past six-month period, outperforming the Zacks Internet - Software industry’s decline of 4.8% and the Zacks broader Computer and Technology sector's growth of 12%.
DDOG’s Six-Month Price Performance
Image Source: Zacks Investment Research
From a valuation standpoint, DDOG stock is currently trading at a forward 12-month Price/Sales ratio of 18.16X compared with the industry’s 3.96X. DDOG has a Value Score of F.
DDOG’s Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for 2026 earnings is pegged at $2.41 per share, unchanged over the past 30 days and indicating a 17.56% year-over-year increase.
Image Source: Zacks Investment Research
Datadog stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Spoluzakladatel a CTO společnosti Datadog Alexis Le-Quoc prodal 43 224 akcií za zhruba 11,5 mil. USD v rámci plánu Rule 10b5-1. Po transakci mu zůstalo 509 974 akcií.
Alexis Le-Quoc, co-founder and Chief Technology Officer of Datadog, Inc. (DDOG -3.47%), sold 43,224 shares of Class A Common Stock on July 20, 2026, for a total value of ~$11.5 million, according to an SEC Form 4 filing.
Transaction summaryMetricValueTransaction value$11.5 millionShares sold (direct)43,224Post-transaction shares (total)509,974Post-transaction shares (directly held)509,805Post-transaction shares (indirectly held)169Post-transaction value$134.23 millionTransaction value based on SEC Form 4 weighted average sale price ($265.23); post-transaction value based on July 20, 2026 market close ($263.20).
Key questionsWhat triggered this specific liquidation of equity?
The transaction was part of a structured divestment process governed by a Rule 10b5-1 trading plan adopted on June 13, 2025. This plan facilitated the automatic exercise of 43,224 options and their immediate sale on the open market, providing the executive with liquidity while maintaining a substantial long-term stake in Datadog.How does the current holding compare to historical equity awards?
While the sale involved ~43,000 shares, Alexis Le-Quoc continues to hold a significant portfolio of company equity. This includes 509,805 shares held directly and approximately 8.4 million derivative securities, including vested and unvested awards, held both directly and through the Alexis Le-Quoc Revocable Trust.How has the stock performed relative to the transaction price?
The disposition occurred at a weighted average price of $265.23, while the one-year total return for the stock stood at 81% as of the July 20, 2026 transaction date. Since the trade, the share price settled at $254.79 as of the July 21, 2026 market close.What is the impact on total ownership concentration?
The transaction resulted in an 8% reduction in direct holdings, leaving the insider with a total beneficial interest of 509,974 shares of Class A Common Stock. This remaining position, excluding derivatives, represents an insider ownership percentage of 0.14% and a market valuation of approximately $130 million based on recent trading levels.Company OverviewMetricValueShare Price (as of market close 2026-07-21)$254.79Market Capitalization$87.1 billionRevenue (TTM)$3.7 billionNet Income (TTM)$135.7 millionCompany SnapshotDatadog provides a comprehensive cloud-based Software-as-a-Service (SaaS) platform that delivers infrastructure monitoring, application performance management, log management, and security surveillance capabilities to enterprise customers globally.The company operates on a subscription-based business model, generating recurring revenue from customers who rely on its integrated monitoring and analytics solutions to maintain real-time visibility across their technology infrastructure.Datadog serves developers, IT operations teams, and business stakeholders across North America and internationally, with particular strength in enterprises requiring end-to-end observability and security monitoring solutions.Datadog has established itself as a leading provider of cloud-based observability and security solutions, with a market capitalization of $87.1 billion. The company's integrated platform approach — combining infrastructure monitoring, application performance tracking, log management, and security surveillance — provides a competitive advantage by delivering comprehensive visibility across complex technology environments.
With 8,100 employees and a strong presence in North America and international markets, Datadog continues to benefit from secular trends in cloud adoption and the increasing complexity of distributed systems requiring sophisticated monitoring solutions.
What this transaction means for investorsThe July 20 sale of over 40,000 Datadog shares by its co-founder and CTO Alexis Le-Quoc seems like a substantial disposition. Yet take into account that he retained over 500,000 directly-held shares post-transaction, and another 6.1 million Class B shares held indirectly via the Alexis Le-Quoc Revocable Trust, which can be converted into Class A, and the sale actually represents a small percentage of his equity stake.
In addition, this was a non-discretionary transaction executed as part of a pre-established Rule 10b5-1 plan. Such plans allow insiders to sell shares at predetermined times to avoid concerns of trading on non-public information. Consequently, Le-Quoc’s disposition does not appear to be a cause for investor concern.
Datadog shares are up thanks to strong business performance. In the first quarter, revenue reached $1 billion, representing outstanding 32% growth from the previous year. The company forecasted 2026 full-year sales to rise to $4.3 billion, a significant increase from 2025’s $3.4 billion.
Datadog v 1. čtvrtletí zvýšil tržby o 32 % na 1,006 miliardy USD a poprvé překonal 1 miliardu USD za čtvrtletí. Výhled na celý rok 2026 počítá s tržbami 4,30–4,34 miliardy USD.
Key Takeaways Datadog topped $1 billion in quarterly revenues as first-quarter 2026 sales rose 32% year over year.DDOG unveiled 100 plus AI and security capabilities and acquired Adaptive ML to expand AI agents.Datadog forecasts 2026 revenues of $4.30-$4.34B despite margin, competition and macro risks. Datadog (DDOG - Free Report) shares have surged 88.7% year to date, comfortably outpacing the Zacks Computer and Technology sector's 14.8% growth and the Zacks Internet Software industry's 8% decline over the same stretch of trading.
The rally reflects growing investor confidence in Datadog's role as a core observability and security platform for enterprises navigating increasingly complex, AI-driven infrastructure. With first-quarter 2026 results confirming accelerating growth and management issuing upbeat forward guidance, the near-term setup still looks favorable for investors willing to ride out some volatility, even as rising costs and intensifying competition warrant a genuinely watchful eye.
DDOG Outperforms Sector, Peers YTD
Image Source: Zacks Investment Research
Catalysts Fuelling DDOG’s RallyDatadog's first-quarter 2026 results showed revenues climbing 32% year over year to $1,006 million, marking the company's first quarter above $1 billion and a sequential acceleration from 29% growth in the prior period. Customers with annual recurring revenues of $100,000 or more grew 21% year over year to about 4,550. Non-GAAP operating margin held at 22%, while free cash flow reached $289 million.
Momentum has continued into the current quarter. Last month, Datadog hosted its DASH 2026 conference, unveiling more than 100 new capabilities to help customers manage growing AI and security complexity, including expanded agentic tooling. On June 30, the company announced its acquisition of Adaptive ML, a startup building a Reinforcement Learning Operations platform, which will join Datadog AI Research to accelerate work on specialized AI agents trained on real-world observability signals. The company also achieved FedRAMP High certification during the quarter and launched GPU Monitoring to help customers better manage AI infrastructure spend.
Forward-Looking Guidance by DDOG Holds PromiseFor the second quarter of 2026, Datadog guided revenues between $1.07 billion and $1.08 billion, non-GAAP operating income to be $225-$235 million, and non-GAAP earnings per share between 57 cents and 59 cents.
The Zacks Consensus Estimate calls for 2026 revenues of $4.34 billion, up 26.62% year over year, with earnings pegged at $2.41 per share, up 17.56%, suggesting the current valuation gap is arguably well justified by Datadog's faster, AI-driven observability growth trajectory relative to the broader field.
For full-year 2026, management projected revenues between $4.30 billion and $4.34 billion, non-GAAP operating income to be $940-$980 million, and non-GAAP earnings per share between $2.36 and $2.44, underscoring continued confidence in sustained double-digit growth.
Headwinds Worth MonitoringDespite the strong trajectory, risks remain. GAAP operating margin was just 1% in the quarter, reflecting heavy stock-based compensation and continued R&D investment, including newly absorbed costs tied to the Adaptive ML deal. Continued reliance on large enterprise deals also introduces some lumpiness to quarterly bookings, and management has flagged macro uncertainty tied to trade policy and IT spending as ongoing watch items.
Valuation and Competitive LandscapeDatadog carries a Zacks Value Score of F, trading at a forward 12-month price-to-sales ratio of 19.2X, well above the industry median of 4.78X. That steep premium reflects Datadog's notably stronger growth profile relative to slower-growing peers, whose more modest multiples mirror decelerating or largely flat expansion.
DDOG’s P/S Valuation
Image Source: Zacks Investment Research
DDOG faces significant competition from the likes of International Business Machines (IBM - Free Report) , Cisco Systems (CSCO - Free Report) and Dynatrace Software (DT - Free Report) , among others. Cisco Systems has advanced 45.2%, while Dynatrace has gained 4.1% and International Business Machines has returned 3.4%, highlighting Datadog's clear outperformance against all three legacy and pure-play rivals alike.
Cisco Systems leans on its deep network-layer footprint and hardware relationships to push observability bundles into existing accounts, while Dynatrace differentiates through AI-driven causal analytics aimed squarely at large enterprise customers. International Business Machines folds observability into its broader hybrid-cloud and consulting stack, giving it reach but comparatively less focus. Datadog's unified platform keeps winning share, though Cisco Systems, Dynatrace, and International Business Machines each retain entrenched enterprise relationships that keep the observability and security market intensely contested heading into the second half of 2026.
ConclusionWith accelerating revenue growth, robust guidance and steady AI-driven innovation spanning GPU monitoring, agentic security tooling and the Adaptive ML acquisition, Datadog's growth story remains firmly intact. Despite thin GAAP margins and a crowded competitive field, the near-term outlook still tilts favorably enough for patient, growth-oriented investors to consider Datadog.
DDOG currently carries a Zacks Rank #2 (Buy) and a Growth Score of A, a favorable combination that offers a strong investment opportunity per the Zacks proprietary methodology. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Adaptive ML will join Datadog’s AI lab to build frontier AI infrastructure to address cutting-edge research challenges within observability and security June 30, 2026 16:05 ET | Source: Datadog, Inc.
NEW YORK, June 30, 2026 (GLOBE NEWSWIRE) -- Datadog, Inc. (NASDAQ: DDOG), the leading AI-powered observability and security platform, today announced it has acquired Adaptive ML, a frontier AI startup developing the world's first Reinforcement Learning Operations (RLOps) platform, enabling enterprises to build, own, and deploy their own specialized agents and models.
Adaptive ML will join Datadog AI Research, accelerating Datadog’s investment and research efforts around world models and agentic LLM post-training for observability. Datadog AI Research focuses on fundamental technical problems and collaborates with Datadog's product and engineering teams to translate research advances into products.
“We started Adaptive to give every enterprise the ability to perpetually improve its own AI. The missing piece was never the algorithm, the hardest part was production scale. With Datadog, and the continuous stream of real-world signals that only a platform operating at this unique reach can provide, we will work directly from the foundation that intelligent agents need to drive exponential productivity gains, reliably and consistently. With Datadog’s unmatched access to real-world infrastructure, we can accelerate towards continuous intelligence,” said Julien Launay, co-founder and CEO, Adaptive ML.
“Our lab is focused on leveraging our data and domain expertise to build specialized agents and models, and to effectively turn our data into first-party intelligence. As we continue to bolster our R&D efforts and better serve our customers, bringing Adaptive ML on board is a natural fit to enhance and augment the work we are already doing within our lab,” said Ameet Talwalkar, Datadog's Chief Scientist.
As AI continues to intensify the level of complexity software systems are facing on a daily basis, Datadog has invested over $1B in R&D annually — significantly contributing to the end-to-end observability and security solutions it has delivered to customers. Recently, that includes research initiatives like Toto 2.0, as well as products like Bits Investigation, Bits Code, and Bits Security Analyst, which have already conducted hundreds of thousands of investigations on behalf of customers.
About Datadog
Datadog is the leading observability and security platform for the AI era, providing businesses with unified visibility across the technology stack to manage complexity at scale. It brings applications, infrastructure, data, models, and security into one place, using AI to detect and resolve issues before they impact customers. Trusted globally by Fortune 500 companies and high-growth AI leaders, Datadog enables businesses to move faster with clarity and confidence.
Forward-Looking Statements
This press release may include certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended including statements on the benefits of new products and features. These forward-looking statements reflect our current views about our plans, intentions, expectations, strategies and prospects, which are based on the information currently available to us and on assumptions we have made. Actual results may differ materially from those described in the forward-looking statements and are subject to a variety of assumptions, uncertainties, risks and factors that are beyond our control, including those risks detailed under the caption “Risk Factors” and elsewhere in our Securities and Exchange Commission filings and reports, including the Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 7, 2026, as well as future filings and reports by us. Except as required by law, we undertake no duty or obligation to update any forward-looking statements contained in this release as a result of new information, future events, changes in expectations or otherwise.
