Datadog (NASDAQ:DDOG) Posts Earnings Results, Beats Expectations By $0.10 EPS

Key Points

• Datadog beat Q1 expectations with $0.60 EPS vs. $0.50 est. and revenue of roughly $1.01B (+32% YoY), reporting ARR above $4B and free cash flow of $289M, and raising FY‑2026 EPS guidance to $2.36–$2.44 and Q2 EPS to $0.57–$0.59.
• Management highlighted significant AI momentum—new GA/preview launches, ~6,500 customers using AI integrations that represent ~80% of ARR, and large hyperscaler AI deals—while non‑AI revenue growth and product attach also accelerated, with ~4,550 customers ≥$100k ARR.
• Shares jumped sharply (trading up to $188.73 on heavy volume) after the print, but the stock sports a very rich valuation (P/E > 600) and recent insider selling, posing potential downside risk despite the positive catalysts.

Datadog (NASDAQ:DDOG - Get Free Report) issued its earnings results on Thursday. The company reported $0.60 EPS for the quarter, topping the consensus estimate of $0.50 by $0.10, Briefing.com reports. The company had revenue of $1.01 billion during the quarter, compared to the consensus estimate of $960.12 million. Datadog had a return on equity of 4.14% and a net margin of 3.14%.The firm's revenue for the quarter was up 32.1% compared to the same quarter last year. During the same period in the previous year, the company posted $0.46 EPS. Datadog updated its FY 2026 guidance to 2.360-2.440 EPS and its Q2 2026 guidance to 0.570-0.590 EPS.

Here are the key takeaways from Datadog's conference call:

• Datadog reported quarterly revenue above $1 billion (≈$1.01B), up 32% year-over-year, with total ARR exceeding $4 billion, free cash flow of $289M (29% margin), and customers rising to ~33,200.
• The company highlighted strong AI momentum—GA/preview launches (MCP Server, Bits AI Security Analyst, Bits Assistant, GPU Monitoring), ~6,500 customers using AI integrations that represent ~80% of ARR, and new 7-figure/8-figure deals with two hyperscaler AI research labs.
• Platform adoption broadened outside AI: non-AI customer revenue accelerated to mid-20s% YoY and product attach rose (56% of customers use 4+ products, 35% use 6+), while 4,550 customers now have ARR ≥ $100k (≈90% of ARR).
• Guidance for Q2 is $1.07B–$1.08B (29%–31% YoY) and FY2026 revenue is $4.30B–$4.34B (25%–27% YoY), though management noted it applied extra conservatism to projections for its largest customer.
• Datadog is expanding into regulated/public-sector and sovereign-data markets—receiving FedRAMP High, planning a U.K. data center, and promoting Bring-Your-Own-Cloud (CloudPrem) options to win larger, compliance-sensitive workloads.

Datadog Price Performance

Shares of DDOG traded up $45.02 during trading hours on Thursday, reaching $188.73. The stock had a trading volume of 25,943,463 shares, compared to its average volume of 5,272,230. Datadog has a 12 month low of $98.01 and a 12 month high of $201.69. The stock has a market capitalization of $66.54 billion, a PE ratio of 608.81, a PEG ratio of 52.02 and a beta of 1.30. The company has a debt-to-equity ratio of 0.26, a quick ratio of 3.38 and a current ratio of 3.38. The company's 50-day moving average is $124.41 and its two-hundred day moving average is $136.98.

Insiders Place Their Bets

In other news, CEO Olivier Pomel sold 68,922 shares of the stock in a transaction on Monday, March 2nd. The stock was sold at an average price of $110.54, for a total value of $7,618,637.88. Following the completion of the transaction, the chief executive officer directly owned 704,821 shares in the company, valued at approximately $77,910,913.34. This represents a 8.91% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through this hyperlink. Also, CTO Alexis Le-Quoc sold 53,912 shares of the stock in a transaction on Tuesday, March 10th. The shares were sold at an average price of $125.49, for a total value of $6,765,416.88. Following the completion of the transaction, the chief technology officer owned 437,257 shares of the company's stock, valued at $54,871,380.93. The trade was a 10.98% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders sold a total of 654,018 shares of company stock valued at $80,903,197 over the last quarter. 6.67% of the stock is owned by corporate insiders.

Institutional Inflows and Outflows

Several large investors have recently bought and sold shares of DDOG. State Street Corp raised its position in Datadog by 106.8% during the 3rd quarter. State Street Corp now owns 13,732,777 shares of the company's stock worth $1,955,547,000 after purchasing an additional 7,091,075 shares during the last quarter. Invesco Ltd. raised its position in Datadog by 119.2% during the 3rd quarter. Invesco Ltd. now owns 4,075,721 shares of the company's stock worth $580,383,000 after purchasing an additional 2,216,402 shares during the last quarter. Amundi raised its position in Datadog by 70.9% during the 4th quarter. Amundi now owns 2,359,682 shares of the company's stock worth $320,893,000 after purchasing an additional 979,295 shares during the last quarter. Price T Rowe Associates Inc. MD raised its position in Datadog by 7.1% during the 4th 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 during the last quarter. Finally, AQR Capital Management LLC raised its position in Datadog by 99.8% during the 2nd quarter. AQR Capital Management LLC now owns 1,847,722 shares of the company's stock worth $247,983,000 after purchasing an additional 923,038 shares during the last quarter. 78.29% of the stock is owned by institutional investors.

Analyst Upgrades and Downgrades

A number of research firms recently weighed in on DDOG. Rosenblatt Securities decreased their target price on Datadog from $185.00 to $178.00 and set a "buy" rating on the stock in a report on Friday, May 1st. Needham & Company LLC decreased their target price on Datadog from $220.00 to $155.00 and set a "buy" rating on the stock in a report on Tuesday, February 10th. Rothschild & Co Redburn began coverage on Datadog in a report on Thursday, April 23rd. They set a "buy" rating and a $170.00 target price on the stock. BTIG Research boosted their target price on Datadog from $170.00 to $212.00 and gave the stock a "buy" rating in a report on Thursday. Finally, Bank of America decreased their target price on Datadog from $215.00 to $170.00 and set a "buy" rating on the stock in a report on Wednesday, April 22nd. One equities research analyst has rated the stock with a Strong Buy rating, thirty-eight have given a Buy rating, two have given a Hold rating and two have assigned a Sell rating to the stock. Based on data from MarketBeat, the company has an average rating of "Moderate Buy" and an average price target of $186.41.

Key Stories Impacting Datadog

Here are the key news stories impacting Datadog this week:

• Positive Sentiment: Management raised Q2 and FY‑2026 guidance well above consensus (Q2 EPS $0.57–$0.59; FY EPS $2.36–$2.44), the primary catalyst behind today’s rally. Datadog raises annual forecast
• Positive Sentiment: Strong Q1 print: revenue ≈ $1.01B (+32% YoY), EPS beat, $335M operating cash flow and $289M free cash flow; expansion in $100k+ ARR customers and several product launches support durable growth. Q1 2026 Results
• Positive Sentiment: Datadog for Government achieved FedRAMP High certification, removing a major compliance hurdle for federal deals and opening a new addressable market in high‑security public sector customers. FedRAMP High Certification
• Positive Sentiment: Sell‑side support accelerated post‑print — multiple firms raised price targets and/or ratings (examples: Wedbush, BTIG, Citizens JMP), adding momentum to the move. Wedbush/analyst notes
• Neutral Sentiment: Unusual options flow and heavy call buying increased intraday volatility and trading volume — this likely magnified price moves but may reflect short‑term trader positioning more than fundamentals. Options trade note
• Neutral Sentiment: High trading volume and media coverage can sustain momentum short term; monitor bookings/large‑customer commentary in upcoming updates for confirmation.
• Negative Sentiment: Several insiders (CTO, GC, CRO and a director) sold shares under pre‑arranged 10b5‑1 plans in recent days; while planned, these transactions may concern some investors taking profits after the rally. SEC Form 4
• Negative Sentiment: Valuation is very rich (very high P/E), so even with improving fundamentals the stock may be vulnerable to profit‑taking or a pullback if growth expectations slip.

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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