Datadog shares rally premarket as earnings and guidance beat expectations

Investing.com -- Datadog, Inc. (NASDAQ: DDOG) reported third quarter results that exceeded analyst expectations, driving shares up 7.6% premarket as the cloud monitoring company delivered strong revenue growth and raised its outlook for the remainder of the year.

The company posted adjusted earnings per share of $0.55, significantly beating the analyst estimate of $0.46. Revenue reached $885.7 million, surpassing the consensus estimate of $852.3 million and representing a 28% increase YoY.

For Q4, the company expects revenue between $912 million and $916 million, above the consensus of $886.4 million, and adjusted EPS of $0.54-$0.56, higher than analysts’ expectations of $0.45. Full-year revenue is projected at $3.386-$3.390 billion and adjusted EPS of $2.00-$2.02, both exceeding consensus estimates.

"Datadog had a strong third quarter, with 28% year-over-year revenue growth, $251 million in operating cash flow, and $214 million in free cash flow," said Olivier Pomel, co-founder and CEO of Datadog. "The Datadog R&D team is innovating rapidly to help our customers solve problems in the AI space."

The company reported continued growth in its customer base, with approximately 4,060 customers generating annual recurring revenue of $100,000 or more, up 16% from 3,490 in the same period last year. Datadog also reached a milestone of over 1,000 integrations on its unified platform.

Operating cash flow for the quarter was $251 million, with free cash flow of $214 million. The company maintained a strong balance sheet with $4.1 billion in cash, cash equivalents, and marketable securities as of September 30, 2025.

Datadog’s non-GAAP operating income was $207 million for the quarter, representing a non-GAAP operating margin of 23%.

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