Choose Rich Live
Tech

Datadog shares tumble following third-quarter results and guidance

Datadog reported third-quarter revenue of $1.20 billion and adjusted earnings of $0.81 per share, topping analyst expectations, but its stock plunged over 17% in pre-market trading.

Datadog stock chart displaying a pre-market plunge to $179.75, down 18.49% from the previous close of $220.52.
Image: @StockSavvyShay

Datadog posted third-quarter 2026 revenue of $1.20 billion, representing a 35% increase year over year and surpassing consensus estimates ranging from $1.12 billion to $1.15 billion. The monitoring and analytics platform also delivered adjusted earnings of $0.81 per share, up 47% year over year and beating expectations of $0.64 to $0.65 per share. Non-GAAP operating income reached $334 million, well above a cited estimate of $268 million, while gross margin stood at 81% and operating cash flow came in at $290 million.[1][2][3]

Despite the headline beats, Datadog's third-quarter free cash flow of $251 million trailed an estimated $262 million cited by market analyst Shay Boloor. Customer accounts generating over $100,000 in annual recurring revenue grew 20% year over year, reported as approximately 4,860 accounts by Wall St Engine and 4,680 accounts by Boloor. Product announcements alongside the results included the release of Scout 1.0, which powers the company's Bits Investigation tool, as Datadog develops specialized models through its AI Research team to support autonomous operations.[1][2]

For the fourth quarter, Datadog projected revenue between $1.19 billion and $1.20 billion against estimates of roughly $1.20 billion, with adjusted EPS guided to $0.69 to $0.71. Full-year fiscal 2026 revenue guidance was set at $4.52 billion to $4.53 billion, alongside expected adjusted EPS of $2.73 to $2.75.[1][2]

Investors responded with aggressive selling. Datadog shares sank sharply in pre-market trading, sliding as much as 18.49% to $179.75 after closing the previous session at $220.52. Financial outlets MarketWatch and Barron's noted that the steep sell-off deepened as trading progressed, with Barron's characterizing the market's response as if the company had reported disastrous earnings.[2][3][4][5]

Key facts

  • Datadog reported Q3 2026 revenue of $1.20 billion (up 35% year over year) and adjusted EPS of $0.81 (up 47% year over year), beating consensus estimates.
  • Non-GAAP operating income was $334 million, topping the $268 million estimate, with an 81% gross margin and $290 million in operating cash flow.
  • Third-quarter free cash flow came in at $251 million, missing an analyst expectation of $262 million.
  • Customers with over $100,000 in ARR grew 20% year over year, with reported figures differing between 4,680 and roughly 4,860.
  • Datadog guided Q4 revenue to $1.19–$1.20 billion against a $1.20 billion estimate, and fiscal 2026 revenue to $4.52–$4.53 billion.
  • Datadog announced the launch of Scout 1.0, which powers Bits Investigation.
  • Datadog's stock fell between 17% and 18.5% in pre-market trading, touching $179.75 after closing at $220.52 the prior day.

Sources · 5 sources

  1. WS

    Wall St Engine@wallstenginePost on X ·

    DATADOG $DDOG Q3’26 EARNINGS HIGHLIGHTS 🔹 Revenue: $1.20B (Est. $1.15B) 🟢; +35% YoY 🔹 Adj. EPS: $0.81 (Est. $0.65) 🟢; +47% YoY 🔹 Non-GAAP Oper Income: $334M (Est. $268M) 🟢 FY26 Guide: 🔹 Revenue: $4.52B-$4.53B (Est. $4.48B) 🟢 🔹 Non-GAAP Oper Income: $1.10B-$1.11B (Est. $1.03B) 🟢 🔹 Adj. EPS: $2.73-$2.75 (Est. $2.55) 🟢 Q4 Guide: 🔹 Revenue: $1.19B-$1.20B (Est. $1.2B) 🟡 🔹 Non-GAAP Oper Income: $280M-$290M (Est. $279M) 🟢 🔹 Adj. EPS: $0.69-$0.71 (Est. $0.66) 🟢 Other Q3 Metrics: 🔹 $100k+ ARR Customers: about 4,860; +20% YoY 🔹 Gross Margin: 81% 🔹 Operating Cash Flow: $290M 🔹 Free Cash Flow: $251M Announcements: 🔹 Scout: 1.0 launched; powers Bits Investigation Comments: 🔸 “Datadog delivered a strong third quarter, with 35% year-over-year revenue growth, $290 million in operating cash flow, and $251 million in free cash flow.” 🔸 “We are innovating rapidly, including developing specialized AI models through our AI Research team, to help customers manage growing complexity and move towards autonomous operations.”

    Open source
  2. SB

    Shay Boloor@StockSavvyShayPost on X ·

    $DDOG Q3 EARNINGS • Revenue $1.20B vs Est. $1.12B • EPS $0.81 vs Est. $0.64 • FCF $251M vs Est. $262M • Customers with ARR >$100K: 4,680 (+20% YoY) Q4 Guidance • Revenue $1.19B vs. Est. $1.20B • EPS $0.70 vs Est. $0.64 https://t.co/pIw04DimT3

    Open source
  3. TR

    TrendSpider@TrendSpiderPost on X ·

    $DDOG Q3 EARNINGS... OUCH 🩸 Adj EPS: $0.81 vs $0.65 est ✅ Sales: $1.197B vs $1.146B est ✅ Raised FY2027 Adj EPS Guidance ✅ Raised FY2027 Sales Guidance ✅ 🟥 -17% in pre-market trading https://t.co/9Cq0PfvR4v

    Open source
  4. MA

    MarketWatch@MarketWatchPost on X ·

    Datadog’s stock extends steep declines in the wake of earnings https://t.co/JX95uljwLX

    Open source
  5. BA

    Barron's@barronsonlinePost on X ·

    Datadog stock falls as investors react as if the company reported disastrous earnings. https://t.co/fdT0l2MYNw

    Open source