Datadog Earnings Beat, Q4 Outlook Implies Flat Growth
Datadog earnings on Nov. 4, 2026 beat Q3 estimates but Q4 revenue guidance implied roughly flat sequential growth, heightening near-term sensitivity.
KEY TAKEAWAYS
- Beat Q3 estimates with $1.2 billion revenue, up 35% year-over-year.
- Non-GAAP diluted EPS was $0.81, above a $0.64 consensus.
- Q4 guidance of $1.2 billion implies roughly flat sequential revenue.
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Datadog Inc. (DDOG) reported stronger-than-expected third-quarter earnings on Nov. 4, 2026, but its fourth-quarter revenue guidance suggested roughly flat sequential growth. Management cited seasonality and planned marketing investments while reaffirming full-year targets.
Third-Quarter Results and Profitability
For the quarter ended Sept. 30, 2026, Datadog reported revenue of $1.20 billion, a 35% increase from about $885.7 million a year earlier, surpassing the consensus estimate near $1.14 billion. Non-GAAP diluted earnings per share (EPS) rose to $0.81 from $0.55, exceeding the roughly $0.64 consensus.
The company posted GAAP operating income of $74.7 million, reversing a $5.8 million operating loss in the prior-year quarter, with a GAAP operating margin near 6%. GAAP net income reached $118.3 million, or $0.32 per diluted share, compared with $33.9 million a year earlier.
On an adjusted basis, non-GAAP operating income totaled $334 million, lifting the non-GAAP operating margin to about 28% from 23% a year earlier. Operating cash flow was $290 million, and free cash flow was $251 million. Datadog held $5.2 billion in cash, cash equivalents, and marketable securities as of Sept. 30.
Approximately 4,860 customers generated at least $100,000 in annual recurring revenue, up from about 4,060 a year earlier. The company also launched Scout 1.0, its first specialized model, to power Bits Investigation.
Fourth-Quarter Guidance and Outlook
Datadog projected fourth-quarter revenue between $1.19 billion and $1.20 billion, implying 25% to 26% year-over-year growth but roughly flat to slightly lower sequential revenue compared with the third quarter. Management guided non-GAAP operating income to $280 million–$290 million, implying a 24% operating margin, and non-GAAP diluted EPS of $0.69 to $0.71, based on about 379 million weighted-average diluted shares.
The company maintained full-year 2026 revenue guidance of $4.515 billion to $4.525 billion, about 32% growth, and non-GAAP diluted EPS guidance of $2.73 to $2.75, based on roughly 375 million weighted-average diluted shares. Full-year non-GAAP operating income guidance implied a 24% margin.
Management said the fourth-quarter guidance assumes the largest customer contributes only its minimum contractual commitment. Excluding that customer, implied revenue growth would be in the low- to mid-30% range. The outlook also factors in planned large marketing investments, including spending tied to AWS re:Invent, and typical late-December seasonality. Guidance reflects recent trends with a conservative approach to growth assumptions.
Datadog filed a Form 8-K with the SEC on Nov. 4, 2026, reporting these results and guidance. The filing did not disclose any merger, acquisition, regulatory investigation, consent order, or other material approval conditions.
