Datadog stock enters next phase after strong third quarter

Datadog delivered another strong quarter on November 4, with revenue rising 35% year over year to 1.20 billion US dollars for the three months ended September 30, 2026. The company also introduced Scout 1.0, a specialized model designed to investigate production issues and now used by Bits Investigation in preview.

The figures come from Datadog's investor relations release, published on November 4. Chief Executive Olivier Pomel said adoption was strong across the platform as customers expanded their digital operations and use of artificial intelligence.

Customer expansion supports growth

Datadog ended the quarter with about 4,860 customers generating at least 100,000 US dollars in annual recurring revenue, up from about 4,060 a year earlier. That customer group grew 20% year over year, giving the company a larger base of substantial accounts as it broadens its observability and security platform.

GAAP operating income reached 75 million US dollars, compared with a loss of 5.8 million US dollars in the year-earlier quarter. The GAAP operating margin was 6%. On a non-GAAP basis, operating income was 334 million US dollars and the operating margin was 28%. Non-GAAP net income per diluted share was 0.81 US dollars, while GAAP diluted earnings per share were 0.32 US dollars.

AI products raise the strategic stakes

Scout 1.0 is Datadog AI Research's first specialized model for production investigations. The company said the model achieves frontier-model performance at a fraction of the inference cost, which could allow more frequent investigations and faster incident response. The product remains in preview, so its contribution to revenue and margins is still developing.

Datadog stock traded at 165.20 euros on Lang & Schwarz at 13:45 CET on Wednesday, November 11, 2026. The quote reflects the European trading venue and is not used here to infer a broader market reaction to the earnings release.

Guidance reflects a measured outlook

Datadog expects fourth-quarter revenue of 1.19 billion to 1.20 billion US dollars, non-GAAP operating income of 280 million to 290 million US dollars and non-GAAP diluted earnings per share of 0.69 to 0.71 US dollars. For the full year, management forecasts revenue of 4.515 billion to 4.525 billion US dollars and non-GAAP operating income of 1.095 billion to 1.105 billion US dollars.

The outlook leaves investors focused on customer expansion, adoption of AI products and the conversion of strong revenue growth into operating profit. Datadog reported 290 million US dollars in operating cash flow and 251 million US dollars in free cash flow for the quarter, although the company notes that non-GAAP measures exclude items including stock-based compensation.

The broader US market is tracked on the S&P 500.

More news and analyses on Datadog stock.