$DDOG · Datadog, Inc.
Datadog reported Q3 FY2026 results on November 4, 2026: revenue of $1.197B (up 35% YoY from $885.7M), GAAP net income of $118.3M ($0.32 diluted EPS), and non-GAAP EPS of $0.81. GAAP operating income was $74.7M (6% margin) versus a $5.8M loss a year ago; non-GAAP operating income was $334M (28% margin). Operating cash flow was $290M with $251M free cash flow, and cash/marketable securities totaled $5.2B. Q4 guidance calls for revenue of $1.19B–$1.20B and non-GAAP EPS of $0.69–$0.71.
- Revenue rose 35% YoY to $1.197B, up from $885.7M in Q3 2025.
- Non-GAAP EPS was $0.81 versus GAAP diluted EPS of $0.32.
- GAAP operating income swung to $74.7M from a $5.8M loss a year earlier.
- $100k+ ARR customers grew 20% YoY to about 4,860.
- Q4 revenue guidance of $1.19B–$1.20B implies roughly flat sequential growth.
Extended-hours last trade of $178.33 is down 19.13% versus the $220.52 regular close, signaling investors balked at the flat Q4 revenue guide despite a Q3 beat.
A 35% growth quarter met with a ~19% after-hours drop shows the market is punishing decelerating forward guidance, not the reported results.
The sharp selloff despite 35% growth reflects elevated valuation sensitivity among high-multiple observability/AI software peers to any deceleration signal.
Guidance implies a sharp sequential growth slowdown, and the company flags dependence on existing customers expanding and renewing subscriptions as a key risk.