Cloud observability and security provider Datadog (NASDAQ: DDOG) posted a stronger‑than‑expected third quarter and lifted its full‑year guidance, citing continued momentum with large customers and rapid product innovation in AI observability and security. The company reported revenue of $886 million (+28% YoY) and non‑GAAP EPS of $0.55, both above Street expectations. Premarket, shares rose roughly 7% on the news. 1
- Revenue: $886M (+28% YoY), ahead of consensus. Non‑GAAP EPS: $0.55. GAAP EPS: $0.10; GAAP net income: $33.9M. 1
- Cash generation:Operating cash flow $251M; free cash flow $214M. 1
- Customer scale: ~4,060 customers with $100K+ ARR (up ~16% YoY). 1
- Guidance raised:FY25 revenue $3.386–$3.390B;FY25 non‑GAAP EPS $2.00–$2.02. Q4 revenue $912–$916M; non‑GAAP EPS $0.54–$0.56. 1
- Market reaction: Shares traded higher premarket after the beat and raise. 2
By the numbers: Where Datadog beat
Datadog’s top‑line of $885.7M–$886M topped the consensus revenue estimate of roughly $852.8M; non‑GAAP EPS of $0.55 exceeded a consensus near $0.47, according to Refinitiv. The company also reported non‑GAAP operating income of $207M (23% margin). 3
GAAP profitability remained positive, with $33.9M in net income (GAAP EPS $0.10), while cash generation stayed robust: $251M operating cash flow and $214M free cash flow for the quarter. The balance sheet ended September 30 with $4.1B in cash and marketable securities. 4
Outlook: Raised across the board
Management raised full‑year 2025 guidance to $3.386–$3.390B in revenue (from prior levels earlier in the year) and $2.00–$2.02 in non‑GAAP EPS. For Q4, Datadog guided $912–$916M of revenue and $0.54–$0.56 in non‑GAAP EPS—both above typical Street expectations referenced by multiple data providers this morning. 1
What powered the quarter
Datadog highlighted continued traction with larger customers—$100K+ ARR customers climbed to ~4,060, up ~16% year over year. The company also crossed 1,000+ integrations on its unified platform and flagged rapid releases tied to AI, including AI Observability & Security, Bits AI Agents for SRE/Developers/Security, Datadog MCP Server, and a time‑series foundation model (“TOTO”) aimed at accelerating troubleshooting and automation. 1
Datadog further expanded support for Oracle Cloud Infrastructure (OCI)—adding GPU monitoring, cloud cost management, and Cloud SIEM—and noted progress toward higher‑level government compliance for its public‑sector offerings. 1
Street & market context (today)
News of the beat and raise pushed DDOG higher in early trading. Multiple outlets framed the report as a clear upside surprise, with particular emphasis on large‑customer growth and above‑consensus guidance for the December quarter. 2
How this compares to expectations heading into the print
Back on August 7, 2025, Datadog had already telegraphed an upbeat Q3 outlook versus consensus; today’s results landed ahead of those targets, reinforcing the demand backdrop for cloud observability and security tied to AI workloads. 5
Valuation check (for investors following DDOG)
Ahead of earnings, valuation remained a talking point: Simply Wall St noted Datadog’s P/S around 18× vs. ~5× for the software group, reflecting the premium embedded in shares following a ~123% three‑year run. Today’s beat/raise may keep that debate front and center. (This isn’t investment advice.) 6
What to watch next
- Q4 execution: Whether Datadog sustains double‑digit growth and margin expansion into year‑end under the raised outlook. 1
- AI product adoption: Uptake of AI observability/security and “Bits AI” agents and how they translate into multi‑product expansion with existing customers. 1
- Large‑customer adds: Continued growth in $100K+ ARR cohort as a signal of enterprise demand health. 1
Earnings call details (today)
The Q3 FY2025 earnings call is scheduled for 8:00 a.m. ET with a live webcast and replay available via Datadog’s investor relations site. 1
Sources (Nov. 6, 2025)
- Datadog press release: “Datadog Announces Third Quarter 2025 Financial Results.” Financials, guidance, product and customer metrics. 1
- Reuters/Refinitiv via TradingView: Consensus context and highlights of the beat and outlook. 3
- Associated Press (Times Union): GAAP results snapshot including net income and GAAP EPS. 4
- Seeking Alpha: Early market reaction; shares up ~7% premarket after beat/raise. 2
- Investing.com: Guidance comparisons versus consensus for Q4 and FY2025. 7
- Simply Wall St (Nov. 5, 2025): Valuation context and multi‑year stock performance. 6
Editor’s note: This article is for informational purposes and not investment advice.
