New York, Feb 10, 2026, 07:18 EST — Premarket
- Datadog beat fourth-quarter expectations, reporting revenue of $953 million—a 29% jump.
- First-quarter revenue guidance topped forecasts, though the profit outlook was softer.
- Attention is shifting to the 8 a.m. call and Thursday’s investor day as investors look for specifics on 2026 demand and profit margins.
Datadog shares moved up in premarket trading Tuesday, as the cloud monitoring firm topped Wall Street’s fourth-quarter profit and revenue forecasts. The company’s new 2026 outlook came in with a mix: management sees stronger sales growth, but earnings projections look more cautious.
This setup is key; Datadog often serves as a lens for cloud spending trends, particularly with firms balancing tight IT budgets and fresh initiatives. Software stocks? Lately, it’s guidance that’s shifting them, not what just closed out last quarter.
Timing’s another piece here. Datadog drops numbers premarket, then has its in-person investor day coming up this week—so traders get two cracks at the core question: is demand truly steadying, or just wobbling around.
Datadog finished Monday at $114.01, gaining 2.08%.
Fourth-quarter revenue climbed 29% to $953 million, the company reported, with non-GAAP net income per diluted share coming in at $0.59. Free cash flow? $291 million. By the end of 2025, the company counted 603 customers each generating $1 million or more in annual recurring revenue—based on subscription revenue run rates. For the first quarter, management projected revenue between $951 million and $961 million, with full-year guidance set at $4.06 billion to $4.10 billion. CEO Olivier Pomel tallied “over 400 new features and capabilities” released in 2025 and called out further “AI-powered innovation” expected in 2026. GlobeNewswire
The profit outlook tripped things up first. Datadog’s first-quarter adjusted EPS forecast landed below estimates, despite the company’s revenue projection topping the Street, Investing.com reported. The full-year revenue guidance ended up just shy of consensus, and the projected EPS range missed by an even bigger gap, per the same source.
Before the report, RBC Capital’s Matthew Hedberg trimmed his price target to $150 from $175 but stuck with his Outperform call. He flagged the risk of a “conservative revenue/margin guide” potentially pressuring shares—even if it ends up “act[ing] as a clearing event,” per TheFly’s note on TipRanks. TipRanks
Datadog makes software for tracking the health and performance of cloud apps and infrastructure—industry types call it “observability”—and has also moved into security. That puts it up against Dynatrace, plus bigger platform vendors that fold monitoring into broader cloud deals.
Bulls face a real risk if margin pressure sticks around longer than investors can stomach. A weaker earnings outlook often points to rising costs, whether that’s beefed-up hiring or heavier spending on product development. Sometimes it just means companies have to shell out more to clinch deals, particularly as customers resist price hikes and start trimming their list of suppliers.
According to a separate filing, Datadog’s Chief Revenue Officer Sean Michael Walters picked up 121,178 Class A shares after earning performance-based restricted stock units; the shares vest as long as Walters stays with the company.
Datadog’s next set of events arrives soon. The company will report earnings with a conference call at 8:00 a.m. Eastern, then heads to New York for its investor day on Thursday, Feb. 12.
