DDOG stock: Datadog Q3 revenue up 35% to $1.20 billion, forecast raised
By Neha KapoorEconomy Correspondent, Peepals Business
Representative image: computergottyt / Pixabay
Datadog reported Q3 2026 revenue of $1.20 billion on 4 November, up 35%, raised its full-year forecast and flagged lower usage by one large AI customer.
What Happened
Datadog, the US company whose software lets businesses watch the health of their cloud systems and applications, reported third-quarter 2026 revenue of $1.20 billion on Wednesday, 4 November 2026, up 35% from a year earlier, and raised its revenue forecast for the full year to between $4.515 billion and $4.525 billion. The quarter ended on 30 September. The company also said one large customer from the group it calls AI-native began reducing its usage during the quarter, and that it has built this decline into its outlook.
Key Facts
- Q3 2026 revenue: $1.20 billion, up 35% year on year, against the company's own earlier forecast of $1.135 billion to $1.145 billion.
- Net income: $118.32 million, more than three times the year-earlier figure; 32 cents a share, or 81 cents on the adjusted basis the company also reports.
- Customers paying $100,000 or more a year: about 4,860, up 20% from about 4,060 a year earlier.
- Full-year 2026 revenue forecast raised to $4.515 billion to $4.525 billion, from $4.45 billion to $4.47 billion in August.
- Q4 2026 revenue forecast: $1.19 billion to $1.20 billion.
- New product: Scout, the company's first specialised AI model for investigating problems in live systems, now in preview inside its Bits Investigation tool.
Why It Matters
Datadog sells "observability" software: tools that collect logs, performance data and alerts from a company's servers, cloud accounts and apps, so engineers can see when something breaks and why. Because its bills rise with the amount of data and systems customers monitor, its results give one view of how much enterprises are spending to run digital services in the cloud.
The quarter suggests that spending is still growing. The number of large customers, those paying at least $100,000 a year, rose by about 800, and revenue came in above the range the company itself had set three months earlier. Chief executive Olivier Pomel linked the results to customers expanding their digital operations and their use of AI, and said the company is building specialised AI models to help customers manage more complex systems and move towards what it calls autonomous operations, where software investigates and fixes faults with less human effort.
There is a caution in the same report. The company disclosed that one large AI-native customer, a business built around AI products, started using less of its service in the quarter. When a few fast-growing AI firms make up a large slice of new spending, a cut by one of them can shift a supplier's growth, which is why the company has priced the decline into its forecast. Its fourth-quarter range of $1.19 billion to $1.20 billion is roughly level with the third quarter's revenue.
Peepals calculation: revenue of $1.20 billion was about 5% above the midpoint of the company's own forecast of $1.135 billion to $1.145 billion ($1.20 billion ÷ $1.14 billion ≈ 1.05). The full-year forecast midpoint moved from $4.46 billion to $4.52 billion, an increase of about $60 million or 1.3% ($4.52 ÷ $4.46 ≈ 1.013). The fourth-quarter midpoint of $1.195 billion is about $5 million below the third quarter's $1.20 billion. Our calculation from the reported figures.
| Measure | Earlier figure | Latest figure |
|---|---|---|
| Q3 2026 revenue | $1.135-1.145 billion (forecast) | $1.20 billion (actual) |
| Full-year 2026 revenue forecast | $4.45-4.47 billion | $4.515-4.525 billion |
| Customers paying $100,000+ a year | about 4,060 | about 4,860 |
Impact
Short-term: the raised forecast points to continued growth in enterprise cloud and monitoring spending for the rest of 2026, while the flat fourth-quarter range reflects the reduced usage by one large AI customer.
Long-term: Datadog is betting that AI models which investigate faults automatically will become part of how companies run their systems; Scout is its first specialised model for that work.
Who is affected: companies that run applications in the cloud and pay for monitoring tools, the engineering teams who use them, and investors in software companies tied to AI spending.
What to watch next: Datadog's fourth-quarter results, against its forecast of $1.19 billion to $1.20 billion in revenue.
Key Takeaway
Datadog's third-quarter revenue rose 35% to $1.20 billion and it raised its 2026 forecast, but it warned that one large AI-native customer has begun using less of its service.
Questions and Answers
What were Datadog's Q3 2026 results?
Datadog reported revenue of $1.20 billion for the quarter ended 30 September 2026, up 35% from a year earlier, and net income of $118.32 million.
Did Datadog raise its guidance?
Yes. It raised its full-year 2026 revenue forecast to $4.515 billion to $4.525 billion, from $4.45 billion to $4.47 billion, and forecast fourth-quarter revenue of $1.19 billion to $1.20 billion.
What does Datadog do?
It sells cloud-based observability software that gathers logs, metrics and alerts from a company's servers and applications, so engineers can spot and fix problems quickly.
What risk did Datadog flag?
The company said one large AI-native customer began reducing its usage in the third quarter, and that it has included that decline in its outlook.
Disclaimer: Prepared by the Peepals newsroom from publicly available sources with AI assistance. Information is accurate to the best of our knowledge at the time of publication and may change. Images may be representative. Not professional advice. Report an error via our contact page.
By Neha Kapoor, Economy CorrespondentCovers Economy and more for Peepals Business. All stories by Neha Kapoor
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Neha Kapoor is a pen name of the Peepals Global Editorial Team, which researches, fact-checks and publishes every story. The portrait is an illustration.
