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Datadog remains a standout software stock, outperforming peers and benefiting from the AI-driven infrastructure boom. DDOG's usage-based pricing, especially through expanded AI credits and the Bits AI platform, drives robust net revenue retention above 120%. Despite strong Q2 results and raised revenue guidance, DDOG shares have dipped over 10%, creating a tactical buying opportunity.
Every so often, the market serves up a reaction so at odds with the underlying news that it's worth asking what investors are really thinking. Datadog Inc. NASDAQ: DDOG delivered one such moment this week, when the observability software company followed up an excellent quarter with a 19% drop in its share price.
DDOG tops Q2 earnings and revenue guidance as sales rise 36%, customer expansion continues, and full-year outlook reflects a major customer's lower usage.
Datadog posted 36% revenue growth as AI and non-AI demand accelerated, while guidance was derisked for lower usage at its largest customer.
Although the revenue and EPS for Datadog (DDOG) give a sense of how its business performed in the quarter ended June 2026, it might be worth considering how some key metrics compare with Wall Street estimates and the year-ago numbers.
Datadog, Inc. (DDOG) Q2 2026 Earnings Call Transcript
Datadog Inc (NASDAQ:DDOG) shares tumbled more than 18% on Thursday even after the software company delivered what analysts called a high-quality quarter, as investors focused on decelerating bookings growth and softer-than-expected third-quarter guidance. Datadog's revenue grew 35.6% year-over-year in the second quarter, ahead of the company's 29-31% guidance range and accelerating from 32% growth in the first quarter.
Datadog NASDAQ: DDOG reported second-quarter revenue of $1.12 billion, up 36% from a year earlier and above the high end of its guidance range, as growth accelerated across both AI-focused and non-AI customers.
Datadog (DDOG) came out with quarterly earnings of $0.65 per share, beating the Zacks Consensus Estimate of $0.58 per share. This compares to earnings of $0.46 per share a year ago.
Three enterprise software names are moving in opposite directions Thursday morning after earnings results.
Datadog shares DDOG dropped nearly 18% at market open on Thursday despite the cloud monitoring and analytics company reporting better-than-expected second-quarter earnings and raising its full-year financial outlook. The sharp decline came after the stock had reached a record closing high earlier this week, with analysts pointing to profit-taking and elevated investor expectations for 2H revenue as key reasons behind the selloff.