Datadog’s stock extends steep declines in the wake of earnings

Datadog’s stock extends steep declines in the wake of earnings Datadog’s stock extends steep declines in the wake of earnings Datadog failed to top expectations with its revenue forecast Datadog investors are looking past a revenue beat for the latest quarter. tting hit hard early Wednesday in light of a ho-hum financial forecast from the maker of observability software. outlook for $1.19 billion to $1.2 billion in fourth-quarter revenue was “just in line” with what analysts were expecting. At the high end, it also implies growth of just $3 million from the $1.197 billion total recorded in the third quarter. That revenue figure for the third quarter amounted to 35% growth from a year before, “well above” the high end of the company’s forecast, according to Sherman.

Shares of Datadog were off more than 17% in premarket action. They had already fallen 21% in the five days leading up to this report. Don’t Short Yourself offers weekly money tips to help you earn it, stack it and grow it.

I agree to the Terms of Use, Privacy Notice and Cookie Notice. I would like to receive updates and special offers from Dow Jones and affiliates. I can unsubscribe at any time.

Datadog disclosed 4,860 customers with annual recurring revenue of $100,000 or more, which translates to 140 more than it had in the second quarter. But Sherman noted that the company had added 170 of these customers from the first quarter to the second quarter. On the earnings call, he’ll be looking for commentary on the growth of Datadog’s core business and whether large customers are scaling back their usage, Sherman said.

Datadog is particularly viewed by analysts as levered to growth of Amazon’s AWS cloud-computing business. The two companies have a partnership “to help organizations running on AWS monitor, optimize and secure their cloud environments,” according to a press release announcing a collaboration late last year. In a note to clients earlier this month, FBN Securities analyst Shebly Seyrafi noted the unique and mixed relationships between Datadog and the major cloud companies.

The biggest three cloud providers “are unlike any competitor” to Datadog because they simultaneously “compete with Datadog, sell it, buy it and host it,” Seyrafi wrote. The companies have their own built-in observability offerings, he noted, but they also resell Datadog’s software in their marketplaces. Copyright ©2026 MarketWatch, Inc.