New York, February 10, 2026, 17:38 (ET) — After-hours
Datadog, Inc. (DDOG.O) shares were up $15.64, or 13.7%, at $129.67 in after-hours trading on Tuesday after the cloud-monitoring firm beat Wall Street estimates for quarterly revenue and profit. Revenue rose 29% to $953.2 million for the quarter ended Dec. 31, while adjusted earnings — which strip out certain costs such as stock-based pay — came in at 59 cents a share, above analysts’ 55-cent view. Datadog forecast first-quarter revenue of $951 million to $961 million, but its full-year revenue and profit outlook trailed expectations, even as the company pointed to broader use of its tools across its customer base. (Reuters)
The print matters because investors have been hunting for signs that cloud-software spending is holding up, not just in big AI labs but across regular enterprise budgets. Datadog’s model tracks what customers actually use, so demand can turn quickly — in either direction.
It also lands in a market that has punished pricey software names on any hint of slowing growth. A big beat can buy time, but guidance sets the mood for the next few sessions, and for the peer group.
In its earnings release, Datadog said it generated $327 million in operating cash flow and $291 million in free cash flow — cash left after spending on items such as equipment and capitalized software — in the quarter. Chief Executive Olivier Pomel said the company shipped “over 400 new features” in 2025 to help customers move to the cloud and “deploy to production with next-gen AI,” and it flagged an investor day in New York on Feb. 12. Datadog also said it ended 2025 with $4.47 billion in cash, cash equivalents and marketable securities and had 603 customers with at least $1 million in annual recurring revenue, a measure of subscription run-rate. (SEC)
Datadog sells “observability” software — tools that pull signals from applications and servers so engineers can spot outages and slowdowns before users do. More customers now want that same view for AI-heavy systems, which can be noisy, costly and hard to secure.
Competition is not polite. Datadog fights for budgets against observability rivals and security vendors, while cloud giants keep baking more monitoring into their platforms.
Billings — a metric tied to invoices that can hint at future revenue — rose 33% to about $1.2 billion, Investors Business Daily reported, as the company’s results helped lift sentiment in software stocks. The report also flagged competition from firms such as Dynatrace and Palo Alto Networks as the observability and security markets tighten up. (Investors)
Ahead of the report, RBC Capital cut its price target to $150 from $175 and kept an Outperform rating, citing “peer-multiple compression” as investors pushed down valuations across software. RBC analyst Matthew Hedberg wrote that conservative revenue and margin guidance “could weigh on shares but act as a clearing event,” and said the Feb. 12 analyst day should dig into Datadog’s AI positioning, security push and margins. (Investing)
Mizuho’s Gregg Moskowitz said Datadog is benefiting from a growing number of its AI customers reaching scale, and that “non-AI growth also accelerated” in the fourth quarter, Barron’s reported. He reiterated an Outperform rating and a $170 price target. (Barron’s)
But the upside case still runs into the guide. If cloud budgets tighten or customers trim usage to save money, Datadog’s consumption-based revenue can cool fast — and the stock tends to price that in quickly.
For Wednesday’s regular session, traders will watch whether the move holds once the first wave of earnings buyers is done. Volume, follow-through in other cloud names and any early read-throughs from the call could decide whether this was a one-day rip or something more durable.
The next hard catalyst is Thursday’s investor day in New York. Investors will press management for clearer signals on 2026 demand, the pace of AI-driven adoption, and whether the company can widen margins while it pushes more products into existing accounts.
