New York, Feb 11, 2026, 05:13 EST — Premarket session ongoing.
- Datadog shares edged up in premarket trading following a 13.7% surge in the previous session.
- The company released its fourth-quarter results and provided revenue and profit forecasts for 2026.
- Investors are zeroing in on Thursday’s investor day, eager for specifics on AI-driven products, growth prospects, and margin outlooks.
Datadog, Inc. (DDOG) shares rose roughly 0.6% to $130.50 in early trading Wednesday, following a close of $129.67 on Tuesday.
The report is significant since the stock was recently caught up in the volatile swings hitting software names linked to AI spending, where even minor outlook shifts can quickly change investor sentiment.
This comes just days ahead of Datadog’s investor day, where the company is set to clarify product momentum and outline its expectations for “normal” growth in 2026.
Datadog exceeded Wall Street’s fourth-quarter forecasts, driven by strong demand for its monitoring and security tools as companies ramp up AI workloads and migrate more systems to the cloud. Revenue jumped 29% to $953.2 million. Adjusted earnings came in at 59 cents per share, beating the 55-cent consensus, according to LSEG data.
The outlook sparked mixed responses. Datadog forecasted full-year revenue between $4.06 billion and $4.10 billion, with adjusted earnings of $2.08 to $2.16 per share—both falling short of analyst estimates reported by Reuters.
CEO Olivier Pomel revealed the company generated $1.05 billion in operating cash flow and $915 million in free cash flow for fiscal 2025. He highlighted the launch of “over 400 new features” last year as clients shifted to the cloud and started deploying next-gen AI in production. Globenewswire
Datadog also reported closing 2025 with 603 customers each bringing in $1 million or more in ARR, or annual recurring revenue. The company highlighted new products like its Bits AI SRE on-call agent. Additionally, Datadog plans to hold an investor day in New York City on Thursday, from 1 p.m. to 5 p.m. ET.
Datadog filed a Form 8-K on Tuesday, attaching a press release with its latest results as an exhibit. The document was signed by CFO David Obstler.
Despite lowering its full-year profit forecast, some analysts remain optimistic. Rosenblatt stuck with a Buy rating and set a $185 price target, describing the company’s revenue growth outlook as “somewhat conservative,” according to Investing.com. Investing
Datadog frequently gets lumped in with other observability firms like Dynatrace, as well as larger cloud software companies, whenever investors shift their focus on growth stocks.
Traders should note the disconnect between near-term gains and a cautious outlook for the full year. “Adjusted” results, or non-GAAP figures, exclude things like stock-based compensation. Datadog’s guidance indicates they’re still controlling costs, just not as sharply as some optimistic investors expected.
The risk here is clear: if IT budgets shrink or AI-powered usage becomes standard, consumption-based software growth could stall rapidly, wiping out the stock’s recent post-earnings surge just as fast. What seems like cautious guidance now might actually be a red flag.
Thursday’s investor day is next on the calendar. Investors will be closely watching for any changes in 2026 growth forecasts, fresh details on the AI and security product roadmap, and whether management sets new long-term margin or free cash flow goals.
