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Datadog Surges on Q3 Beat and Higher Outlook as AI Offerings Lift Demand

Management highlighted accelerating large-customer adoption from recent AI observability launches.

Overview

  • Third-quarter revenue reached $885.7 million, up 28% year over year, with adjusted EPS of $0.55, beating estimates.
  • Billings rose 30% to $893 million, exceeding forecasts and signaling continued momentum.
  • Guidance for Q4 revenue came in at $912–$916 million versus Street expectations around $887–$889 million.
  • Full-year 2025 outlook was raised to $3.386–$3.390 billion in revenue and $2.00–$2.02 in adjusted EPS.
  • Shares jumped about 20%–23% to near $190–$191 as customers with at least $100,000 in ARR grew 16% to roughly 4,060, with AI products like Bits AI Agents, LLM Observability upgrades, MCP Server and the TOTO model cited, while analysts continue to watch OpenAI concentration risk.