Datadog Shares Drop Despite Third Quarter Earnings Beat and Raised Guidance
Datadog (DDOG) shares fell as much as 14.6% on Wednesday following its third-quarter earnings report. While the company exceeded analyst expectations with $1.2 billion in revenue—a 35% year-over-year increase—and adjusted EPS of $0.81, investor reaction was negative due to future growth projections. The sell-off was primarily driven by a perceived deceleration in growth. Although management raised its full-year 2026 outlook, the fourth-quarter revenue guidance suggests a sequential slowdown to approximately 25% year-over-year growth compared to the 35% achieved in Q3. This deceleration appears to have spooked investors given Datadog's high valuation multiples.
Tickers: $DDOG
Topics: cloud monitoring earnings beat guidance revenue growth stock price decline