DDOG: Datadog

_Created 2026-11-02 10:00 ET from report. Screening/research, not investment advice._

Business

Cloud observability and security SaaS (infrastructure/APM/logs, plus security and AI ops tools). Mostly usage-priced, so revenue tracks customers' cloud workloads ("consumption" software). TRAI sector: Software. Cluster 5 (PLTR, SNOW, ZS, PANW, CRWD, NET; avg ρ 0.68). Top 60d ρ: NET 0.80, PLTR 0.67, SNOW 0.62 (/api/correlations, asOf 10-30).

Catalysts, guidance & news

• Q3 2026: Wed 2026-11-04 BMO, call 8:00 ET (Datadog IR).
• Guide: revenue $1.135–1.145B, non-GAAP EPS $0.63–0.65. Consensus is ~$1.14B / $0.64, i.e., the midpoint. Whisper $0.69. FY26 revenue guide is $4.45–4.47B after two raises.
• Known headwind: the largest customer (an AI company) renewed but uses fewer seats from Q3, so headline growth slows from 36% in Q2. Watch non-AI customer growth and gross margin (79.6% in Q2) (Earnings Whispers via Finviz, 2026-10-27).
• 2026-10-30: −11.50% to $235.27, with no company news. AI-capex sell-off after AMZN/INTC. NTM EPS estimate is flat at ~$2.65; forward P/E went ~103× → ~89×. Wells Fargo raised its target to $325 on 10-28. A reported ~$4B Upwind deal now looks unlikely (unconfirmed) (Yahoo/TIKR, 2026-10-31).

TRAI data

• 10-30 short_momentum (suspended bucket): relVol 2.16, residual z −1.48, rangePos 0.27.
• Last 4 prints: avg |gap| 18.7%, fill 0%, continuation 75%. Gaps were +15.4%, +8.9%, +30.8% and −19.7% (2026-08-06) (/api/events).
• 2026-11-02 day 2: −4.57% at ~10:15 ET (o→now −4.66%), below VWAP, broke the OR30 low. IGV −0.4%, QQQ +0.8% (Yahoo, unofficial).

Report links

• 2026-10-30 10:00: software split
• 2026-11-02 10:00: software day 2, ISM

2026-11-05 15:00 update — Q3 print actuals

• Printed Wed 2026-11-04 BMO (Datadog IR, 2026-11-04 [V-P]):
• Revenue $1.20B (+35% YoY); non-GAAP diluted EPS $0.81; GAAP diluted EPS $0.32.
• OCF $290M; FCF $251M; ~4,860 $100k+ ARR customers (+20% YoY).
• Q4 outlook: revenue $1.19–1.20B; non-GAAP op. income $280–290M; non-GAAP EPS $0.69–0.71.
• Full-year 2026 outlook: revenue $4.515–4.525B.
• Why −14%: secondary coverage (call / SiliconANGLE / Investing.com / WSJ via Quartz) says Q4 guide assumes the largest AI customer at contractual minimum after a usage cut [S-1 on framing; not in the IR release body]. TRAI /api/events: gap −9.42%, reactionCC −14.42%, relVol 4.02, EPS surprise +26.4% vs $0.64 est.
• Day 2 (11-05): Yahoo ~15:08 last ≈ 174.92 vs 220.52 (still crushed; daily last ~174.94).
• Peer into NET print tonight (ρ 0.78). Report