Datadog stock: Largest AI customer cuts usage, raising growth test

Datadog's largest customer reduced its usage during the third quarter, adding a new concentration risk to the outlook for the observability software company. Management said the account remained above its contractual minimum, but the fourth-quarter forecast assumes revenue from that customer only at the minimum commitment.

The change was discussed during Datadog's third-quarter earnings call on November 4. In the Datadog Q3 2026 earnings transcript, Chief Financial Officer David Obstler said the customer had spent substantially above its minimum commitment in the quarter, while the guidance model uses only that minimum.

Broader growth remains in focus

Datadog reported third-quarter revenue of 1.197 billion US dollars, up 35 percent from a year earlier. Excluding the largest customer, revenue growth accelerated to the high 20s percent range, according to management.

For the fourth quarter, Datadog expects revenue of 1.19 billion to 1.20 billion US dollars, representing 25 percent to 26 percent year-over-year growth. Management said growth excluding the largest customer implied a low-to-mid-30s rate, leaving discretionary usage from the account as a potential variable around the forecast.

Datadog stock traded at 164.40 euros on Lang & Schwarz at 16:11 CET on Friday, November 13, 2026.

AI products support the platform case

The company is seeking broader adoption across its observability and security platform. Scout 1.0, a specialized model for production investigations, now powers Bits Investigation and is intended to support more frequent investigations at lower inference cost.

For investors, the next test is whether wider customer adoption and AI-related products can offset the near-term effect of lower usage from one large account. The fourth-quarter revenue range and the treatment of that customer's spending will be central indicators.

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