Datadog stock pairs 35% growth with new Scout AI model

Published on 11/09/2026 at 13:23 | Editorial responsibility: Rafael Müller, Editor-in-Chief AD HOC NEWS

Datadog stock enters its next phase after strong third-quarter growth and the launch of Scout 1.0. Management issued a measured fourth-quarter outlook.

Growth Meets A More Cautious Outlook

Datadog delivered strong third-quarter growth and expanded its large-customer base.
Scout 1.0 now supports Bits Investigation as the company builds out its AI platform.
Fourth-quarter guidance reflects a more measured near-term growth profile and customer concentration risk.

Datadog, US23804L1035, Illustration mit AI erstellt.

Datadog reported strong third-quarter growth on Wednesday, November 4, as revenue rose 35% year over year to USD 1.20 billion for the period ended September 30. The company also introduced Scout 1.0, a specialized model designed to investigate production issues and support its Bits Investigation product. The results and outlook were published in the Datadog investor release.

Profitability Expanded With Revenue

GAAP operating income reached USD 75 million, compared with a loss of USD 6 million in the year-earlier quarter. The GAAP operating margin was 6%. On a non-GAAP basis, operating income rose to USD 334 million and the operating margin widened to 28% from 23% a year earlier.

GAAP diluted earnings per share were USD 0.32, while non-GAAP diluted earnings per share reached USD 0.81. Datadog generated USD 290 million in operating cash flow and USD 251 million in free cash flow. The company said the non-GAAP figures exclude items including stock-based compensation, amortization of acquired intangibles, employer payroll taxes on equity transactions and certain transaction costs.

Large Customers And AI Drive Expansion

Datadog had about 4,860 customers with annual recurring revenue of at least USD 100,000 at the end of September, up from about 4,060 a year earlier. Management said adoption remained strong as customers expanded digital operations and AI usage across the platform.

Scout 1.0 is currently in preview and powers Bits Investigation. Datadog said the model delivers frontier-model performance at a fraction of the inference cost, allowing more frequent and earlier investigations of production alerts. The product strategy links observability for AI workloads with AI features that automate tasks on the Datadog platform.

Guidance Signals A Slower Near Term

Datadog expects fourth-quarter revenue between USD 1.19 billion and USD 1.20 billion. The outlook also calls for non-GAAP operating income of USD 280 million to USD 290 million and non-GAAP diluted earnings per share of USD 0.69 to USD 0.71.

For the full year, management projects revenue of USD 4.515 billion to USD 4.525 billion, non-GAAP operating income of USD 1.095 billion to USD 1.105 billion and non-GAAP diluted earnings per share of USD 2.73 to USD 2.75. The guidance keeps the investment case focused on customer expansion, AI adoption and the ability to convert product usage into durable recurring revenue.

What Investors Should Watch Next

Datadog stock traded at EUR 158.70 on Lang & Schwarz at 13:15 CET on Monday, November 9. The next key indicators are the pace of non-AI customer growth, the contribution from AI-native customers and the conversion of Scout and Bits usage into broader platform commitments.

For the real-time quote of Datadog stock, investors can follow the latest trading indication.