Datadog stock falls as high bar, cooling bookings offset strong quarter

What Brokers Say Tech Written by: Angela Harmantas 14:51 Thu 06 Aug 2026 --> Disclaimer No investment advice About this content Editorial Standards & Policies Share article About this content × About Angela Harmantas Angela Harmantas is an Editor at Proactive. She has over 15 years of experience covering the equity markets in North America, with a particular focus on junior resource stocks. Angela has reported from numerous countries around the world, including Canada, the US, Australia, Brazil, Ghana, and South Africa for leading trade publications. Previously, she worked in investor relations and led the foreign direct investment program in Canada for the Swedish government. She earned a Bachelor of... Read more About the publisher Proactive financial news and online broadcast teams provide fast, accessible, informative and actionable business and finance news content to a global investment audience. All our content is produced independently by our experienced and qualified teams of news journalists. Proactive news team spans the world’s key finance and investing hubs with bureaus and studios in London, New York, Toronto, Vancouver, Sydney and Perth. We are experts in medium and small-cap markets, we also keep our community up to date with blue-chip companies, commodities and broader investment stories. This is content that excites and engages motivated private investors. The team delivers news and unique insights across the market including but not confined to: biotech and pharma, mining and natural resources, battery metals, oil and gas, crypto and emerging digital and EV technologies. Use of technology Proactive has always been a forward looking and enthusiastic technology adopter. Our human content creators are equipped with many decades of valuable expertise and experience. The team also has access to and use technologies to assist and enhance workflows. Proactive will on occasion use automation and software tools, including generative AI. Nevertheless, all content published by Proactive is edited and authored by humans, in line with best practice in regard to content production and search engine optimisation. Datadog Inc ( NASDAQ:DDOG ) View Price & Profile Datadog stock falls as high bar, cooling bookings offset strong quarter Published: 14:51 06 Aug 2026 EDT Datadog Inc (NASDAQ:DDOG) shares tumbled more than 18% on Thursday even after the software company delivered what analysts called a high-quality quarter, as investors focused on decelerating bookings growth and softer-than-expected third-quarter guidance. Datadog's revenue grew 35.6% year-over-year in the second quarter, ahead of the company's 29-31% guidance range and accelerating from 32% growth in the first quarter. Jefferies analysts noted the 11% sequential revenue increase was the strongest since the second quarter of 2022. Datadog posted non-GAAP operating margin of 23% and free cash flow margin of 25%, with Jefferies noting the strength was broad-based, as non-AI customer revenue growth accelerated to the high-20% range and new-logo bookings more than doubled year-over-year, now contributing roughly 30% of revenue growth. The company also renewed a nine-figure contract with its largest customer, which Jefferies said removes a key overhang on the stock. Despite the results, investors zeroed in on guidance. Datadog raised its full-year 2026 revenue guidance by $140 million following a $46 million second-quarter beat, implying about 30% growth versus a prior outlook of 25-27%. However, third-quarter guidance of 28-29% year-over-year growth came in below expectations and implies just 1.7% sequential growth at the midpoint, compared with 2.6-2.7% in the prior two years' third-quarter guides. Remaining performance obligations, a measure of contracted future revenue, grew 43% year-over-year to $3.47 billion but declined sequentially for the first time in multiple years, decelerating from 51% growth in the first quarter. Current RPO growth also moderated to around 40% from the mid-40%s. Jefferies said the RPO deceleration warrants attention given stronger commentary around bookings, new-logo activity and initial customer ramps, though it noted longer contract durations can affect comparability. Jefferies maintained its price target of $260, based on 17 times projected 2027 revenue, saying risk/reward has become more balanced following the pullback. Continue reading