Datadog Earnings Soar but Shares Slide 1.59% with 66th-Ranked 1.11B Volume

On August 11, 2025, Datadog (DDOG) shares fell 1.59%, with a trading volume of $1.11 billion, ranking 66th in the market. The stock’s performance reflected broader sector volatility amid mixed signals from its recent earnings and guidance.

Datadog reported Q2 2025 non-GAAP earnings of $0.46 per share, exceeding estimates by 12.2%, and revenue of $826.8 million, up 28.1% year-over-year. The company added 2,700 customers, bringing the total to 31,400, with high-ARR clients (generating $100K+ annually) growing to 3,850, a 13.6% increase. These accounts now contribute 89% of total ARR, highlighting the strength of its high-value customer base.

Product innovation remains a key driver, with 83% of customers using at least two Datadog products and 14% adopting eight or more. The AI-native segment now accounts for 11% of revenue, up from 4% in the prior year, driven by demand for AI observability tools. Security products also saw robust growth, generating over $100 million in ARR with mid-40% year-over-year gains.

For Q3 2025, Datadog provided revenue guidance of $847–851 million, a 23% year-over-year increase, and non-GAAP EPS of $0.44–0.46. While revenue guidance aligns with the $848.45 million consensus, the EPS forecast is below the $0.41 consensus, reflecting cautious expectations. The stock has underperformed the broader tech sector, gaining 16.7% over the past 12 months compared to the sector’s 29.4%.

The strategy of purchasing the top 500 stocks by daily trading volume and holding them for one day delivered a 166.71% return from 2022 to the present, outperforming the benchmark return of 29.18% by 137.53%. This underscores the role of liquidity concentration in short-term stock performance, particularly in volatile markets.