Datadog, a data security and monitoring firm, is up almost 15% today after beating the Street’s estimates on its fourth-quarter results.
Revenue came in around $953 million, up about 29% year over year. EPS beat expectations by roughly 6 to 7 percent, and forward guidance landed at $4.06 to $4.10 billion, a touch below prior consensus around $4.11 billion.
Wall Street didn’t seem to care. The stock jumped to $130.47 from recent lows near $105.7.
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DDOG’s run feels strong right now, but with a roughly 230x multiple and more teams leaning toward open source building blocks and cloud native tools like ClickHouse, OTel, and Vector, it’s fair to wonder how long that momentum lasts.
There’s also customer concentration risk. OpenAI is reportedly one of Datadog’s largest customers at about $170 million a year, despite not expecting profitability until 2029 or 2030. An October 2025 Pragmatic Engineer report by Gergely Orosz suggested OpenAI’s Datadog spend could be in the hundreds of millions annually, potentially making it one of the largest single customer SaaS contracts. The claim isn’t fully verified, but it’s not a new concern.
Meanwhile, the broader SaaS market is still under pressure. Whether Datadog keeps its seat at the table this year probably comes down to time and how fast AI adoption really plays out.
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