Can Datadog's Strong Enterprise Base Drive the Next Growth Phase?

Datadog DDOG is shaping its growth strategy around platform consolidation as enterprises look to simplify increasingly complex observability environments. Rather than competing on narrow monitoring features, Datadog is positioning its platform as a unified layer across cloud operations, security and digital experience workflows. This approach aligns with enterprise IT priorities, where reducing tool sprawl and improving cross-system visibility have become central to modernization efforts.

This strategy is strengthening Datadog’s enterprise base as large organizations standardize multiple teams and workloads on a single platform. Ongoing developments are reinforcing this momentum. Expanded support for Oracle Cloud Infrastructure improves Datadog’s relevance for enterprise OCI workloads, while the broadened collaboration with Amazon Web Services enhances its positioning across AI observability and security in multi-cloud environments. Customer additions such as Culture Amp, which adopted Datadog to improve end-user experience and sustainability monitoring, further reflect enterprise adoption extending beyond core infrastructure monitoring.

Enterprise adoption trends remained visible in third-quarter performance, with total customers reaching about 32,000, up 9.6% year over year. Growth was more pronounced among larger accounts, as customers generating $100,000 or more in annual recurring revenue increased 16% year over year, highlighting the rising contribution of enterprise customers to the overall base. The Zacks Consensus Estimate for fourth-quarter 2025 customers is pegged at 32,643, reflecting 2% year-over-year growth, suggesting a moderation in net additions as expansion within existing accounts becomes more prominent.

As Datadog’s growth mix tilts toward enterprise-led expansion, execution within customer environments becomes increasingly important. Consolidation decisions across observability stacks typically progress in stages, as enterprises rationalize tools across teams and operating environments. The pace at which these standardization efforts translate into broader usage and incremental spend will remain a key variable influencing how effectively Datadog’s enterprise base contributes to its next phase of growth.

DDOG Faces Stiff Competition

Datadog competes for enterprise platform standardization alongside companies such as SentinelOneS and Cloudflare NET as large organizations streamline technology stacks. SentinelOne is expanding beyond endpoint security into broader cloud and data visibility, positioning itself as a platform for enterprise-wide threat and telemetry management. Cloudflare, is deepening its platform at the network and application edge, offering performance, security and visibility as part of a consolidated enterprise stack. As enterprises evaluate fewer, broader platforms, Datadog, SentinelOne and Cloudflare increasingly compete for long-term enterprise adoption decisions tied to standardization rather than point solutions.

DDOG's Price Performance, Valuation & Estimates

Shares of Datadog have appreciated 7.7% in the past six months, outperforming the Zacks Internet-Software industry’s decline of 5.1% and underperforming the Zacks Computer and Technology sector’s return of 22.1%.

DDOG’s Price Performance

From a valuation standpoint, Datadog is trading at a forward 12-month price-to-sales ratio of 12.16X, higher than the industry’s 4.75X. DDOG carries a Value Score of F.

DDOG’s Valuation

The Zacks Consensus Estimate for DDOG’s 2025 earnings is pegged at $2 per share, up by two cents over the past 30 days. The earnings figure suggests a 9.89% increase year over year.

Datadog, Inc. Price and Consensus

Datadog, Inc. price-consensus-chart | Datadog, Inc. Quote

DDOG currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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