Last week, I published The Latest Thoughts From American Technology Companies On AI (2025 Q4). In it, I shared commentary in earnings conference calls for the fourth quarter of 2025, from the leaders of US-listed technology companies that I follow or have a vested interest in, on the topic of AI and how the technology could impact their industry and the business world writ large. A few more technology companies I’m watching hosted earnings conference calls for 2025’s fourth quarter after I prepared the arti ...

Datadog 2026 Investor Day Summary Company Overview - **Company**: Datadog (NasdaqGS: DDOG) - **Event**: 2026 Investor Day held on February 12, 2026 Key Industry Insights - **Cloud Migration**: Gartner predicts public cloud spending will exceed $1 trillion by 2027, representing only 16% of global tech spend, indicating a sustained migration trend towards cloud solutions [5][6] - **AI Integration**: The rise of AI is expected to compound the complexity of technology environments, necessitating advanced observability solutions [8][11] Core Company Strategies - **Investment in R&D**: Datadog invests approximately 30% of its revenues into R&D, with over $1 billion spent in 2025, employing around 4,000 engineers [12] - **Platform Expansion**: The company aims to broaden its platform capabilities to address the increasing complexity faced by customers, integrating AI across all product layers [19][27] Product Innovations - **Observability Solutions**: Datadog has expanded its offerings to include data observability, user analytics, and security solutions, with significant growth in ARR across various product lines: - $1.6 billion in infrastructure monitoring - Over $1 billion each in log management and APM/DEM suite [18] - **AI Capabilities**: The introduction of AI tools, such as Bits AI SRE, aims to enhance operational efficiency by automating problem identification and resolution [34][61] Market Position and Growth Potential - **Customer Base**: Datadog serves over 30,000 customers, including many Fortune 500 companies, with a market share still in the mid-teens, indicating substantial growth potential [26] - **Security Products**: The security segment has surpassed $100 million in ARR, with a significant opportunity to increase wallet share among existing customers [63][64] Competitive Advantages - **Data Utilization**: Datadog's unique access to vast amounts of domain-specific data enhances its AI capabilities, allowing for superior model performance at lower costs compared to larger frontier models [30][40] - **Unified Platform**: The integration of observability and security functions within a single platform allows for streamlined operations and faster response times to threats [60][61] Future Directions - **Autonomous Operations**: Datadog is focused on developing fully autonomous operations, which will require advanced models for validation, safety, and control [42][44] - **AI Workloads**: The company is preparing to support AI-native workloads, including GPU monitoring, to capture emerging market opportunities [56][57] Additional Insights - **Customer Success Stories**: Examples of customers successfully leveraging Datadog's platform to consolidate tools and enhance operational efficiency were highlighted, demonstrating the platform's scalability and effectiveness [50][55] - **BYOC Initiative**: The "Bring Your Own Cloud" initiative allows customers to maintain data within their own environments while utilizing Datadog's powerful analytics capabilities [58] This summary encapsulates the key points discussed during Datadog's 2026 Investor Day, highlighting the company's strategic direction, product innovations, and market opportunities.

FEBRUARY 12, 2026 Strategy, innovation, Datadog platform and product Q&A Safe Harbor This presentation and the accompanying oral presentation have been prepared by Datadog, Inc. ("Datadog" or the "company") for informational purposes only and not for any other purpose. Nothing contained in this presentation is, or should be construed as, a recommendation, promise or representation by the presenter or Datadog or any officer, director, employee, agent or advisor of Datadog. This presentation does not purport ...

Core Insights - Datadog (DDOG) reported strong fourth-quarter 2025 results with revenues of $953.19 million, reflecting a 29% year-over-year growth, exceeding the Zacks Consensus Estimate by 4.22% [1] - Adjusted earnings per share were 59 cents, surpassing the consensus estimate by 7.27% [1] Financial Performance - The company achieved record bookings of $1.63 billion, marking a 37% annual increase [2] - For first-quarter 2026, management guided revenues between $951 million and $961 million, indicating a year-over-year growth of 25% to 26% [3] - Full-year 2026 revenue guidance is set at $4.06 billion to $4.10 billion, suggesting a growth deceleration to 18% to 20% compared to 28% growth in 2025 [3] - The Zacks Consensus Estimate for 2026 earnings is $2.27 per share, reflecting a 10.73% year-over-year increase [4] - Projected non-GAAP operating income for 2026 is between $840 million and $880 million, with non-GAAP earnings per share expected to be in the range of $2.08 to $2.16 [5] Operating Expenses and Margins - Datadog's non-GAAP operating margin was approximately 23.4% in the fourth quarter, but full-year net income declined to $107.74 million despite revenue growth [6] - The company continues to invest heavily in research and development, which may pressure operating margins in the near term [6] Competitive Landscape - Datadog faces increasing competition in the observability market, with established vendors like IBM and Dynatrace intensifying their efforts [12] - The company's forward 12-month price-to-sales (P/S) ratio is around 10.75x, significantly higher than the industry average of 4.02x, indicating that anticipated growth is already priced in [13] Conclusion - Despite a strong fourth-quarter performance, Datadog's decelerating growth guidance, rising expenses, and stretched valuation present challenges for investors [17]

【导读】平淡的夜晚，道指再创新高 大家好，今晚的消息面上略微平淡，我们简单看一下海外市场的表现。 2月10日晚间，美股三大指数震荡上涨，道指涨幅在200点到300点之间，再创历史新高，纳指跟标普指数微涨。 高盛、美国运通等金融股延续涨势。道指盘中第三次连续刷新历史纪录；而在上周，道指首次突破50000点大关。 大盘的支撑主要来自软件板块上涨：Datadog和ServiceNow分别反弹约14%和4%，Unity股价也上涨5%。 消息面上，Datadog业绩超预期，2025财年收入为34.3亿美元，同比增长28%；运营现金流达10.5亿美元，自由现金流达9.15亿美元。2025财年第 四季度收入同比增长29%，达到9.53亿美元；其中大型客户增长强劲，ARR超过100万美元客户达到603家，较上年同期的462家增长31%；推出了 Bits AI SRE Agent、存储管理、功能标志和数据可观测性产品，实现全面可用性。 AI应用软件股大涨，相关指数ETF大涨超2%。高盛集团CEO大卫·所罗门认为，上周因担心人工智能竞争而导致的软件股大跌，可能被市场反应 过度。 所罗门表示："我觉得过去一周的叙事有点过于泛化了。 ...

【导读】平淡的夜晚，道指再创新高 大家好，今晚的消息面上略微平淡，我们简单看一下海外市场的表现。 2月10日晚间，美股三大指数震荡上涨，道指涨幅在200点到300点之间，再创历史新高，纳指跟标普指数微涨。 高盛、美国运通等金融股延续涨势。道指盘中第三次连续刷新历史纪录；而在上周，道指首次突破50000点大关。 大盘的支撑主要来自软件板块上涨：Datadog和ServiceNow分别反弹约14%和4%，Unity股价也上涨5%。 消息面上，Datadog业绩超预期，2025财年收入为34.3亿美元，同比增长28%；运营现金流达10.5亿美元，自由现金流达9.15亿美元。2025财年第 四季度收入同比增长29%，达到9.53亿美元；其中大型客户增长强劲，ARR超过100万美元客户达到603家，较上年同期的462家增长31%；推出了 Bits AI SRE Agent、存储管理、功能标志和数据可观测性产品，实现全面可用性。 | 12.01.129.40 取利：12.98 +12.91 +14.0170 | | | | | | | --- | --- | --- | --- | --- | --- | | 133.4 ...

Financial Data and Key Metrics Changes - Q4 revenue was $953 million, an increase of 29% year-over-year and above the high end of guidance [7][27] - Free cash flow was $291 million, with a free cash flow margin of 31% [8][30] - Gross profit for Q4 was $776 million, with a gross margin percentage of 81.4% [29] - Billings were $1.21 billion, up 34% year-over-year [29] - Remaining performance obligations (RPO) was $3.46 billion, up 52% year-over-year [29] Business Line Data and Key Metrics Changes - Infrastructure Monitoring contributes over $1.6 billion in ARR [10] - Log Management is now over $1 billion in ARR [10] - APM and DEM products also crossed $1 billion in ARR, with core APM product growth in the mid-30s% year-over-year [10] - 84% of customers used two or more products, up from 83% a year ago [8] Market Data and Key Metrics Changes - Datadog ended Q4 with approximately 32,700 customers, up from about 30,000 a year ago [7] - 48% of Fortune 500 companies are Datadog customers, indicating strong market penetration [9] - The median ARR for Fortune 500 customers is still less than $500,000, suggesting significant growth potential [9] Company Strategy and Development Direction - The company continues to focus on digital transformation and cloud migration as long-term growth drivers [25] - Datadog is integrating AI into its platform to enhance customer value and outcomes [25] - The company aims to solve end-to-end problems across software development, production, data stack, user experience, and security needs [25] Management's Comments on Operating Environment and Future Outlook - Management noted broad-based positive trends in demand driven by cloud migration [5] - There is an expectation of increased AI usage among customers, with significant growth anticipated in 2026 [26] - The company is optimistic about its ability to capitalize on market opportunities and deliver value to customers [25] Other Important Information - The company released over 400 new features and capabilities in 2025 [11] - Datadog launched several new products, including Data Observability and enhanced security features [16][17] - The company is seeing strong growth dynamics with its core observability pillars as customers adopt modern technologies [10] Q&A Session Summary Question: Observability's future in the context of advancements in AI - Management believes that increased productivity from AI will lead to more complexity, which observability can help manage [38][39] Question: Evolution of observability with human and agentic SREs - The company is preparing for more automation and is building products to satisfy both human and agentic interactions [41][42] Question: Insights on the eight-figure deal with an AI model company - The deal reflects the value Datadog provides over homegrown solutions, as companies recognize the cost of internal development [46][47] Question: LLMs as anomaly detection tools and Datadog's competitive moat - Management sees LLMs improving but believes Datadog's ability to provide context and proactive solutions is a significant advantage [51][55] Question: Guidance assumptions for 2026 - The company has taken a conservative approach in its guidance, expecting at least 20% growth excluding its largest customer [62] Question: Impact of LLM rise on competition - Management does not see significant changes in competition and believes Datadog is well-positioned to capture market share [68][69]

Core Insights - Datadog reported a fourth quarter revenue of $953 million, reflecting a 29% year-over-year growth, and a fiscal year revenue of $3.43 billion, up 28% from the previous year [1][6][30] - The company has expanded its customer base significantly, with 603 customers generating over $1 million in annual recurring revenue (ARR), a 31% increase from 462 customers a year ago [6][30] - Datadog launched several new features including Bits AI SRE Agent, Storage Management, Feature Flags, and Data Observability, aimed at enhancing its AI-powered observability and security platform [1][5] Financial Highlights - For Q4 2025, GAAP operating income was $9 million with a GAAP operating margin of 1%, while non-GAAP operating income was $230 million, resulting in a non-GAAP operating margin of 24% [6][30] - The company achieved an operating cash flow of $327 million and free cash flow of $291 million in Q4 2025 [6][30] - For the fiscal year 2025, GAAP operating loss was $(44) million, with a non-GAAP operating income of $768 million, leading to a non-GAAP operating margin of 22% [6][30] Customer Metrics - As of December 31, 2025, Datadog had approximately 4,310 customers with ARR of $100,000 or more, marking a 19% increase from 3,610 customers in the previous year [6][30] - The growth in larger customers indicates strong demand for Datadog's services as organizations migrate to the cloud and adopt next-generation AI technologies [2][6] Strategic Developments - Datadog expanded its collaboration with AWS, introducing new capabilities in AI, observability, and security, including LLM Observability and AI Security for AWS Resources [6][30] - The company is focused on delivering more AI-powered innovations to assist customers with complex challenges in observability, security, software delivery, service management, and product analytics [2][6] Outlook - For Q1 2026, Datadog expects revenue between $951 million and $961 million, with non-GAAP operating income projected between $195 million and $205 million [7][13] - The fiscal year 2026 revenue outlook is between $4.06 billion and $4.10 billion, with non-GAAP operating income anticipated between $840 million and $880 million [7][13]

Core Viewpoint - The sell-off in software stocks is considered overdone by Nvidia's CEO Jensen Huang, who argues that the market has overreacted to concerns about AI disrupting the software industry [1][5]. Software Industry Overview - The S&P North American Technology Software Index has declined 30% from its peak, entering bear market territory, driven by fears surrounding AI's impact on software companies [1]. - Huang believes that AI tools will complement existing software rather than replace it, suggesting that the current market sentiment is illogical [5]. Attractive Software Stocks - **Microsoft (MSFT)**: Stock down 27% from its high, currently trading at 26 times earnings, with adjusted earnings up 24% last quarter and a 160% increase in paid copilot seats [6]. - **Datadog (DDOG)**: Stock down 47% from its high, trading at 53 times adjusted earnings, with adjusted earnings increasing 20% last quarter despite high R&D spending [7]. - **AppLovin (APP)**: Stock down 52% from its high, trading at 45 times earnings, with earnings up 96% last quarter [8]. - **Atlassian (TEAM)**: Stock down 70% from its high, trading at 22 times earnings, with adjusted earnings increasing 27% last quarter [9]. - **HubSpot (HUBS)**: Stock down 73% from its high, trading at 25 times earnings, with adjusted earnings up 22% last quarter [9]. Market Outlook - While software stocks may continue to decline in the near term, long-term investors are likely to benefit from purchasing stocks at reasonable prices, anticipating significant earnings growth over the next five years [10].

Financial Data and Key Metrics Changes - Revenue for Q2 was $827 million, representing a 28% year-over-year increase and exceeding the high end of guidance [8][28] - Free cash flow was $165 million, with a free cash flow margin of 20% [9][34] - Gross profit was $669 million, resulting in a gross margin of 80.9%, compared to 80.3% in the previous quarter [32][34] - Operating income was $164 million, with an operating margin of 20%, down from 22% in the previous quarter [33][34] Business Line Data and Key Metrics Changes - The number of customers increased to approximately 31,400, up from about 28,700 a year ago [8] - 83% of customers used two or more products, and 52% used four or more products, indicating strong platform adoption [10] - The security suite generated over $100 million in ARR, growing at a mid-forties percent year-over-year rate [11] Market Data and Key Metrics Changes - AI native customers contributed about 11% of Q2 revenues, up from 8% in the previous quarter [28] - The twelve-month trailing net retention percentage was about 120, higher than the high 110s from the last quarter [29] Company Strategy and Development Direction - The company continues to focus on digital transformation and cloud migration as long-term growth drivers [23] - There is a strong emphasis on AI integration into the platform, with new AI products launched to enhance observability and incident response [26][27] - The company aims to improve standardized adoption of security products across large enterprises [55] Management's Comments on Operating Environment and Future Outlook - Management views the demand environment as solid, with low churn and stable gross revenue retention in the mid to high 90s [8] - The company is optimistic about the growth opportunities presented by AI, with expectations of broader adoption across various industries [24][25] - Management acknowledges potential volatility in revenue growth from AI native customers but remains confident in long-term growth [52] Other Important Information - The company held its DASH user conference, announcing over 125 new products and features [12] - The company ended the quarter with $3.9 billion in cash, cash equivalents, and marketable securities [34] Q&A Session Summary Question: AI contribution and market opportunity - Management discussed the layers of AI opportunity, emphasizing the need for observability in applications that are increasingly non-deterministic [41][44] Question: Sales capacity and productivity - Management confirmed successful ramping of sales capacity and productivity, with evidence of new logo production and pipeline growth [47] Question: Guidance and potential volatility - Management indicated that current growth metrics do not show volatility yet, but they remain cautious due to potential future fluctuations [52] Question: Security product adoption - Management expressed satisfaction with the current adoption of security products but acknowledged the need for broader enterprise-wide adoption [55] Question: Trends in customer demographics - Management noted stable growth in enterprise customers, with gradual improvements in SMB usage [59] Question: FlexLogs progress - Management confirmed that all major deals with enterprise customers now involve FlexLogs, which is resonating well with customers [95]