Core Thesis - Datadog, Inc. is positioned as a critical player in the enterprise software market, providing observability and security solutions for cloud applications, which is increasingly important as organizations face challenges related to cloud adoption and system complexity [2][3] Financial Performance - Datadog has demonstrated exceptional financial growth, achieving a revenue run rate exceeding $3 billion with a compound annual growth rate (CAGR) of 41% since 2020 [3] - The company reported Q3 revenue of $886 million, reflecting a year-over-year increase of 28.4%, surpassing consensus estimates [3] - Billings increased by 30% year-over-year, and remaining performance obligations (RPO) reached $2.79 billion, marking a 53% year-over-year growth [3] Customer Engagement - Datadog's customer base has shown strong engagement, with 84% of customers utilizing two or more products and 16% using eight or more, validating the effectiveness of its "land-and-expand" strategy [4] - The demand for both AI-native and non-AI-native solutions has driven usage growth, indicating a broad market appeal [4] Financial Metrics - The company maintains robust gross margins above 80%, with Q3 gross margins reported at 81% [5] - Operating expenses have increased due to strategic investments in research and development, sales, and headcount, resulting in non-GAAP operating margins of 23% [5] - Non-GAAP earnings per share (EPS) of $0.55 exceeded expectations, and free cash flow was reported at $214 million, representing a 24% margin [5] Strategic Positioning - Datadog's strong balance sheet features $4.1 billion in cash against $1.3 billion in debt, highlighting its capital efficiency [5] - The company is well-positioned to capitalize on trends such as cloud migration and artificial intelligence, offering a compelling risk/reward profile for long-term investors [5]

Core Points - Datadog, Inc. will report its third quarter fiscal year 2025 financial results on November 6, 2025, before U.S. markets open [1] - A conference call to discuss the financial results and guidance will take place on the same day at 8:00 a.m. Eastern Time [2] - Datadog provides a comprehensive observability and security platform for cloud applications, integrating various monitoring and management capabilities [3] Company Overview - Datadog's SaaS platform automates infrastructure monitoring, application performance monitoring, log management, and real-user monitoring [3] - The platform is designed to support organizations in digital transformation and cloud migration, enhancing collaboration among teams and improving application deployment speed [3] - Datadog's services help in securing applications and infrastructure, understanding user behavior, and tracking key business metrics [3]

Core Insights - ClearBridge Investments reported strong performance in the third quarter of 2025, with the S&P 500 Index rising 8.1% and the Nasdaq Composite increasing 11.2%, driven by positive economic factors and strong corporate earnings, particularly in technology [1] - The ClearBridge Large Cap Growth Strategy underperformed the benchmark due to underexposure to AI stocks and holding companies perceived as AI losers [1] Company Highlights - Datadog, Inc. (NASDAQ:DDOG) is highlighted as a key stock, with a one-month return of 5.76% and a 52-week gain of 22.53%, closing at $151.82 per share with a market capitalization of $52.946 billion [2] - The strategy initiated new positions in Datadog and other infrastructure software providers, emphasizing Datadog's leadership in cloud application monitoring and its potential for over 20% revenue growth due to the growing market for large language model observability [3] Financial Performance - Datadog reported revenue of $827 million in Q2 2025, reflecting a 28% year-over-year increase [4] - Despite its growth potential, Datadog is not among the top 30 most popular stocks among hedge funds, with 103 hedge fund portfolios holding its stock at the end of Q2 2025, up from 84 in the previous quarter [4]

Group 1 - Datadog (NASDAQ:DDOG) received an Overweight rating from Wells Fargo as the bank initiated coverage of the observability and security platform provider for cloud applications [5] - Wells Fargo set a price target of $190 on Datadog's stock [5] - Shares of Datadog increased by 4.5% during Wednesday's trading session [5]

Core Insights - The Brown Capital Management Small Company Fund experienced an 8.59% return in Q2 2025, underperforming compared to the Russell 2000® Growth index's 11.97% return [1] - The underperformance was noted particularly in the last few weeks of the quarter [1] Fund Performance - The small-cap US stocks rebounded in Q2 2025 after a challenging first quarter [1] - The fund's top five holdings were highlighted as key picks for 2025 [1] Notable Stocks - Datadog, Inc. (NASDAQ:DDOG) was mentioned as a significant contributor to the fund's performance in Q2 2025 [3] - Datadog, Inc. had a one-month return of 5.76% and a 52-week gain of 22.53% [2] - As of September 12, 2025, Datadog, Inc. closed at $136.50 per share with a market capitalization of $47.604 billion [2]