Datadog Q3: 35% Revenue Growth and $251M in Free Cash Flow
As seen on the 24/7 Wall St. homepage on November 4, 2026.
Datadog delivered a strong third quarter, with 35% year-over-year revenue growth, $290 million in operating cash flow, and $251 million in free cash flow.
Growth at that pace this deep into the cloud cycle is rare, and Pomel is pairing it with cash generation instead of spending it all chasing AI workloads. For a $73.9 billion observability name facing fresh competition from Elastic and startups, the cash conversion is the part that defends the multiple.
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Datadog's third-quarter earnings report under Olivier Pomel paired 35% year-over-year revenue growth with $251 million in free cash flow, an unusual combination this far into the cloud infrastructure cycle.
That cash flow profile signals discipline while many software companies chasing AI-driven workloads plow revenue back into infrastructure and sales capacity, compressing margins.
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Generating that free cash flow in a single quarter supports Datadog's premium multiple and gives the business a buffer against intensifying competition from Elastic and a wave of better-funded startups.
The number to track is whether that cash conversion rate holds as competitive pressure builds, since a compression in free cash flow relative to revenue growth would be an early signal that Datadog is spending more to defend its position than these third-quarter results suggest.
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Mentioned: DDOG