Datadog CEO Sells 122,482 Shares Worth $19.9 Million

Chief Executive Officer Pomel Olivier of Datadog (NASDAQ:DDOG) sold 122,482 shares through a series of option exercises and open-market sales totaling approximately $19.9 million on Oct. 7, 2025, Oct. 8, 2025, and Oct. 9, 2025, reducing his direct holdings to 533,358 shares as of Oct. 9, 2025, according to the SEC Form 4 filing.

Transaction summary

Transaction value based on SEC Form 4 weighted average purchase price ($162.17); post-transaction value based on Oct. 9, 2025 market close ($164.07).

Key questions

How does the size of this transaction compare to prior activity by Pomel Olivier?
The 122,482 shares sold on Oct. 9, 2025, exceed the historical median for administrative transactions, which is approximately 85,637 shares, representing 18.68% of direct holdings prior to the trade as of Oct. 9, 2025, a notably higher proportion than the recent-period median of 4.14% per disposition from July 8, 2024 to Oct. 9, 2025.

What is the significance of the derivative component in this transaction?
This event involved the conversion of 198,718 Class B Common Stock derivative shares, followed by an immediate open-market sale of 122,482 shares on Oct. 9, 2025. Such option-related activity is typical for executive liquidity events.

What is the impact on Pomel Olivier's remaining ownership and option capacity?
After the transaction, direct ownership stands at 533,358 shares (~$87.5 million as of Oct. 9, 2025; value based on closing price on that date). This represents 0.1529% of outstanding shares.

How does the transaction price compare to recent market levels and the stock's performance?
The shares were sold at a weighted average price of approximately $162.17 per share on Oct. 9, 2025. The current price as of Oct. 11, 2025, is $158.74.

Company overview

*1-year performance calculated using Oct. 9, 2025, as the reference date.

Company snapshot

Datadog offers a cloud-native SaaS platform for infrastructure monitoring, application performance management, log analytics, and security monitoring, with additional features such as dashboards, alerting, and collaboration tools.

The company serves developers, IT operations teams, and business users across North America and international markets, targeting organizations with complex cloud and hybrid environments.

Datadog is a leading provider of cloud-based monitoring and analytics solutions, enabling organizations to achieve real-time observability across their technology stacks. The company leverages a unified SaaS platform to address the needs of modern enterprises operating in dynamic, cloud-centric environments.

Foolish take

The stock sale Pomel executed earlier this month was significant but it probably isn't a sign the CEO expects a downturn ahead. All of the company's named executive officers were paid a base salary of $425,000 in 2024. The vast majority of their income comes in the form of equity awards or stock options.

Pomel's recent sale could be an attempt to take some profits off the table. Datadog stock has risen about 75% over the past six months.

Demand for Datadog's observability and security platform is on the rise. This year, revenue is expected to reach $3.317 billion at the midpoint of management's guided range. The sales guidance implies a gain of 24% over last year's performance. In 2024, sales grew by 26% year over year.

While sales have been on the rise, Datadog's bottom line hasn't kept up. Trailing 12-month earnings per share are down by about 33% over the past year. This year, management is forecasting adjusted earnings in a range between $1.80 and $1.83 per share. The guided range is in line with adjusted earnings that reached $1.82 per share last year.

Glossary

Option exercise: The act of converting options into company shares, typically by company insiders or employees.
Open-market sale: Selling shares directly on a public stock exchange, rather than through a private transaction.
SEC Form 4: A required filing that discloses insider trades by company officers, directors, or major shareholders.
Derivative shares: Shares acquired through financial instruments like options, rather than purchased directly on the market.
Class B common stock: A type of company share, often with different voting rights or conversion features compared to Class A shares.
Liquidity event: An occurrence allowing shareholders to convert holdings into cash, such as selling stock after exercising options.
Direct holdings: Shares owned outright by an individual, not including indirect or derivative interests.
Outstanding shares: The total number of a company’s shares that are currently held by all shareholders.
Weighted average price: The average price of shares sold, weighted by the number of shares at each price.
SaaS (Software as a Service): A software delivery model where applications are accessed online rather than installed locally.
Observability: The ability to monitor and understand the internal state of complex systems using data and analytics.
TTM: The 12-month period ending with the most recent quarterly report.

Cory Renauer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Datadog. The Motley Fool has a disclosure policy.