Datadog Stock Earnings Reports

Datadog reported a strong start to 2026 with broad-based acceleration across AI-native and non-AI customers. Key operational highlights: revenue growth accelerated to ~32% year-over-year, quarterly revenue exceeded $1.0 billion for the first time, total ARR now exceeds $4.0 billion, and customer base grew to ~33,200 with ~4,550 customers at $100k+ ARR (representing ~90% of ARR). Product momentum: several AI and observability launches (MCP Server GA, Bits AI Security Agent, Bits Assistant preview, GPU monitoring, Experiments GA, APM recommendations) and expanded adoption metrics (more customers using 4+, 6+, and 8+ products). Security and compliance progress includes FedRAMP High certification and plans for a UK data center to address data residency demands. Sales momentum included multiple large expansions and new logos (notably two hyperscaler AI research labs and several large financial, recruiting, hedge fund, travel and fintech customers). Financials and cash flow: Q1 non-GAAP revenue of $1.01B (32% YoY), gross margin ~80%, operating margin ~22%, cash/investments $4.8B, free cash flow $289M (29% margin). Retention remains strong (gross retention mid–high 90s, trailing 12-month net retention low 120s). Guidance: Q2 revenue $1.07B–$1.08B (29%–31% YoY) and FY2026 revenue $4.30B–$4.34B (25%–27% YoY); non‑GAAP operating margin target ~22% and continued investment in R&D and go-to-market. Management noted they are applying additional conservatism to guidance assumptions for their largest customer. Overall message to investors: robust demand, significant AI-driven and platform-led expansion, disciplined guidance with continued investments to capture long-term secular growth in cloud migration and AI.