Datadog (DDOG) investor relations material

Executive summary

• Q2 2026 revenue reached $1.12 billion, up 36% year-over-year, with 70% of growth from existing customers and 30% from new customers.

• Customer base grew to 33,400, with 4,720 customers generating $100,000+ ARR, accounting for 91% of ARR and representing a 23% year-over-year increase.

• Product adoption deepened: 58% of customers use 4+ products, 37% use 6+, and 13% use 10+.

• Major deals included a $30M+ TCV with a global media company and a nine-figure renewal with a leading AI company.

• Over 100 new AI-driven capabilities launched and Adaptive ML acquired to accelerate AI research.

Financial highlights

• Free cash flow was $279 million for Q2, with a 25% margin; operating cash flow for the first half of 2026 was $650.5 million.

• Gross profit for Q2 was $881.3 million, with a gross margin of 79%, slightly down from 80% in Q2 2025.

• Non-GAAP operating income reached $257 million (23% margin); GAAP operating income was $5.5 million.

• Billings grew 38% year-over-year to $1.18 billion; RPO rose 43% to $3.47 billion.

• Cash, cash equivalents, and marketable securities totaled $5 billion at quarter end.

Outlook and guidance

• Q3 2026 revenue expected at $1.135–$1.145 billion (28–29% year-over-year growth); full-year 2026 revenue guided to $4.45–$4.47 billion (30% year-over-year growth).

• Non-GAAP operating income for Q3 expected at $260–$270 million (23–24% margin); full year at $1.01–$1.03 billion (23% margin).

• Guidance incorporates usage reduction from the largest customer.

• CapEx and capitalized software expected at 4–5% of revenue for 2026.

• Existing liquidity and cash flow expected to support requirements for the next 12 months and beyond.