Datadog Announces Second Quarter 2026 Financial Results
Datadog, Inc. (DDOG) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 Datadog Announces Second Quarter 2026 Financial Results August 6, 2026 Second quarter revenue grew 36% year-over-year to $1.12 billion Robust growth of larger customers, with about 4,720 $100k+ ARR customers, up from about 3,850 a year ago Launched AI-powered Bits Co
How this was made
The 30-second read
Why it matters
Traders can reprice the stock based on the disclosed Q2 performance and the explicit Q3 and FY 2026 revenue and non-GAAP income per share ranges, and assess whether AI-driven product momentum is translating into larger-customer ARR growth and cash generation.
Market read
A primary earnings-and-guidance disclosure with concrete financial metrics and forward ranges, plus AI product and acquisition updates that can affect growth expectations.
What to watch
GAAP operating income is near breakeven ($5M) despite strong non-GAAP margins, so investors may scrutinize GAAP-to-non-GAAP bridge and margin sustainability.
Second quarter revenue grew 36% year-over-year to $1.12 billion
Revenue grew 36% year-over-year to $1.12 billion, operating cash flow was $316 million, free cash flow was $279 million, and the company guided to continued revenue growth in the third quarter and full year 2026.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| RevenueGAAP | $1.12B | – | 36% |
| GAAP operating incomeGAAP | $5M | – | – |
| GAAP operating marginGAAP | 0% | – | – |
| Non-GAAP operating incomenon-GAAP | $257M | – | – |
| Non-GAAP operating marginnon-GAAP | 23% | – | – |
| GAAP net income per diluted shareGAAP | $0.12 | – | – |
| Non-GAAP net income per diluted sharenon-GAAP | $0.65 | – | – |
| Operating cash flowother | $316M | – | – |
| Free cash flownon-GAAP | $279M | – | – |
| Cash, cash equivalents, and marketable securitiesGAAP | $5B | – | – |
| Customers with ARR of $100,000 or moreother | about 4,720 | – | 23% |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
Third Quarter and Full Year 2026 outlook
- RevenueThird Quarter 2026: between $1.135 billion and $1.145 billion. Full Year 2026: between $4.45 billion and $4.47 billion.
- NoteThird Quarter 2026 non-GAAP operating income: between $260 million and $270 million.
- NoteThird Quarter 2026 non-GAAP net income per share: between $0.63 and $0.65, assuming approximately 378 million weighted average diluted shares outstanding.
- NoteFull Year 2026 non-GAAP operating income: between $1.01 billion and $1.03 billion.
- NoteFull Year 2026 non-GAAP net income per share: between $2.50 and $2.54, assuming approximately 376 million weighted average diluted shares outstanding.
What drove it
- As of June 30, 2026, Datadog had about 4,720 customers with ARR of $100,000 or more, an increase of 23% from about 3,850 as of June 30, 2025.
- Datadog acquired Adaptive ML to accelerate Datadog AI Research’s investment in world models and agentic LLM post-training for observability.
- Datadog launched more than 100 new capabilities at DASH 2026, including fully autonomous Bits AI, AI Guard, Bring Your Own Cloud, and Bits Agent Builder.
- Datadog launched AI-powered Bits Code, Bits Chat, and Bits Agent Builder for general availability.
Concerns
- GAAP operating income was $5 million and GAAP operating margin was 0%.
- Datadog stated that stock-based compensation and employer payroll taxes on equity incentive plans could be material to results computed in accordance with GAAP.
- The company cited risks related to customer subscription renewals and expansion, attracting new customers, competition, security breaches, platform interruptions, changing customer needs, data privacy and security requirements, and information technology spending.
What to watch
- Execution against third-quarter 2026 revenue guidance of between $1.135 billion and $1.145 billion.
- Execution against full-year 2026 revenue guidance of between $4.45 billion and $4.47 billion.
- The progression of GAAP profitability relative to reported GAAP operating income of $5 million and a 0% GAAP operating margin.
- Growth in customers with ARR of $100,000 or more after reaching about 4,720 as of June 30, 2026.
- Customer adoption of the more than 100 capabilities launched at DASH 2026 and the acquired Adaptive ML technology.
Balance sheet and cash flow
- Operating cash flow was $316 million.
- Free cash flow was $279 million.
- Cash, cash equivalents, and marketable securities were $5.0 billion as of June 30, 2026.
Analysis
Datadog reported second-quarter 2026 revenue of $1.12 billion, up 36% year-over-year. The company also reported about 4,720 customers with ARR of $100,000 or more as of June 30, 2026, up 23% from about 3,850 a year earlier. Management linked customer activity to AI deployment and the use of Datadog for observability, security, and action across AI-enabled solutions.
The profitability profile showed a substantial difference between GAAP and non-GAAP measures. GAAP operating income was $5 million and GAAP operating margin was 0%, while non-GAAP operating income was $257 million and non-GAAP operating margin was 23%. GAAP net income per diluted share was $0.12, compared with non-GAAP net income per diluted share of $0.65. The release identifies stock-based compensation, amortization of acquired intangibles, employer payroll taxes on employee stock transactions, M&A transaction costs, amortization of issuance costs, and an assumed tax provision among the adjustments used in non-GAAP measures.
Cash generation was meaningful in the reported period, with operating cash flow of $316 million and free cash flow of $279 million. Cash, cash equivalents, and marketable securities were $5.0 billion as of June 30, 2026. The company also disclosed the acquisition of Adaptive ML and a product push at DASH 2026 that included more than 100 new capabilities, including fully autonomous Bits AI, AI Guard, Bring Your Own Cloud, and Bits Agent Builder.
The third-quarter outlook calls for revenue between $1.135 billion and $1.145 billion, non-GAAP operating income between $260 million and $270 million, and non-GAAP net income per share between $0.63 and $0.65. Full-year 2026 guidance calls for revenue between $4.45 billion and $4.47 billion, non-GAAP operating income between $1.01 billion and $1.03 billion, and non-GAAP net income per share between $2.50 and $2.54. The filing does not provide a reconciliation of forward non-GAAP operating income or non-GAAP net income per share because of uncertainty and potential variability in reconciling items.
The key reported areas for investors are sustained 36% revenue growth, growth in the larger-customer base, the gap between GAAP and non-GAAP operating profitability, and the company’s ability to execute its third-quarter and full-year guidance. The release provides no segment revenue disclosure, so revenue mix by operating segment cannot be assessed from this filing text.
Management, verbatim
Datadog delivered a strong quarter, with 36% year-over-year revenue growth, $316 million in operating cash flow, and $279 million in free cash flow.
Olivier Pomel, co-founder and CEO
Our customers are building and deploying with AI, and they are using the Datadog platform to observe, secure, and act on their AI-enabled solutions.
Olivier Pomel, co-founder and CEO
We are innovating rapidly to help our customers manage rising complexity, and increasingly build autonomy into their operations.
Olivier Pomel, co-founder and CEO
Not in the filing
stated, not guessed- Prior-year revenue amount.
- Prior-quarter revenue amount and sequential revenue growth.
- Segment revenue, segment growth, and segment profitability.
- GAAP gross profit and GAAP gross margin.
- Non-GAAP gross profit and non-GAAP gross margin.
- GAAP net income amount.
- Non-GAAP net income amount.
- Prior-year and prior-quarter operating income, operating margin, net income, EPS, operating cash flow, and free cash flow.
- Capital expenditures and capitalized software development costs.
- Debt balance.
- Share repurchases, dividends, and other capital-return amounts.
- Changes in cash, cash equivalents, and marketable securities from prior periods.
- Third-quarter and full-year guidance for gross margin, operating expenses, and tax rate.
- Prior-period outlook for comparison with actual results.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was checked against the filing text, and a metric whose value, prior period and change do not add up is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
This is Datadog’s SEC Form 8-K (Item 2.02) with Q2 2026 results and forward guidance, plus business updates including AI product launches and an acquisition.
Ticker impact
Datadog reported Q2 2026 revenue growth to $1.12B, $279M free cash flow, and issued Q3 and FY 2026 guidance ranges.
Likely positive near-term bias if the market views the guidance ranges and cash flow as durable, with volatility around non-GAAP assumptions and stock-based compensation reconciliation.
The filing includes concrete quarterly results, operating cash flow/free cash flow, and explicit Q3 and FY 2026 guidance ranges, which are direct inputs to valuation and positioning.
Market effects
Reinforces demand narrative for AI observability and security platforms, potentially supporting sentiment for software peers with similar AI-driven monitoring themes.
Primarily US large-cap software sentiment via NASDAQ-listed earnings and guidance.
Limited direct global macro linkage, but AI infrastructure spend and observability/security budgets are globally relevant.
Counterpoint
Non-GAAP profitability may be less durable if stock-based compensation and employer payroll taxes on equity incentives swing materially versus the non-GAAP framing.
Key entities
- companyDatadog, Inc.
NASDAQ-listed observability and security platform reporting Q2 2026 results and providing Q3 and FY 2026 guidance.
- acquired_companyAdaptive ML
Frontier AI startup acquired by Datadog to accelerate reinforcement learning operations and agentic LLM post-training for observability.
