10-QPeriod: Q2 FY2026

Datadog, Inc. Quarterly Report for Q2 Ended Jun 30, 2026

Filed August 6, 2026For Securities:DDOG

Summary

Datadog, Inc. (DDOG) reported robust financial performance for the six months ended June 30, 2026. Revenue grew by 34% year-over-year to $2.1 billion, driven by strong expansion from existing customers (75% of growth) and new customer acquisition (25% of growth). The company achieved profitability, with net income of $97.1 million for the period, a significant increase from $27.3 million in the prior year. Operating cash flow remained strong at $650.5 million, and free cash flow reached $567.8 million. The balance sheet is healthy, with $435.0 million in cash and cash equivalents and $4.6 billion in marketable securities, providing ample liquidity for the next 12 months and beyond. However, investors should note management's commentary about a potential deceleration in revenue growth due to reduced usage from their largest customer starting in Q3 2026. Additionally, despite increased revenue, gross margin saw a slight decrease due to higher cloud infrastructure costs.

Key Highlights

  • 1Revenue for the six months ended June 30, 2026, increased by 34% year-over-year to $2.13 billion.
  • 2Net income for the six months ended June 30, 2026, was $97.1 million, a substantial increase from $27.3 million in the same period last year.
  • 3Operating cash flow was $650.5 million for the six months ended June 30, 2026, up from $471.6 million in the prior year.
  • 4Free cash flow (non-GAAP) was $567.8 million for the six months ended June 30, 2026.
  • 5Total current assets increased to $6.01 billion as of June 30, 2026, primarily driven by increases in cash, marketable securities, and accounts receivable.
  • 6The company has approximately 33,400 customers as of June 30, 2026, up from 31,400 as of June 30, 2025.
  • 7Approximately 4,720 customers had an annual run-rate revenue (ARR) of $100,000 or more as of June 30, 2026, representing 91% of ARR.

Frequently Asked Questions

Datadog reported strong revenue growth of 34% year-over-year, reaching $2.13 billion for the six months ended June 30, 2026. The company also demonstrated significant improvement in profitability, with net income rising to $97.1 million for the same period, compared to $27.3 million in the prior year. This indicates a successful scaling of the business while improving earnings.

Datadog maintains a strong liquidity position, with $435.0 million in cash and cash equivalents and $4.6 billion in marketable securities as of June 30, 2026. The company generated $650.5 million in operating cash flow and $567.8 million in free cash flow for the six months ended June 30, 2026, highlighting robust cash generation capabilities to fund operations and future investments.

Management noted a potential deceleration in revenue growth due to reduced usage from their largest customer starting in the third quarter of 2026. Additionally, gross margin saw a slight decrease compared to the prior year, primarily attributed to increased third-party cloud infrastructure costs. The company also highlighted ongoing investments in research and development, sales, and marketing as part of its growth strategy.

Datadog continues to expand its customer base, reaching approximately 33,400 customers as of June 30, 2026. The company is also seeing strong expansion within its existing customer base, with 4,720 customers generating $100,000 or more in ARR, representing 91% of total ARR. The dollar-based net retention rate was in the low 120%'s as of June 30, 2026, indicating healthy growth from existing customer relationships, although an increase in usage growth from existing customers was partially offset by a reduction from the largest customer.