How fast is Datadog's revenue growing and is growth accelerating?

Q1 2026 revenue grew 32% year-over-year to $1,006.4 million. The filing does not provide prior-quarter growth rates, so acceleration or deceleration cannot be assessed from this document alone. The Q2 guidance of $1.07–$1.08 billion implies continued strong sequential growth.

Why is GAAP profitability so much lower than non-GAAP profitability?

The gap is mainly stock-based compensation of $196.8 million, plus employer payroll taxes on equity awards ($17.0 million) and amortization of acquired intangibles ($1.6 million). Together these items moved GAAP operating income from $7.3 million to a non-GAAP figure of $223.5 million. Investors should weigh stock-based compensation as a real economic cost.

How strong is Datadog's cash generation and balance sheet?

Operating cash flow was $334.6 million and free cash flow was $289.1 million, a 29% margin, down from 32% a year earlier as capitalized software development and capex increased. Cash and marketable securities were $4.8 billion, against about $985 million in net convertible notes due 2029.

What is management guiding for 2026?

Full-year 2026 revenue is guided to $4.30–$4.34 billion, non-GAAP operating income to $940–$980 million, and non-GAAP EPS to $2.36–$2.44 on about 372 million diluted shares. Q2 guidance is revenue of $1.07–$1.08 billion and non-GAAP EPS of $0.57–$0.59. Management did not reconcile these non-GAAP outlooks to GAAP measures.

Did anything change in the Board or key strategic partnerships?

Dominic Phillips, CFO of Samsara and formerly of ServiceNow and Morgan Stanley, was appointed to the Board. Datadog also entered a strategic partnership with Sakana AI focused on enterprise AI adoption, initially in Japan before expanding globally.

DDOG 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed May 7, 2026. Cited figures are marked; the original filing is the authoritative source.

Datadog (DDOG) reported first quarter 2026 results on May 7, 2026, with revenue of $1,006.4 million^a, up 32% year-over-year from $761.6 million.

Growth was broad-based among larger customers: customers with ARR of $100,000^b or more rose about 21% to roughly 4,550 from 3,770 a year earlier. Gross margin held at 79% GAAP and 80% non-GAAP, and non-GAAP operating margin was 22%, flat year-over-year. GAAP operating income turned positive at $7.3 million (1% margin) versus a $12.4 million loss a year ago, and GAAP diluted EPS was $0.15 versus $0.07.

Cash generation was strong. Operating cash flow was $334.6 million^c and free cash flow was $289.1 million, a 29% margin, though down from a 32% margin a year earlier as capitalized software and capex rose. Cash and marketable securities totaled $4.8 billion at quarter-end.

Stock-based compensation of $196.8 million^d remains large relative to GAAP operating income, which is a key point for investors evaluating true profitability. Management guided Q2 2026 revenue to $1.07–$1.08 billion and full-year 2026 revenue to $4.30–$4.34 billion, with non-GAAP operating income of $940–$980 million for the year.

Product news included general availability of the MCP Server, Bits AI Security Analyst, and GPU Monitoring, plus a strategic partnership with Sakana AI. The filing furnishes the press release under Item 2.02 and is not deemed filed for Section 18 purposes.

02—Key points

Key Highlights

Revenue grew 32% year-over-year to $1,006.4 million in Q1 2026, up from $761.6 million.
Customers with ARR of $100,000 or more increased about 21% to roughly 4,550 from 3,770, signaling continued upmarket traction.
GAAP operating income of $7.3 million (1% margin) improved from a $12.4 million loss; non-GAAP operating income was $223.5 million (22% margin).
Operating cash flow of $334.6 million and free cash flow of $289.1 million; cash and marketable securities totaled $4.8 billion.
Full-year 2026 revenue guidance of $4.30–$4.34 billion and Q2 guidance of $1.07–$1.08 billion.
Stock-based compensation of $196.8 million (about 20% of revenue) remains a significant gap between GAAP and non-GAAP profitability.
Product launches include GA of MCP Server, Bits AI Security Analyst, and GPU Monitoring; Sakana AI partnership announced; DASH 2026 set for June 9-10.

03—Questions

Frequently Asked Questions

How fast is Datadog's revenue growing and is growth accelerating?
Q1 2026 revenue grew 32% year-over-year to $1,006.4 million. The filing does not provide prior-quarter growth rates, so acceleration or deceleration cannot be assessed from this document alone. The Q2 guidance of $1.07–$1.08 billion implies continued strong sequential growth.
Why is GAAP profitability so much lower than non-GAAP profitability?
The gap is mainly stock-based compensation of $196.8 million, plus employer payroll taxes on equity awards ($17.0 million) and amortization of acquired intangibles ($1.6 million). Together these items moved GAAP operating income from $7.3 million to a non-GAAP figure of $223.5 million. Investors should weigh stock-based compensation as a real economic cost.
How strong is Datadog's cash generation and balance sheet?
Operating cash flow was $334.6 million and free cash flow was $289.1 million, a 29% margin, down from 32% a year earlier as capitalized software development and capex increased. Cash and marketable securities were $4.8 billion, against about $985 million in net convertible notes due 2029.
What is management guiding for 2026?
Full-year 2026 revenue is guided to $4.30–$4.34 billion, non-GAAP operating income to $940–$980 million, and non-GAAP EPS to $2.36–$2.44 on about 372 million diluted shares. Q2 guidance is revenue of $1.07–$1.08 billion and non-GAAP EPS of $0.57–$0.59. Management did not reconcile these non-GAAP outlooks to GAAP measures.
Did anything change in the Board or key strategic partnerships?
Dominic Phillips, CFO of Samsara and formerly of ServiceNow and Morgan Stanley, was appointed to the Board. Datadog also entered a strategic partnership with Sakana AI focused on enterprise AI adoption, initially in Japan before expanding globally.

04—Continue

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