Datadog (DDOG) Q2 2026 earnings summary

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, exceeding guidance high end.

• 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.

• AI-native and non-AI customer segments both accelerated, with non-AI revenue growth in the high 20s% year-over-year.

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

• Over 100 new AI-driven capabilities launched, including Bits AI expansion, Datadog for AI, Infinite Cardinality Metrics, and the acquisition of Adaptive ML.

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% last quarter.

• Non-GAAP operating income was $257 million (23% margin), while GAAP operating income was $5 million (0% margin).

• Billings reached $1.18 billion, up 38% year-over-year; RPO was $3.47 billion, up 43%.

• Cash, cash equivalents, and marketable securities totaled $5.0 billion at quarter end.

Outlook and guidance

• Q3 2026 revenue guidance: $1.135–$1.145 billion (28–29% year-over-year growth); non-GAAP operating income: $260–$270 million (23–24% margin).

• FY 2026 revenue guidance: $4.45–$4.47 billion (30% year-over-year growth); non-GAAP operating income: $1.01–$1.03 billion (23% margin); non-GAAP EPS: $2.50–$2.54.

• Guidance incorporates usage reduction from the largest customer, which may slow growth.

• The company believes existing liquidity and cash flow will support requirements for the next 12 months and beyond.