Datadog Q1 2026 earnings: revenue growth accelerates to 32%, guidance raised

May 7, 2026 · Published August 7, 2026

Datadog's Q1 2026 revenue grew 32% year-over-year to about $1.01 billion, and the company raised its full-year revenue outlook.

Figures as reported by the company to the SEC for the quarter ended March 31, 2026. Analyst estimates are not part of a filing, so no comparison to expectations is shown.

Key takeaways

• Revenue for the quarter came in at just over $1 billion, up 32% from a year earlier — a faster growth rate than the prior quarter, which the company attributed to broad-based demand from both AI-focused and traditional software customers.
• Datadog ended the quarter with about 4,550 customers generating $100,000 or more in annual recurring revenue, up 21% from a year earlier; those larger customers now account for roughly 90% of total recurring revenue.
• New customer bookings set a record for the quarter, more than doubling from a year ago, including several large deals spanning the company’s observability, security, and data-analytics products.
• Management said artificial intelligence is becoming a genuine growth driver for the business, citing strong adoption both from AI-native companies and from established customers adding AI-related workloads to their existing use of the platform.
• The company generated $335 million in cash from operations and $289 million in free cash flow (cash left over after equipment and other capital spending) during the quarter, indicating the business continues to throw off cash even as it invests in growth.
• Trailing-twelve-month gross margin stood at about 79.5%, meaning Datadog keeps roughly 80 cents of every revenue dollar after the direct cost of running its cloud-monitoring service — a level consistent with software peers and evidence the business scales efficiently as it grows.
• Trailing operating margin was thin, at under 1%, and net profit margin was about 4.5% over the trailing year, showing that heavy spending on R&D, sales, and marketing is still absorbing most of the gross profit even as the top line expands quickly.
• For the second quarter, Datadog guided to revenue of roughly $1.07 billion to $1.08 billion, implying continued year-over-year growth in the high-20s to low-30s percent range.
• The company raised its full-year 2026 revenue outlook to a range of $4.3 billion to $4.34 billion, up from prior guidance, alongside expected non-GAAP operating income of $940 million to $980 million for the year.

Q1 2026 in context

Figures for the quarter ended Mar 2026 and the quarter ended Mar 2025, as reported to the SEC.

How the stock took it

Datadog Inc (Pre-Reincorporation) closed at $143.71 on May 6, 2026, the last session before the report, and at $200.16 on May 8, 2026, the first session after it — +39.3% across the report.

Closes from the market's daily record. Each figure spans the report date — from the last session that closed before it to the first that closed after — because a company may report before the open or after the close.

Financial history →

Sources: company report · earnings call