DDOG · Q2 2026 Earnings

Bullish

Datadog

Reported August 6, 2026

30-second summary

Datadog printed $1.12B in Q2 (+36% YoY, +3.7% above the $1.08B consensus and $40M above the high end of its own guide), with non-GAAP EPS of $0.65 beating consensus $0.58 by 12.1% — and management raised FY26 revenue to $4.45–4.47B (a $130M midpoint lift after Q1's $240M lift) and FY26 EPS to $2.50–2.54. The clean signal: 36% YoY growth in Q2 accelerated from Q1's 32%, non-GAAP operating margin sprang from 22% to 23% (+100bps above the ~21% implied Q2 guide), and FCF margin printed at 25%. The hedge worth pricing: the Q3 revenue guide of $1.135–1.145B implies only 27.6–28.7% YoY growth against Q3 FY25's $0.89B — a 7+ point sequential deceleration in reported growth that either reflects Datadog-standard conservatism or the first sign the AI-cohort velocity is normalizing.

Headline numbers

EPS

Q2 FY2026

$0.65

+12.1% vs est.

Revenue

Q2 FY2026

$1.12B

+36.0% YoY

+3.7% vs est.

Gross margin

Q2 FY2026

80.0%

Free cash flow

Q2 FY2026

$0.28B

Operating margin

Q2 FY2026

23.0%

Key financials

Q2 FY2026

Metric	Q2 FY2026	Q2 FY2025	YoY	Q1 FY2026	QoQ
Revenue	$1.12B	$0.83B	+35.4%	$1.01B	+11.3%
EPS	$0.65	$0.46	+41.3%	$0.60	+8.3%
Gross margin	80.0%	80.0%	+0bps	80.0%	+0bps
Operating margin	23.0%	-4.0%	+2700bps	22.0%	+100bps
Free cash flow	$0.28B	$0.17B	+69.7%	$0.29B	-3.1%

Guidance

Datadog raised full-year FY2026 revenue to $4.45–$4.47B and EPS to $2.50–$2.54 after beating Q2 expectations on both metrics; Q2 revenue of $1.12B and EPS of $0.65 exceeded guidance with 36% YoY growth.

Guidance is issued for both next quarter and the full year. Both may appear below.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Revenue	Q2 FY2026	$1.07 billion to $1.08 billion	$1.12 billion	+$0.04 billion above guidance high end	Beat
Non-GAAP EPS	Q2 FY2026	$0.57 to $0.59	$0.65	+$0.06 above guidance high end	Beat
Non-GAAP operating income	Q2 FY2026	$225 million to $235 million	$257.6 million	+$22.6 million above guidance high end	Beat

New guidance

Metric	Period	Guide	YoY
Revenue	Q3 FY2026	$1.135 billion to $1.145 billion	+27.6% to +28.7% YoY
Non-GAAP EPS	Q3 FY2026	$0.63 to $0.65	—
Non-GAAP operating income	Q3 FY2026	$260 million to $270 million	—

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Revenue	FY 2026	$4.30 billion to $4.34 billion	$4.45 billion to $4.47 billion	+$0.13–$0.15 billion at midpoints	Raised
Non-GAAP EPS	FY 2026	$2.36 to $2.44	$2.50 to $2.54	+$0.10 at high end, +$0.14 at low end	Raised
Non-GAAP operating income	FY 2026	$940 million to $980 million	$1.01 billion to $1.03 billion	+$0.03–$0.09 billion	Raised

Platform metrics

Q2 FY2026

Segment	Q2 FY2026	Q2 FY2025	YoY
$100k+ ARR customers	4,720	—	—
Revenue YoY growth	36%	—	—

Profitability

Q2 FY2026

Segment	Q2 FY2026	Q2 FY2025	YoY
Non-GAAP operating margin	23%	—	—
Free cash flow margin	25%	—	—

Management tone

Q3-25 acceleration broadens to base business → Q4-25 platform consolidation and cautious FY26 setup → Q1-26 AI elevated to co-equal secular driver, FY26 ripped open → Q2-26 AI reframed from cohort to operating model, but disclosure narrows.

Note: no earnings call transcript is available for this quarter; tone analysis below is drawn from the press-release qualitative statements only.

AI framing completed its rotation from cohort disclosure to operating-model narrative. Two quarters ago the press release led with $1M+ ARR customer counts as the AI-cohort replacement metric; last quarter it led with non-AI customer acceleration and hyperscaler training wins as parallel proofs; this quarter's press release qualitative statements pivot to "customers are building and deploying with AI, and they are using the Datadog platform to observe, secure, and act on their AI-enabled solutions" and "increasingly build autonomy into their operations." AI is no longer a customer segment; it is the description of what customers do. That is cleaner marketing, but it also removes the ability to falsify concentration risk against a specific cohort disclosure.

Disclosure curation reached its narrowest point in the coverage window. The Q1 brief celebrated the reintroduction of non-AI customer growth (~20% YoY) as the disclosure that defused concentration risk. This quarter's press release contains none of it — no non-AI growth cut, no $1M+ ARR customer count, no update on training-workload contribution, no update on hyperscaler wins. The 4,720 $100K+ ARR customer count is the only granular customer datapoint. Without a transcript, three of the six Q1 watch items cannot be resolved on this print — a structural gap in the coverage that management has now sustained for two consecutive press releases (Q4 was similar).

The FY26 raise pattern signals the Q1 conservatism reset was largely one-and-done. Q1's raise added $240M to the FY26 midpoint; Q2's added $130M. Half the size, on a bigger beat (36% YoY vs Q1's 32%). Read charitably, management is now guiding closer to actual expectations; read cautiously, the room for continued 30%+ growth surprises is compressing. The FY26 revenue midpoint of $4.46B implies H2 FY26 revenue of ~$2.34B, or ~$1.17B per quarter — meaning Q4 would need to print roughly flat with the Q3 guide midpoint. That is either conservatism holding two quarters ahead, or a genuine flattening view.

Answers to last quarter's watch list

Whether Q2 revenue clears the $1.08B high end and prints above $1.10B. Q2 came in at $1.12B, $40M above the high end and $20M above the $1.10B threshold — a 3.7% beat vs Q1's 4.7% beat. Decisive answer that 32% was not a peak; 36% is the new peak, and the beat pattern remains intact.

Resolved positively

Whether the FY26 revenue guide gets raised again on the Q2 call, and by how much. Yes, but by $130M midpoint vs Q1's $240M — meaningfully smaller. The FY26 growth rate lifted from 25–27% to ~30% at midpoint, essentially restoring the FY25 trajectory. The absolute dollar raise being roughly half of Q1's suggests the Q1 reset pulled forward most of the initial conservatism, which was the cautious read Tapebrief flagged. Status: Resolved positively (raise happened) but with the caveat that the smaller magnitude is the story.

Whether non-AI customer growth holds at 20%+ YoY in Q2. The press release did not refresh the non-AI customer growth disclosure. Management called it out explicitly in Q1; the Q2 press release replaced it with generic AI-adoption language. Without a transcript, this cannot be resolved.

Not resolved

Whether the $1M+ ARR customer count returns to disclosure and sustains +25%+ growth. The $1M+ ARR count was not disclosed in the press release for the second consecutive quarter. The 4,720 $100K+ ARR customer count (+23% YoY, accelerating from +21%) is the only refreshed customer-tier datapoint. The pattern is now clear: management has curated the $1M+ cut out of the press-release disclosure framework.

Resolved negatively

First quantified training-workload revenue contribution. No training-workload revenue disclosure in the press release. The narrative pivoted to generic AI-adoption framing rather than the specific hyperscaler training wins Q1 named.

Not resolved

Whether non-GAAP gross margin holds at 80% or compresses further. Held at 80% for the third consecutive quarter. Not below 79.5%, not back to 81% — a stable-but-tapped-out signal, consistent with AI-workload intensity offsetting the cloud-efficiency upside from H1 2025. Status: Resolved positively (held the floor).

What to watch into next quarter

Whether Q3 revenue clears the $1.145B high end and prints above $1.17B. Q2 beat the high end by $40M (3.7%); a similar beat on Q3 would imply ~$1.185B (~33% YoY), still a step-down from Q2's 36%. Anything inside the $1.135–1.145B range (i.e. 27.6–28.7% YoY) would be the first non-material beat in six quarters and validate the deceleration read.

Whether the FY26 revenue guide gets raised a third time and by how much. The raise cadence has stepped from +$240M (Q1) to +$130M (Q2). A Q3 raise of ~$60–80M midpoint would extend the pattern of halving; anything above $100M would reopen the case that FY26 growth can hold above 30%. A reaffirm would confirm the deceleration.

Whether $100K+ ARR customer growth holds above 20% YoY. Four consecutive quarters of acceleration: +16.3% → +19% → +21% → +23%. This is now the primary customer-tier signal management is willing to publish. A step-down toward the high teens in Q3 would be the first inflection in the large-deal motion in over a year.

Whether any transcript-derived commentary refreshes the non-AI growth, $1M+ ARR, or training-workload metrics. Two consecutive press-release-only prints have skipped these. If the Q3 call transcript restores them, the disclosure narrowing thesis softens; if the call also omits them, the practical effect is that concentration risk becomes structurally unmeasurable from outside the company.

Whether Q3 non-GAAP operating margin holds above 23%. Q2 printed 23% and Q3 is guided to ~23% ($260–270M on $1.135–1.145B revenue). A Q3 beat that lands at 24%+ would push the FY26 operating margin above the implied 22.7% midpoint; a print at or below 22% would suggest hiring is catching up to revenue.

Whether share count guidance stays at ~376M or drifts higher again. Q4 FY25 guided ~372M for FY26; this quarter that lifted to ~376M. Another 2–4M lift in Q3 would confirm dilution is running above the buyback-free base case, compressing FY26 EPS growth relative to operating income growth.

Sources

Datadog Q2 2026 press release (8-K exhibit 99.1, filed with SEC): https://www.sec.gov/Archives/edgar/data/1561550/000162828026053829/ex-991x20260630x8k.htm
Datadog Q1 FY2026 Tapebrief (prior-quarter guide baselines and watch list).

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