Datadog (DDOG) investor relations material

Executive summary

• Q1 2026 revenue reached $1.1 billion, up 32% year-over-year, surpassing $1 billion for the first time, with net income of $52.6 million and strong growth in both AI-native and non-AI customer cohorts.

• Customer base expanded to 33,200, with 4,550 customers generating $100,000+ ARR, accounting for 90% of ARR and indicating strong traction among large enterprises.

• Free cash flow reached $289 million (29% margin), and operating cash flow was $335 million, reflecting robust liquidity and operational efficiency.

• Platform adoption increased, with 56% of customers using four or more products, and 20% using eight or more.

• Key product launches included MCP Server, Bits AI Security Analyst, Bits Assistant, GPU Monitoring, and Experiments, enhancing platform capabilities.

Financial highlights

• Q1 revenue: $1.01 billion, up 32% year-over-year; gross profit: $807 million; gross margin: 79–80%; operating income: $223 million (non-GAAP), $7 million (GAAP); net income per diluted share: $0.15 (GAAP), $0.60 (non-GAAP).

• Billings: $1.03 billion, up 37% year-over-year; RPO: $3.48 billion, up 51% year-over-year.

• Cash, cash equivalents, and marketable securities totaled $4.8 billion at quarter end.

• Research and development expenses rose 28% to $435.3 million; sales and marketing increased 31% to $279.8 million.

• Stock-based compensation for the quarter was $196.8 million.

Outlook and guidance

• Q2 2026 revenue expected at $1.07–$1.08 billion; non-GAAP operating income: $225–$235 million; non-GAAP EPS: $0.57–$0.59.

• FY 2026 revenue guidance: $4.3–$4.34 billion; non-GAAP operating income: $940–$980 million; non-GAAP EPS: $2.36–$2.44.

• Guidance reflects conservative assumptions, especially for the largest customer.

• Management expects continued investment in innovation, international expansion, and sales and marketing to drive long-term growth.

• Existing liquidity and cash flow expected to support operational needs for the next 12 months and beyond.