Key Highlights

● Second-quarter revenue reached $1.12 billion, up 36 per cent from $826.8 million.

● Free cash flow was $279 million, a 25 per cent margin.

● About 4,720 customers pay at least $100,000 annually, up 23 per cent.

● Full-year revenue guidance is $4.45 billion to $4.47 billion.

The latest verified development

Datadog, Inc. (NASDAQ:DDOG) published its second-quarter 2026 results on 6 August 2026. The cloud observability and security platform reported revenue of $1.12 billion, up 36 per cent from $826.8 million a year earlier. Chief executive Olivier Pomel described it as a strong quarter and said customers were building and deploying with artificial intelligence.

Datadog sells software that lets engineering teams monitor infrastructure, applications, logs and security signals in one place. Its revenue is largely usage-based, so growth depends on customers running more workloads and adding products. The 36 per cent growth rate is notable for a company of this size, since it implies annualised revenue above $4 billion. The figures cover the quarter ended 30 June 2026.

Datadog joined the S&P 500 in July 2025, replacing Juniper Networks, according to the index announcement at the time.

Profitability and cash generation

On a GAAP basis, operating income was $5 million, effectively a zero per cent margin, and diluted earnings per share were $0.12. Non-GAAP operating income was $257 million, a 23 per cent margin, with non-GAAP diluted earnings per share of $0.65. The gap between the two measures reflects the usual adjustments set out in the company's reconciliation.

Operating cash flow was $316 million and free cash flow was $279 million, a 25 per cent free cash flow margin. Cash and marketable securities stood at $5.0 billion at 30 June 2026. That balance gives the company room to invest in product development and acquisitions, and it acquired Adaptive ML, a reinforcement learning operations start-up, to support research into AI observability.

Customers and product momentum

Datadog counted about 4,720 customers with annual recurring revenue of at least $100,000, up 23 per cent from about 3,850 a year earlier. That cohort is a useful indicator of enterprise adoption because larger accounts typically account for the bulk of usage-based revenue.

On the product side, the company announced more than 100 capabilities at its DASH 2026 conference, including autonomous Bits AI incident response and AI Guard, designed to help protect AI agents. Bits Code, Bits Chat and Bits Agent Builder reached general availability. Datadog was also named a Leader in the 2026 Gartner Magic Quadrant for Observability Platforms, its sixth consecutive year in that position.

Guidance for 2026

For the third quarter of 2026, management guided to revenue of $1.135 billion to $1.145 billion and non-GAAP operating income of $260 million to $270 million, with non-GAAP earnings per share of $0.63 to $0.65.

For the full year it expects revenue of $4.45 billion to $4.47 billion, non-GAAP operating income of $1.01 billion to $1.03 billion and non-GAAP earnings per share of $2.50 to $2.54.

Margins, usage and the AI build-out

The full-year range rests on revenue growth staying near the mid-thirties per cent while non-GAAP margins hold around 23 per cent, even as the company funds AI-related products. A larger base of customers paying at least $100,000 a year supports that path.

Because revenue is usage-based, shifts in customers' cloud spending are the general sensitivity that sits beneath every number in the guidance.