10-Q · May 7, 2026
Datadog reported strong Q1 2026 results with revenues of $1,006 million, a 32% increase year-over-year, and an EPS of $0.60, beating expectations. Management anticipates continued growth, driven by customer expansion…
Earnings analysis · 10-Q
DDOG earnings analysis
Filed November 4, 2026 · Our reading of the company's report
The latest report
Datadog reported a strong Q3 2026, with revenue of $1.197 billion up approximately 6.9% sequentially and 35.1% year over year, while GAAP operating margin expanded to 6.0% from 0.5% in Q2. EPS of $0.81 substantially…
Read full summary
Datadog reported a strong Q3 2026, with revenue of $1.197 billion up approximately 6.9% sequentially and 35.1% year over year, while GAAP operating margin expanded to 6.0% from 0.5% in Q2. EPS of $0.81 substantially exceeded the $0.55 consensus estimate, and free cash flow remained robust at $250.634 million despite declining sequentially. The principal offset is increasing concentration and usage risk from the largest AI-native customer, which reduced usage during the quarter; the filing also highlights cybersecurity, AI regulation, and macroeconomic risks.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $0.81
- Operating margin
- 6.0%
What stood out
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Revenue growth accelerated
Revenue was $1.197 billion, up approximately 6.9% from $1.12 billion in Q2 2026 and approximately 35.1% from $886 million in Q3 2025.
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Operating profitability improved
GAAP operating margin improved to 6.0%, versus 0.5% in Q2 2026 and negative 0.7% in Q3 2025, a 550-basis-point sequential improvement.
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EPS materially exceeded estimates
Reported EPS was $0.81, compared with $0.12 in Q2 2026 and $0.10 in Q3 2025; EPS also exceeded the $0.55 consensus estimate by $0.26.
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Cash generation remained strong
Free cash flow was $250.634 million, down from $306 million in Q2 2026 but up from $235 million in Q3 2025, demonstrating continued substantial cash generation.
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Large liquid investment portfolio
Cash equivalents were $747.1 million and marketable securities were $4.4 billion as of September 30, 2026, providing approximately $5.15 billion of disclosed liquid resources.
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AI cohort supported growth
The AI-native cohort, including the largest customer, contributed high-single-digit percentage points to total year-over-year revenue growth for Q3 2026, while the company disclosed that revenue outside North America represented 27% of nine-month revenue.
What to watch
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Largest customer reduced usage
The company disclosed that its largest customer reduced usage in Q3 2026. The AI-native cohort, which includes that customer, contributed high-single-digit percentage points to total company year-over-year revenue growth, creating concentration and usage-optimization risk.
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Source-code security incident
Datadog disclosed unauthorized third-party access to a number of source-code repositories in April 2025 arising from compromised employee credentials. Although credentials were revoked and access terminated, the company states the incident could increase vulnerability to later attacks.
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AI regulation and investment risk
AI-related regulatory and execution risk was emphasized: the EU Artificial Intelligence Act came into effect in August 2024, and the company is investing in AI infrastructure and personnel without assurance of realizing the anticipated benefits. Compliance may require significant research and development costs.
Management's outlook
The filing does not establish whether the outlook was raised, maintained, or lowered versus the prior company outlook. The reported Q4 2026 outlook was revenue of $1.19 billion-$1.20 billion and non-GAAP EPS of $0.69-$0.71; full-year 2026 outlook was revenue of $4.515 billion-$4.525 billion and non-GAAP EPS of $2.73-$2.75.
Earlier filings 4
10-K · February 18, 2026
Datadog reports continued high-growth scale: revenue increased to $3,428.0 million in 2025 (sum of quarterly revenues $762M + $827M + $886M + $953M) with gross margins roughly stable around ~80% (Q4 2025 gross margin…
10-Q · August 8, 2025
Datadog reported quarter revenue of $826,760,000 (up from $645,279,000 a year ago) with gross profit of $660,782,000, but operating expenses rose to $696,282,000 producing an operating loss of $35,500,000 and GAAP…
10-Q · August 9, 2024
Datadog reported Q2 revenue of $645,279 and GAAP net income of $43,824, reversing a year-ago net loss of $(3,969). Gross profit was $521,780 (about 80.9% of revenue) and operating income was $12,618 versus an operating…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.