Q2 2026 Datadog Inc Earnings Call Transcript
Key Points
- Datadog Inc (DDOG) reported Q2 revenue of $1.12 billion, up 36% year-over-year, exceeding the high end of its guidance range.
- Revenue growth for non-AI customers accelerated to the high 20s% year-over-year, up from the mid-20s% last quarter and 18% in the year-ago quarter.
- The company saw strong platform adoption, with 58% of customers using four or more products, up from 52% a year ago, and 13% using 10 or more products, up from 7%.
- New logo annualized bookings in the enterprise segment more than doubled from a year ago, and new customers are ramping faster, contributing to about 30% of year-over-year revenue growth.
- Datadog Inc (DDOG) closed several significant deals, including a nine-figure renewal with a leading AI company and a multi-year over $30 million TCV deal with a major online media company.
- The company's AI-native customer cohort grew to over 750 customers, including 31 customers spending more than $1 million annually and eight spending over $10 million.
- Datadog Inc (DDOG) was named a leader in the 2026 Gartner Magic Quadrant for Observability Platforms for the sixth consecutive year.
- Datadog Inc (DDOG) experienced a usage reduction from its largest customer, which is incorporated into Q3 and full-year 2026 guidance, potentially impacting growth rates.
- The company's Q3 revenue guidance of $1.135 billion to $1.145 billion implies a year-over-year growth rate of 28% to 29%, a deceleration from the 36% growth in Q2.
- Gross margin declined to 79.6% in Q2, down from 80.2% in the previous quarter and 80.9% in the year-ago quarter.
- The company's total customer count saw a weaker quarter for new customer additions, particularly at the low end of the market, which may indicate variability in smaller customer acquisition.
- The company noted that the largest customer's usage reduction was deliberately de-risked in guidance, but this creates uncertainty about future revenue from this key account.
- While the company is investing heavily in AI-related products and research, the market is evolving rapidly, and there is a risk that these investments may not yield the expected returns or that customer needs may shift.
Good day, and thank you for standing by. Welcome to the Q2 2026 Datadog earnings conference call. (Operator Instructions) Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Yuka Broderick, Senior Vice President of Investor Relations. Please go ahead.
Thank you, Lauren. Good morning, and thank you for joining us to review Datadog's second-quarter 2026 financial results, which we announced in our press release issued this morning. Joining me on the call today are Olivier Pomel, Datadog's Co-Founder and CEO; and David Obstler, Datadog CFO.
During this call, we will make forward-looking statements, including statements related to our future financial performance, our outlook for the third quarter and the fiscal year 2026 and related notes and assumptions, our product capabilities, and our ability to capitalize on market opportunities. The words anticipate, believe, continue, estimate, expect, intend, will,
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