Datadog, Inc. (DDOG) Announced Q2 2026 Earnings on August 6, 2026, Reporting "revenue was $1.12 billion, an increase of 36% year-over-year"

Datadog, Inc. reported its financial results for the second quarter of fiscal year 2026.

For the second quarter, revenue was $1.12 billion, representing an increase of 36% year-over-year.

Second quarter gross profit was $892 million for a gross margin of 79.6%.

Second quarter non-GAAP operating income was $257 million, representing a 23% operating margin.

Additionally, the company generated second quarter free cash flow of $279 million with a free cash flow margin of 25%.

Olivier Pomel, Co-Founder and CEO, stated that "revenue growth in Q2 has accelerated across our customer base," with non-AI customer revenue growth accelerating to the "high 20s percent year-over-year, up from the mid-20s last quarter and 18% in the year ago quarter."In terms of product and platform adoption, Pomel stated that "58% of our customers now use 4 or more products, up from 52% a year ago" and "13% of our customers use 10 or more products, up from 7% a year ago." At the DASH user conference in June, the company announced "over 100 exciting new products and features," including the expansion of Bits AI to "accelerate and automate the DevOps loop." The company also introduced "Bring Your Own Cloud, or BYOC" to allow customers to run the full Datadog experience on logs within their own infrastructure, as well as "Infinite Cardinality Metrics." Additionally, Pomel highlighted that "over 750 AI customers use Datadog to monitor and improve their tech stacks" and "all 10 of the top 10 AI leaders are Datadog customers."For future outlook, Datadog provided guidance for the third quarter of 2026, expecting third quarter revenue "to be in the range of $1.135 billion to $1.145 billion, which represents a 28% to 29% year-over-year growth," and third quarter non-GAAP operating income "to be in the range of $260 million to $270 million." For the full fiscal year 2026, the company expects full fiscal year revenue "to be in the range of $4.45 billion to $4.47 billion, which represents a 30% year-over-year growth," and full fiscal year non-GAAP operating income to be in the range of $1.01 billion to $1.03 billion.

Chief Financial Officer David Obstler noted that "Regarding our largest customer, we have seen a usage reduction, which is incorporated in our Q3 and full year 2026 guidance." Pomel added that they "did chose to fully derisk our largest customer" to ensure this change does not overshadow the acceleration seen elsewhere in the business.