- Company name
- Datadog
- Sector
- Software: observability and security platform
- About
- Datadog sells a cloud platform that monitors the applications, servers, cloud services, logs, AI models and security of its customers. Engineers use it to find and fix problems in their software. Customers pay subscriptions, and much of the revenue depends on how much data they send to the platform. At September 30, 2026, Datadog had about 33,500 customers, of which about 4,860 had annual recurring revenue of $100,000 or more. In the first nine months of 2026, revenue was $3,325 million, and 73% came from North America. Datadog had about 8,100 employees at December 31, 2025. The company moved its legal domicile from Delaware to Nevada on April 21, 2026. Its Class A shares trade on the Nasdaq. The head office is in New York. Olivier Pomel, a co-founder, is Chief Executive Officer.
- Thesis
- Datadog trades close to its intrinsic value because investors weigh its fast growth and high cash flow against two risks: a fall in usage by its largest customer, and the chance that AI tools change how companies monitor their software. In Q3 2026, revenue rose 35% to $1,197 million and free cash flow was $251 million, but Datadog expects Q4 2026 revenue of only $1.19 billion to $1.20 billion. For the value to rise, three things must be true. Revenue must keep growing by more than 20% a year in 2027, after the largest customer reduced its usage in Q3 2026. The trailing 12-month dollar-based net retention rate, in the low 120%s at September 30, 2026, must stay high. Free cash flow must grow faster than stock-based compensation, which was $654 million in the first nine months of 2026. The Q4 2026 report and the 2027 guidance, expected in early February 2027, are the next tests. A large customer that moves to its own tools can slow growth for several quarters.
- Risks
- Revenue depends on usage. The largest customer reduced its usage in Q3 2026, and the 10-Q says that this may slow revenue growth. The AI-native customers added high single digit percentage points to revenue growth in Q3 2026, and they can optimize their usage.
Competition is strong. Cloud providers, open-source tools and other software companies sell monitoring and security products, and AI tools can make some products cheaper to build.
Stock-based compensation was $654 million in the first nine months of 2026. It is a real cost to shareholders, and GAAP operating margin was only 3% in the period.
A security breach or a long outage of the platform can harm the trust of customers.
Each Class B share has ten votes and each Class A share one vote, so the founders and early holders keep more control than their share of the equity.
- Balance sheet
- Cash: $5.2B
Debt: $1.0B
Net cash: $4.2B
Last debt due: 2029
Datadog has much more cash than debt. At September 30, 2026, cash, cash equivalents and marketable securities were $5,234 million. The only debt was $1,000 million of 0% convertible senior notes due December 1, 2029, with a carrying value of $987 million. Operating lease liabilities were $321 million. In the first nine months of 2026, operating cash flow was $940 million and free cash flow $818 million, and Datadog paid $116 million for acquisitions. Datadog pays no dividend. On October 28, 2026, it had 337,307,033 Class A shares and 23,735,512 Class B shares.
As of 2026-09-30.
- Checkpoints
- Nov 4, 2026: Q3 2026 results and 2026 guidance. Passed. Watch: Revenue growth of 30% or more and higher 2026 guidance pass; lower guidance fails. Outcome: Revenue rose 35% to $1,197 million, and Datadog raised its 2026 guidance, but the largest customer reduced its usage.
Feb 9, 2027 (estimate): Q4 2026 results and 2027 guidance. Pending. Watch: Q4 revenue of $1.20 billion or more and 2027 revenue guidance of 20% growth or more pass; less fails.
May 2027 (estimate): Q1 2027 results. Pending. Watch: Revenue growth of 20% or more and a stable dollar-based net retention rate pass; a fall in growth below 20% fails.
- Recent events
- 2026-11-04: Datadog reported Q3 2026 results. Revenue rose 35% to $1,197 million, non-GAAP operating margin was 28%, and free cash flow was $251 million. GAAP diluted EPS was $0.32 and non-GAAP diluted EPS $0.81. The 10-Q says that the largest customer reduced its usage in the quarter. Datadog raised its 2026 guidance to revenue of $4.515 billion to $4.525 billion and non-GAAP EPS of $2.73 to $2.75.
2026-08-06: Datadog reported Q2 2026 results. Revenue rose 36% to $1.12 billion, and free cash flow was $279 million. Datadog bought Adaptive ML, an AI company, and launched more than 100 new capabilities at its DASH 2026 conference, including autonomous Bits AI agents for incident response.
2026-04-21: Stockholders approved a plan to move the legal domicile of Datadog from Delaware to Nevada. The change took effect on the same day and did not change the business, the management or the offices.
2026-02-10: Datadog reported 2025 results. Revenue rose 28% to $3.43 billion, and free cash flow was $915 million. At December 31, 2025, 603 customers had annual recurring revenue of $1 million or more. Datadog gave first 2026 guidance of revenue of $4.06 billion to $4.10 billion.