Datadog Reports 36% Revenue Growth to $1.12 Billion in Latest Quarter

Datadog, Inc. reported significant financial growth in its latest quarterly results, with revenue reaching $1.12 billion for the three months ended June 30, 2026, a 36% increase from $826.8 million in the same period last year. For the first half of 2026, the company generated $2.13 billion in revenue, up 34% from $1.59 billion in the prior year. The company also achieved net income of $44.6 million for the second quarter, compared to $2.6 million in the same quarter of 2025, and $97.1 million for the first half of 2026, up from $27.3 million in the previous year.

The company’s operating expenses increased to $875.9 million in the second quarter, up from $696.3 million a year earlier, driven primarily by higher research and development costs, which rose by 23% to $478 million. Sales and marketing expenses also increased by 30% to $311.5 million. Despite these rising costs, Datadog managed to maintain a gross margin of 79%, slightly down from 80% in the previous year, attributed to increased spending on third-party cloud infrastructure.

Datadog's customer base expanded to approximately 33,400 as of June 30, 2026, up from 31,400 a year prior. Notably, the company reported that around 4,720 customers had an annual run-rate revenue (ARR) of $100,000 or more, representing 91% of its total ARR, an increase from 89% the previous year. The company also noted a dollar-based net retention rate in the low-120% range, indicating strong growth in existing customer accounts, although it acknowledged a reduction in usage from its largest customer starting in the third quarter of 2026.

In terms of strategic developments, Datadog completed three acquisitions during the first half of 2026, totaling approximately $191.5 million, which included cash payments and the issuance of restricted shares. The company continues to invest in expanding its product offerings and geographic presence, particularly in the EMEA and APAC regions, where it aims to increase its market share. As of June 30, 2026, Datadog held $435 million in cash and cash equivalents, alongside $4.55 billion in marketable securities, providing a solid financial foundation for future growth initiatives. Looking ahead, Datadog remains focused on leveraging its land-and-expand business model to drive further customer acquisition and product adoption.