DDOG

MD&A summary generating — check back in a moment.

Summary generating — check back in a moment.

Summary generating — check back in a moment.

Revenue grew 32% year-over-year to $1.01 billion in Q1 2026, with roughly 75% of the increment coming from existing customers and 25% from new logos. The customer base expanded to 33,200, and the trailing 12-month dollar-based net retention rate moved from high-110% to low-120%, driven by accelerating usage growth. The 4,550 customers with ARR above $100K now represent 90% of total ARR, up from 88% a year ago, underscoring the continued concentration of revenue in larger, expanding accounts. Gross margin held flat at 79% as cloud infrastructure hosting costs scaled proportionally with revenue, absorbing a $41.8 million increase in third-party hosting spend. Operating leverage is emerging below the gross line: R&D fell two points to 43% of revenue, and G&A dropped a point to 7%, pushing the company from a $12.4 million operating loss to a $7.3 million operating profit. GAAP net income doubled to $52.6 million, and free cash flow grew to $289 million from $244 million, supported by stronger deferred revenue build and accounts payable timing. Total stock-based compensation of $196.8 million remains a significant drag on GAAP results, though the trajectory of operating leverage is clearly positive. Management is flagging macro uncertainty, specifically trade policy shifts, tariffs, and ongoing geopolitical conflicts, as potential headwinds to IT spending, noting that subscription-model revenue may delay visibility into any demand softening. International revenue dipped to 28% of total from 30%, suggesting North America is growing faster. Product adoption depth continues to strengthen, with customers using six or more products jumping from 28% to 35% year-over-year and ten-or-more users nearly doubling from 6% to 11%, which anchors the land-and-expand engine that management views as the primary long-term growth lever.

Datadog reported Q1 2026 financial results via press release on May 7, 2026, covering the quarter ended March 31, 2026. The actual figures are in Exhibit 99.1, which is furnished but not filed for Exchange Act liability purposes.

Datadog completed its redomiciliation from Delaware to Nevada, effective April 21, 2026, following stockholder approval at a special meeting where 332.2 million votes were cast in favor versus 199.6 million against. The conversion involved filing a certificate of conversion in Delaware and articles of incorporation in Nevada, adopting new Nevada bylaws, and entering updated indemnification agreements with all officers and directors, while share counts, trading symbol, and business operations remain unchanged.