Computed from published fixed rules, not a model's judgement — though one input, the count of high-severity risks, comes from the AI analysis below.
Not investment advice and not a price target: it scores the quarter's fundamentals, not the stock. Full methodology →
AI Takeaway
Datadog delivered strong Q1 FY2026 results with revenue surging 32.2% YoY to $1.006B, crossing the $1B quarterly milestone, while swinging to positive operating income of $7.3M and more than doubling net income to $52.6M.
Revenue
$1.01B
+32.15% YoY
EPS (Diluted)
$0.15
+114.29% YoY
Gross Margin
79.2%
-0.1 pts YoY
Operating Income
$7.33M
+158.99% YoY
Source: SEC XBRL
Datadog (DDOG) reported Q1 FY2026 revenue of $1.01B, up 32.2% year over year. Operating margin was 0.7%, against -1.6% a year earlier. Operating cash flow was $334.62M, up 23.2% year over year. DDOG's fiscal Q1 FY2026 corresponds to calendar Q1 2026.
Last 4 quarters: 4 beats
| Quarter | Actual EPS (USD) | Consensus (USD) | Result |
|---|---|---|---|
| Jun 2026 | 0.65 | 0.60 | Beat +8.0% |
| Mar 2026This filing | 0.60 | 0.52 | Beat +15.9% |
| Dec 2025 | 0.59 | 0.57 | Beat +4.3% |
| Sep 2025 | 0.55 | 0.47 | Beat +15.9% |
Adjusted (non-GAAP) EPS of $0.60 versus the $0.52 analyst consensus — a +15.9% beat for Mar 2026. Analyst consensus is quoted on the adjusted (non-GAAP) basis the street uses. GAAP diluted EPS for this quarter was $0.15.
Compiled by AI from this SEC filing
Datadog generated $1.006B in revenue in Q1 FY2026, up 32.2% YoY from $761.6M, marking a significant milestone as the company surpasses $1B in quarterly revenue for the first time, reflecting continued strong demand for its cloud monitoring and observability platform.
Source: 10-Q Income Statement
Operating income turned positive at $7.3M (operating margin of 0.73%) compared to an operating loss of $12.4M in Q1 FY2025, representing a 159% YoY improvement and demonstrating improving operational leverage even as the company continues to invest heavily in growth.
Source: 10-Q Income Statement
R&D expenses grew 27.6% YoY to $435.3M, representing approximately 43% of revenue, underscoring Datadog's commitment to product innovation and platform expansion across its AI, security, and observability offerings.
Source: 10-Q Income Statement
Total assets grew 15.7% YoY to $6.95B, stockholders' equity expanded 36.7% to $3.99B, and the current ratio stands at a healthy 3.40x, indicating a very strong liquidity position with current assets of $5.63B well exceeding current liabilities of $1.66B.
Source: 10-Q Balance Sheet
Operating cash flow increased 23.2% YoY to $334.6M, reflecting the company's ability to convert revenue growth into cash, though cash and equivalents declined 60.5% YoY to $426.4M, likely reflecting deployment into investments and other assets.
Source: 10-Q Cash Flow Statement
Compiled by AI from this SEC filing · 2 high, 3 medium, 0 low
R&D expenses of $435.3M represent ~43% of revenue, keeping operating margins razor-thin at 0.73%. Sustained heavy investment in product development is necessary to maintain competitive differentiation but limits near-term earnings power and leaves little margin buffer if revenue growth decelerates.
Source: 10-Q Income Statement
While 32.2% YoY revenue growth is impressive at $1B+ scale, maintaining this trajectory requires continuous expansion of the customer base and upselling existing customers on additional platform modules. Any slowdown in cloud spending by enterprise customers or increased competition could pressure growth rates.
Source: 10-Q Income Statement
Cash and equivalents fell sharply by 60.5% YoY to $426.4M, a significant reduction from $1.08B a year ago. While total current assets remain robust at $5.63B (suggesting funds are deployed in short-term investments), the decline in liquid cash warrants monitoring for capital allocation priorities.
Source: 10-Q Balance Sheet
Datadog's business is closely tied to enterprise cloud adoption and AI infrastructure spending. Any macroeconomic downturn, cloud optimization cycles by hyperscalers, or shifts in AI investment priorities could directly impact customer spending on Datadog's platform and slow revenue growth.
Source: 10-Q Income Statement
Despite strong revenue growth, net margin stands at only 5.2% ($52.6M net income on $1.006B revenue), meaning the company has limited earnings cushion. Cost of revenue grew 32.7% YoY, slightly outpacing revenue growth of 32.2%, indicating gross margin compression risk if scale benefits do not materialize.
Source: 10-Q Income Statement
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue $B | 1.01 $B | 0.76 $B | +32.15% |
Cost of Revenue $M | 209.23 $M | 157.63 $M | +32.74% |
Gross Profit $M | 797.20 $M | 603.93 $M | +32.00% |
Operating Income $M | 7.33 $M | -12.42 $M | +158.99% |
Net Income $M | 52.57 $M | 24.64 $M | +113.35% |
EPS (Basic) $ | 0.15 $ | 0.07 $ | +114.29% |
EPS (Diluted) $ | 0.15 $ | 0.07 $ | +114.29% |
R&D Expense $M | 435.30 $M | 341.06 $M | +27.63% |
Answers draw on this SEC filing and the data on this page
Datadog delivered strong 36% revenue growth and a sharp improvement in profitability in Q2 FY2026, but its largest customer reducing usage and rising infrastructure costs pose challenges ahead.
Datadog delivered strong FY2025 revenue growth of 27.7% to $3.43B, but swung to an operating loss of $44.4M as R&D spending surged 34.3%, while net income declined 41.4% to $107.7M and operating cash flow remained robust at $1.05B.
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