Datadog (DDOG) Q3 2026 earnings summary

Executive summary

• Q3 revenue grew 35% YoY to $1.197B, above the high end of guidance.

• Non-AI customer revenue growth accelerated for a fifth consecutive quarter to the high-20% range, while AI customers remained a major growth driver.

• GAAP net income was $118.3M versus $33.9M a year earlier; non-GAAP net income was $304.3M versus $197.4M.

• Cloud migration, digital transformation and AI adoption were cited as long-term growth drivers.

• Usage from the largest customer declined in Q3, creating potential revenue-growth deceleration.

Financial highlights

• Billings were $1.16B, up 30%, and RPO was $3.85B, up 38%.

• GAAP gross profit was $959.9M versus $709.2M; non-GAAP gross profit was $972M.

• GAAP operating income was $74.7M versus a $5.8M loss; non-GAAP operating income was $334.3M versus $207.4M.

• GAAP diluted EPS was $0.32 versus $0.10; non-GAAP diluted EPS was $0.81 versus $0.55.

• New customers contributed 30% of YoY revenue growth, up from 25% in the year-ago quarter; existing customers contributed ~70%.

Outlook and guidance

• Q4 revenue guidance is $1.19B-$1.20B, representing 25%-26% YoY growth; excluding the largest customer, implied growth is in the low-to-mid 30% range.

• Q4 non-GAAP operating income is expected at $280M-$290M; non-GAAP diluted EPS is $0.69-$0.71 on ~379M shares.

• FY2026 revenue guidance is $4.515B-$4.525B, or ~32% YoY growth; non-GAAP operating income is $1.095B-$1.105B at a 24% margin.

• FY2026 non-GAAP diluted EPS guidance is $2.73-$2.75 on ~375M shares; guidance assumes the largest customer meets its minimum Q4 commitment.

• FY2026 guidance includes ~$200M net interest and other income, $30M-$40M cash taxes, a 21% non-GAAP tax rate, and capex plus capitalized software of 3%-4% of revenue; non-GAAP guidance was not reconciled to GAAP.