The observability platform's AI integrations now touch 80% of its annual recurring revenue, signaling where enterprise tech budgets are heading
Datadog’s Q1 2026 results set the stage for what’s shaping up to be a banner year. Revenue hit $1.006 billion for the quarter, a 32% jump compared to the same period a year earlier. That marked the first time the company crossed the billion-dollar mark in a single quarter.
Non-GAAP operating income came in at $223 million, translating to a 22% margin.
For Q2 2026, management guided revenue between $1.07 billion and $1.08 billion, with non-GAAP operating income expected in the range of $225 million to $235 million. Wall Street consensus largely agrees, pegging Q2 revenue at approximately $1.08 billion, which would represent a 30.6% year-over-year increase. Adjusted earnings per share are estimated at $0.58, up 26.1% from the prior year.
The company also raised its full-year fiscal 2026 guidance.
Roughly 20% of Datadog’s customers are now using AI integrations. Those AI-adopting customers represent approximately 80% of the company’s annual recurring revenue.
Recent product launches include the MCP Server, a Bits AI Security Agent, and GPU Monitoring capabilities.
Datadog’s Q2 2026 earnings are scheduled for release on August 6, 2026, with a conference call at 8:00 a.m. EDT.
