Datadog Q4 Earnings Lift Outlook

Datadog Inc. (DDOG) reported accelerating customer growth and stronger cash generation in its fourth-quarter earnings on Feb. 10, 2026. The company issued fiscal 2026 revenue guidance that supports its outlook for continued expansion.

Q4 Results and Cash Flow

Datadog’s revenue in the fourth quarter reached $953 million, up 29% year-over-year and exceeding prior guidance of $912 million to $916 million, the company said in a press release. GAAP operating income was $9 million, while the non-GAAP operating margin stood at 24%. These operational improvements contributed to the company’s revised outlook for 2026.

For the full year 2025, revenue rose 28% to $3.43 billion. Operating cash flow totaled $1.05 billion, with free cash flow at $915 million. At year-end, Datadog held $4.47 billion in cash, cash equivalents, and marketable securities, alongside total assets of $6.64 billion. Management cited these cash-generation figures and liquidity as evidence of the company’s financial flexibility.

On a quarterly basis, operating cash flow was $327 million, and free cash flow was $291 million, representing a 31% free-cash-flow margin. Management highlighted this cash conversion as proof that revenue growth is translating into liquidity.

Billings, Customers, and Guidance

The earnings call confirmed billings of $1.21 billion for the quarter, a 34% increase year-over-year, and a customer base of 32,700, up from about 30,000 a year earlier. Among these, 4,310 customers generated more than $100,000 in annual recurring revenue (ARR), accounting for roughly 90% of ARR. The number of customers with over $1 million in ARR rose 31% year-over-year to 603, signaling expansion within higher-value accounts.

Datadog’s guidance for fiscal 2026 projects revenue between $4.06 billion and $4.10 billion, with non-GAAP operating income of $840 million to $880 million. Non-GAAP net income per share is expected between $2.08 and $2.16, based on approximately 372 million diluted shares. Management framed this guidance as a baseline for continued investment in product and sales while improving non-GAAP profitability.

The company also highlighted new product developments, including Bits AI SRE Agent, Storage Management, Feature Flags, and the general availability of Data Observability. Feature Flags integrates observability with feature management to automate rollouts and rollbacks, following Datadog’s acquisition of Eppo. These initiatives aim to deepen usage within large customers and accelerate software delivery practices that could drive further monetization.

Together, rising billings, a growing cohort of high-ARR customers, and strong cash conversion underpin the company’s guidance and support its push into AI-driven observability and software-delivery tools.

"We are pleased with our strong execution in fiscal year 2025," said Olivier Pomel, co-founder and CEO, in the press release.