Datadog, Inc.

Good day and thank you for standing by. Welcome to the Q2 2026 Datadog Earnings Conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Yuka Broderick, Senior Vice President of Investor Relations. Please go ahead.

Thank you, Lauren. Good morning, and thank you for joining us to review Datadog's second quarter 2026 financial results, which we announced in our press release issued this morning. Joining me on the call today are Olivier Pomel, Datadog's co-founder and CEO, and David Obstler, Datadog's CFO. During this call, we will make forward-looking statements, including statements related to our future financial performance, our outlook for the third quarter and the fiscal year 2026 and related notes and assumptions, our product capabilities, and our ability to capitalize on market opportunities. The words anticipate, believe, continue, estimate, expect, intend, will, and similar expressions are intended to identify forward-looking statements or similar indications of future expectations. These statements reflect our views today and are subject to a variety of risks and uncertainties that could cause actual results to differ materially. For a discussion of the material risks and other important factors that could affect our actual results, please refer to our Form 10-Q for the quarter ended March 31, 2026. Additional information will be made available on our upcoming Form 10-Q for the fiscal quarter ending June 30, 2026 and other filings with the SEC. This information is also available in the Investor Relations section of our website along with a replay of this call. We will discuss non-GAAP financial measures, which are reconciled to their most directly comparable GAAP financial measures, in the tables in our earnings release. which is available at investors.datadoghq.com. With that, I'd like to turn the call over to Olivier.

Thanks, Yuka, and thank you all for joining us to go over our Q2 results. Let me begin with this quarter's business drivers. Our revenue growth in Q2 has accelerated across our customer base. On one hand, our AI-native customer cohort continues to grow and diversify both in the number of customers we serve and the scale of those customers. But on the other hand, and as a great illustration of the breadth of trends across our business, revenue growth for our non-AI customers also accelerated again this quarter to the high 20% year-over-year, up from the mid-20s last quarter and 18% in the year-over-quarter. Overall, we continue to see healthy trends in customer demand. Our broad base of customers, from the most nimble startups to the largest and most established enterprises, are all adopting AI. We think this is accelerating their usage of cloud and modern technologies, as well as their usage of the Datadog platform to observe, secure, and act on their cloud and AI workloads. Regarding our Q2 financial performance and key metrics, revenue was $1.12 billion, an increase of 36% year-over-year and above the high end of our guidance range. We ended Q2 with about 33,400 customers, up from about 31,400 a year ago, We also ended with about 4,720 customers with an ARR of $100,000 or more, up from about 3,850 a year ago. These customers generated about 91% of our ARR. And we generated free cash flow of $279 million, with a free cash flow margin of 25%.