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Datadog's Large Customer Base Grows: Is Revenue Momentum Building?
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Key Takeaways
Datadog's $100,000-plus ARR customers rose 23% to about 4,720, contributing 91% of total ARR.
Enterprise new-logo bookings more than doubled, while new customers drove about 30% of Q2 revenue growth.
Datadog expects Q3 2026 revenues of $1.135-$1.145 billion as customers expand platform usage.
Datadog (DDOG - Free Report) is seeing strong growth in its large customer base, with customers generating at least $100,000 in ARR rising 23% year over year to approximately 4,720 as of June 30, 2026. These accounts contributed about 91% of total ARR, up from 89% a year earlier, strengthening the company’s high-value recurring revenue base.
Datadog is also gaining momentum in enterprise sales. New-logo annualized bookings in the enterprise segment more than doubled year over year, while new customers contributed about 30% of year-over-year revenue growth in the second quarter. The company’s AI customer base is also becoming more valuable, with more than 750 AI customers, including 31 spending over $1 million annually and eight spending over $10 million annually.
Importantly, large customers are expanding their use of the platform. A Fortune 100 insurer is expected to use 19 Datadog products, while a major online media company signed a multiyear deal worth more than $30 million in TCV. Datadog’s low-120% net revenue retention also reflects continued expansion from existing customers.
Looking ahead, Datadog expects third-quarter 2026 revenues of $1.135-$1.145 billion, suggesting continued momentum following the strong second-quarter performance. The outlook provides further support for the company’s growth trajectory as its large customer base expands and existing customers increase platform usage.
Taking a Look at DDOG’s Competitors
The customer base remains a key battleground in observability, with Datadog, Dynatrace and Elastic pursuing different strategies to attract, retain and expand enterprise customers.
Dynatrace (DT - Free Report) competes with Datadog’s broader 33,400-customer base through an enterprise-focused strategy, adding 122 new logos and achieving more than 160% new-logo ARR growth. Dynatrace’s unified AI-powered observability, open interoperability and platform-consolidation approach support larger customer lands, while average ARR per customer exceeds $500,000. Dynatrace’s mid-90s gross retention and 110% NRR strengthen expansion opportunities.
Elastic’s (ESTC - Free Report) growing base of high-value customers strengthens its competitive position against Datadog, with more than 1,720 customers exceeding $100,000 ACV and over 240 above $1 million. Elastic emphasizes multiyear commitments without material changes in discount practices, while AI, search, security and observability broaden its opportunity. The company’s data gravity, context platform and specialized agents support consolidation, helping Elastic deepen customer relationships.
Shares of DDOG have surged 77.2% year to date, outperforming the broader Zacks Computer and Technology sector's growth of 18.3%.
DDOG’s YTD Price Performance
Image Source: Zacks Investment Research
Datadog trades at a premium with a Price-to-Book (P/B) ratio of 19.64 compared to the broader Zacks Internet – Software industry's multiple of 5.01. DDOG carries a Value Score of F.
DDOG’s Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for DDOG’s 2026 earnings is currently pegged at $2.43 per share, increased by 2 cents over the past 30 days. The company reported earnings of $2.05 per share in 2025.
View the Zacks #1 Rank List
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Datadog's Large Customer Base Grows: Is Revenue Momentum Building?
Key Takeaways
Datadog (DDOG - Free Report) is seeing strong growth in its large customer base, with customers generating at least $100,000 in ARR rising 23% year over year to approximately 4,720 as of June 30, 2026. These accounts contributed about 91% of total ARR, up from 89% a year earlier, strengthening the company’s high-value recurring revenue base.
Datadog is also gaining momentum in enterprise sales. New-logo annualized bookings in the enterprise segment more than doubled year over year, while new customers contributed about 30% of year-over-year revenue growth in the second quarter. The company’s AI customer base is also becoming more valuable, with more than 750 AI customers, including 31 spending over $1 million annually and eight spending over $10 million annually.
Importantly, large customers are expanding their use of the platform. A Fortune 100 insurer is expected to use 19 Datadog products, while a major online media company signed a multiyear deal worth more than $30 million in TCV. Datadog’s low-120% net revenue retention also reflects continued expansion from existing customers.
Looking ahead, Datadog expects third-quarter 2026 revenues of $1.135-$1.145 billion, suggesting continued momentum following the strong second-quarter performance. The outlook provides further support for the company’s growth trajectory as its large customer base expands and existing customers increase platform usage.
Taking a Look at DDOG’s Competitors
The customer base remains a key battleground in observability, with Datadog, Dynatrace and Elastic pursuing different strategies to attract, retain and expand enterprise customers.
Dynatrace (DT - Free Report) competes with Datadog’s broader 33,400-customer base through an enterprise-focused strategy, adding 122 new logos and achieving more than 160% new-logo ARR growth. Dynatrace’s unified AI-powered observability, open interoperability and platform-consolidation approach support larger customer lands, while average ARR per customer exceeds $500,000. Dynatrace’s mid-90s gross retention and 110% NRR strengthen expansion opportunities.
Elastic’s (ESTC - Free Report) growing base of high-value customers strengthens its competitive position against Datadog, with more than 1,720 customers exceeding $100,000 ACV and over 240 above $1 million. Elastic emphasizes multiyear commitments without material changes in discount practices, while AI, search, security and observability broaden its opportunity. The company’s data gravity, context platform and specialized agents support consolidation, helping Elastic deepen customer relationships.
DDOG’s Share Price Performance, Valuation & Estimates
Shares of DDOG have surged 77.2% year to date, outperforming the broader Zacks Computer and Technology sector's growth of 18.3%.
DDOG’s YTD Price Performance
Image Source: Zacks Investment Research
Datadog trades at a premium with a Price-to-Book (P/B) ratio of 19.64 compared to the broader Zacks Internet – Software industry's multiple of 5.01. DDOG carries a Value Score of F.
DDOG’s Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for DDOG’s 2026 earnings is currently pegged at $2.43 per share, increased by 2 cents over the past 30 days. The company reported earnings of $2.05 per share in 2025.
Image Source: Zacks Investment Research
Datadog stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.