Datadog Q4 2025: $953M Revenue, 29% Growth — Every Signal Confirmed
Four days after our four-lens preview, Q4 earnings delivered exactly the confirmation our committee identified as the highest-impact catalyst. Revenue accelerated for the fourth consecutive quarter. Non-AI customer growth surged. All three core pillars crossed $1B ARR. No signal classifications changed.
Disclosure: As of 2026-02-10, the Runchey Research Model Trading Fund holds call options in DDOG. Per our Editorial Policy, these are classified as Event-Driven holdings and may be adjusted immediately following the relevant catalyst event. View our full Editorial Integrity & Disclosure Policy.
Our February 6 analysis flagged Q4 2025 earnings as the "single highest-impact data gap" across all four lenses. The data freshness concern — operating with Q3 numbers that were 4+ months old — was the primary reason we held investor posture at PROCEED_WITH_CAUTION rather than upgrading to STANDARD_DILIGENCE.
Q4 delivered. Revenue accelerated to $953M (+29% YoY), the fourth consecutive quarter of acceleration. Non-AI customer growth surged from 20% to 23%. Record bookings of $1.63B (+37%) significantly outpaced revenue growth. RPO reached $3.46B. And every multi-product adoption tier deepened further, with 8+ product adoption reaching 18% (up from 16% in Q3, 12% a year ago).
The result: every monitoring trigger that could have escalated was cleared. Every signal classification was confirmed. The moat trajectory was upgraded from "widening (conditional)" to "widening (confirmed)."
Signal Status: All Six Confirmed
29% growth clears 25% escalation threshold. RPO +52%, NRR ~120%, record bookings all confirm. FY2026 guide 18-20% reflects conservative largest-customer assumption, not deceleration.
Moat trajectory upgraded to 'confirmed widening.' 8+ products at 18% (approaching 20% trigger). New 10+ tier disclosed at 9%. Record deal sizes. Bits AI creating new dependency layer.
Every bearish narrative further contradicted. Non-AI at 23% (was 20%). Revenue at 29% (was 28%). New AI model company 8-figure land. AI disruption evidence shifted from E0 to E0-E1.
Stock at ~$114. FY guide of 18-20% with Q1 at 25-26% creates guide-and-raise paradox. Market pricing through conservative guide to likely 23-27% actual growth.
No new insider buying or selling data from transcript. Post-earnings insider activity will be the next data point. Blackout has now lifted.
No new regulatory information. Standard tech environment unchanged.
Five Things That Matter From Q4
1. Non-AI Growth Surged to 23%
This is the single most important data point for the DISCONNECTED classification. Our preview noted non-AI usage at a 12-quarter high (20%). Q4 showed an acceleration to 23%, with the CFO noting the trend "continued in January." The "it's just an AI/OpenAI story" narrative is now more materially wrong than at any point in our analysis.
2. All Three Pillars Above $1B ARR
Infrastructure monitoring (>$1.6B), log management (>$1B, FlexLogs nearing $100M), and APM + DEM (crossed $1B) all reached major milestones. APM is now the fastest-growing core pillar at mid-30s% YoY. This is critical for the Gravy Gauge: revenue is diversified across product lines, not dependent on any single category.
3. Platform Adoption Deepening: 10+ Products at 9%
Datadog disclosed a new adoption tier: 9% of customers now use 10+ products (up from 6% a year ago). This is the deepest platform lock-in metric ever shared. Combined with 8+ at 18% (approaching the 20% de-escalation trigger) and 6+ at 33% (up from 26%), the moat trajectory is no longer conditional — it is confirmed widening.
4. AI Cohort Diversifying Rapidly
650 AI-native customers (up from 500+), 19 spending $1M+ (up from 15+), 14 of the top 20 AI-native companies. An 8-figure new logo land with "one of the largest AI financial model companies" — consolidating 5+ tools. This directly addresses the concentration risk we flagged: the AI cohort is broadening, not narrowing.
5. FY2026 Guide of 18-20% Is Conservative — By Design
The FY2026 revenue guide of $4.06-$4.1B (18-20% growth) looks cautious against Q1 guidance of 25-26%. The CFO explicitly called the largest customer assumption "very conservative" and noted the ex-largest customer business is guided to grow "at least 20%." This is consistent with DDOG's pattern: FY2025 was initially guided at 20% and delivered 26%. The guide is a floor, not a forecast.
Updated 4-lens analysis with Q4 data reflected
6 signals, 17 debates, monitoring triggers, full evidence citations.
AI Disruption: From E0 to E0-E1
One meaningful shift: the AI agent disruption narrative moved from pure speculation (E0) toward early counter-evidence (E0-E1). This is not a signal change, but it is worth noting.
CEO Olivier Pomel provided the most articulate counter-thesis to date on the earnings call. His argument: AI creates more complexity, not less observability demand. Agents build faster, which means more systems, more interactions, more monitoring needed. And DDOG's unique advantage is operating in the data plane — enabling real-time, in-stream analysis at "hundreds, thousands, millions of times per second" — something general-purpose LLMs cannot replicate.
The product evidence supports this: Bits AI SRE agent reached 2,000+ users in its first month since GA. MCP server tool calls grew 11x quarter-over-quarter. LLM observability spans increased 10x in six months. Datadog is not being displaced by AI — it is becoming the monitoring layer for AI.
What Remains Unresolved
The earnings transcript provides no new insider buying or selling data. The MIXED classification persists. With the blackout period now lifted, post-earnings insider activity will be the next data point. This is the primary reason investor posture remains PROCEED_WITH_CAUTION rather than upgrading to STANDARD_DILIGENCE.
The CFO's explicit framing of FY2026 guidance around the "largest customer" confirms concentration exists and management is hedging around it. No identity or ARR was disclosed. The "very conservative" assumption on that customer explains the gap between the FY guide (18-20%) and Q1 guide (25-26%).
At ~$114 per share, the stock trades at approximately 56x non-GAAP P/E. Q4 demonstrated the business can deliver against those expectations, but sustaining 25%+ growth at $3.4B+ revenue scale remains historically uncommon. The market must price through the conservative FY guide to justify current levels.
Updated Monitoring Triggers
Five monitoring triggers from the original analysis were resolved favorably by Q4 data. Six new triggers have been added for the next phase.
Q1 2026 earnings (May 2026): Confirms whether 25-26% guide is achievable and whether guide-and-raise continues
8+ product adoption reaching 20%: Currently at 18%, approaching the de-escalation threshold that would strengthen DEFENSIBLE classification
Bits AI SRE agent retention at 6 months: 2,000+ initial users — need retention data before classifying as verified moat layer
Post-earnings insider activity: First insider buying in 12+ months would be a strong de-escalation signal for GOVERNANCE_ALIGNMENT
FY2026 guide-and-raise progression: DDOG historically raises 600+ bps from initial guide. Failure to raise by Q2 would be notable.
Bottom Line
Q4 2025 was the strongest validation event for our original analysis. Every operational metric confirmed or improved. The moat trajectory that was conditional four days ago is now confirmed widening. The bearish narratives that were disconnected are now more disconnected. Non-AI growth surging to 23% is the clearest evidence yet that this is a platform story, not an AI story.
Investor posture remains PROCEED_WITH_CAUTION because the insider selling ambiguity is unresolved and valuation demands sustained execution. But the operational case has never been stronger. The next key events: post-earnings insider activity (weeks), and Q1 2026 earnings (May) to confirm the guide-and-raise pattern.
This analysis is for educational purposes only — it is not a recommendation to buy or sell any security.
Full Analysis with Q4 Data Reflected
Updated four-lens assessment including signal status, debate transcripts, evidence citations, and monitoring triggers.
View DDOG Analysis