Will Datadog's percentage of customers using 4+ products decline below 52% in any quarter reported by H1 2026?

With Q4 2025 now reporting 55% (up from 54% in Q3), the threshold has widened to 3pp above the 52% resolution line. Only Q1 2026 and Q2 2026 remain as possible trigger quarters — down from three quarters previously. The metric has now shown five consecutive quarters of increase or stability (Q3 2024: 49%, Q1 2025: 51%, Q2 2025: 52%, Q3 2025: 54%, Q4 2025: 55%). A 3pp+ single-quarter decline has no historical precedent for Datadog's multi-product adoption metric. The moat trajectory is now confirmed as 'Widening' — not conditional. All higher tiers are accelerating (6+ at 33%, 8+ at 18%, 10+ at 9%), demonstrating deep structural adoption that anchors the 4+ metric. Record bookings of $1.63B and 18 deals over $10M TCV indicate enterprise commitment deepening. The only scenario for YES requires an unprecedented systemic shock in the next two quarters.

The update materially reduces YES probability. Previously, from 54% with 3 quarters, we needed a 2pp drop in any of three windows. Now from 55% with only 2 quarters, we need a 3pp+ drop in either window. The new logo bookings more than doubling is a genuine dilution risk — new customers start with fewer products and could lower the percentage if they represent a large enough share of the denominator. However, the cross-sell engine is also strengthening (NRR ~120%, three pillars each above $1B ARR). The calibration feedback from sibling markets suggests our ensemble was insufficiently confident when leaning in the correct direction. Both resolved siblings showed we should have been more decisive. Applying that lesson: this market is even more clearly NO than before, so I push probability lower. A small residual for truly unforeseeable events (metric restatement, massive customer base change from acquisition).

Let me consider the most plausible path to YES: massive new customer onboarding diluting the 4+ percentage. New logo bookings more than doubled, and new customers contributed 25% of revenue growth in Q3. If this acceleration continues and new logos represent a disproportionate share of the customer count increase, the denominator grows with customers mostly in the 1-3 product range. But even in this scenario, the numerator (existing 4+ customers) is extremely sticky with mid-to-high 90s retention, and the cross-sell pipeline converts new customers upward. For the percentage to drop 3pp, you'd need the customer base to expand ~15-20% in a quarter with zero cross-selling — completely inconsistent with the $1.63B bookings and deepening adoption data. The disclosure of the 10+ product tier at 9% is a powerful new data point: these deeply embedded customers create structural ballast. Probability is near-floor.

This is approaching certainty NO territory. The metric went UP to 55% in Q4 — the exact quarter that was the 'conditional' test for moat widening. It passed. Now you'd need a 3pp decline in Q1 or Q2 2026. The trajectory since Q3 2024: 49% -> 51% -> 52% -> 54% -> 55%. That's a monotonically increasing series with no dips. All higher tiers also increasing. Three product pillars each exceeded $1B ARR. The company just disclosed a 10+ product tier. There is no mechanism by which this drops 3pp in a quarter absent a company-destroying event, and even then, retention dynamics would buffer the metric for multiple quarters before showing in the percentage.

Applying calibration lesson from sibling markets: we were right directionally but not confident enough. Both resolved DDOG markets showed the ensemble should have pushed harder. For this market, the case is even stronger for NO now: buffer increased from 2pp to 3pp, exposure window narrowed from 3 to 2 quarters, and the moat is confirmed widening. The only non-trivial risk I can identify is a metric methodology change — if DDOG redefines how products are counted or changes the customer base denominator for some reason. But companies virtually never retroactively change favorable metrics mid-trend. Assigning 3% to account for extreme tail risks including things I cannot foresee.

The new customer doubling deserves careful consideration. If DDOG's customer count surges (from aggressive sales expansion), and these new customers overwhelmingly use 1-3 products, the denominator effect could theoretically compress the 4+ percentage. But let's quantify: DDOG had ~28,800 customers with >$100K ARR at end of Q4. Even if they added 3,000+ such customers in a quarter (wildly above trend), and ALL started with <4 products, and ZERO existing customers crossed the 4+ threshold, the percentage would barely move 1-2pp. The math simply doesn't allow a 3pp drop with realistic customer dynamics. And the cross-sell engine works fast — customers move to 4+ rapidly as evidenced by the consistently increasing trend.

Q4 2025 data confirmed the upward trend: 55%, up from 54%. Now 3pp above the 52% threshold with only 2 quarters remaining. The trend has been monotonically increasing for 5 straight data points. All higher adoption tiers accelerating. Record bookings. Moat confirmed widening. This is a near-certain NO. The required 3pp single-quarter decline has no precedent and no plausible mechanism.

The update is strongly confirmatory for NO. Key considerations: (1) Buffer increased from 2pp to 3pp. (2) Exposure reduced from 3 quarters to 2. (3) Moat trajectory upgraded from conditional to confirmed. (4) New 10+ product tier disclosed — deeper adoption than previously visible. The new logo doubling is the only factor that could conceivably work against the metric, but cross-sell dynamics and retention overwhelm any dilution effect. Sibling market calibration says we should be more decisive when the evidence is clear.

The most important update fact: Q4 2025 showed continued increase to 55%. This was the quarter the moat assessment was conditional on — it confirmed widening. With the metric now 3pp above threshold and only two quarters of exposure, the probability is roughly half of the prior assessment (which was 6% median with 2pp buffer and 3 quarters). Adjusting for the stronger evidence base and calibration feedback suggesting more decisiveness, I place this at 3%.