Will Datadog's Q1 2026 year-over-year revenue growth rate sustain above 25%?

Q1 2026 guidance of 25-26% YoY places the YES threshold at the floor of management's own guidance range. Datadog's consistent guide-and-raise execution — Q4 2025 guided at ~23-24% and delivered 29% (+5pp beat) — strongly supports at least matching the guided rate. Non-AI customer growth accelerated to 23% YoY in Q4 and continued into January, providing a durable base independent of OpenAI concentration risk. The primary downside scenario requires the largest customer to decline substantially enough to drag total growth below the guided floor, which management has already embedded a 'very conservative assumption' about.

The record bookings of $1.63B (+37% YoY) and RPO of $3.46B (+52% YoY) provide unusually strong forward revenue visibility for Q1 — contracted demand converting to recognized revenue is the most reliable predictor of near-term results. The predecessor market (Q4 2025 below 25%) resolved NO with 29% actual delivery, validating the guide-and-raise framework. The largest customer uncertainty creates a narrow band of downside risk: CFO explicitly flagged this in FY guidance but Q1 guidance was set separately at 25-26%, suggesting Q1 near-term visibility is cleaner than the FY picture. A slight discount from run 1 reflects the genuine uncertainty about whether the largest customer decline could exceed management's conservative buffer.

Four consecutive quarters of growth acceleration (25% → 27% → 28% → 29%) combined with NRR ~120% and 55% of customers now using 4+ products establishes structural momentum that is unlikely to reverse to below 25% in a single quarter. The math of the question is favorable: the YES threshold is at exactly the guidance midpoint, meaning any guidance beat — even a modest one — resolves YES. Historical beats have ranged 300-500bps above guidance, implying a likely Q1 result of ~28-31%. For resolution NO, Datadog would need to deliver a guidance miss, which has not occurred in recent history during the guide-and-raise pattern period.

The guide-and-raise pattern is well-established and analytically meaningful, but this market has a structurally different risk profile than prior quarters because the FY2026 guide explicitly embeds a 'very conservative assumption' on the largest customer. If the largest customer's Q1 revenue is tracking down materially from Q4 levels, total Q1 growth could approach 25% from above rather than comfortably clearing it. The 25% threshold sitting precisely at the guidance floor means there is less margin for error: a guidance miss, while historically rare, would directly resolve NO. Against this, non-AI at 23% accelerating and January confirmation provide a solid base.

The predecessor market calibration lesson argues for higher confidence than the committee initially assigned to the equivalent Q4 question. The ensemble predicted 62% NO (38% YES) on the Q4 below-25% market; actual was 29%, suggesting the NO side deserved 75-80% confidence. Applying that calibration correction to this market — where the same guide-and-raise pattern holds — argues for higher YES probability. The 8-figure new AI model company land (largest new logo deal in DDOG history) also adds incremental diversification away from OpenAI concentration, reducing tail risk. Weighting slightly above run 1 for the calibration adjustment and new AI customer diversification.

Assigning a moderate discount to capture the genuine uncertainty in usage-based revenue recognition. Bookings and RPO are leading indicators, not revenue — consumption could underperform contracted commitments in a cloud optimization cycle, even with strong bookings. The Gravy Gauge's CONDITIONAL classification specifically flags this usage-based sensitivity. Additionally, the FY2026 initial guide of 18-20% — dramatically below Q1's 25-26% — suggests management has embedded substantial H2 deceleration, possibly starting from Q1 if largest customer trends are worsening. The discount is modest because the base business is structurally sound, but uncertainty is non-trivial.

The guide-and-raise pattern supports YES, but calibration discipline requires accounting for the specific threshold structure. Unlike the predecessor market where 25% growth required beating guidance substantially, this market resolves YES at the guided floor. This means less reliance on the beat mechanism and more dependence on Datadog simply executing at its own guided rate. Non-AI growth at 23% provides a meaningful base, but the largest customer uncertainty is acknowledged as 'very conservative' even by management — implying measurable downside risk. Probability set below opus runs to reflect the calibration lesson: avoid over-mechanically applying guide-and-raise without conditioning on concentration risk.

Applying the most conservative end of the haiku range to reflect maximum weight on the largest customer uncertainty. The CFO's explicit 'very conservative assumption' framing could be masking a known Q1 headwind — management sometimes signals embedded weakness through language choices before confirmation. The 'ex-largest customer at least 20%' guardrail also implies that with the largest customer included, guidance could be at risk if that customer is in a meaningful decline phase. The macro environment (enterprise software spending softness) adds a secondary headwind to usage-based consumption. Still YES-leaning overall because the underlying business momentum is genuine, but this run captures the downside tail more fully.

Balancing the two haiku runs: the base case probability reflects that Q1 guidance already incorporates the largest customer conservative assumption (management guided Q1 at 25-26% knowing the FY uncertainty), so Q1-specific guidance is the cleaner signal. Four quarters of consecutive acceleration plus record bookings and strong January non-AI trends suggest the business is genuinely performing. The YES threshold being at the guidance midpoint means only a true guidance miss — historically rare in this guide-and-raise regime — would resolve NO. Probability slightly above run 2 to reflect that Q1 guidance was set with visibility into Q1 conditions, not just FY extrapolation.