Datadog: 3 Key Takeaways for Long-Term Investors
All 15 of the top 15 AI leaders use Datadog's tools, and its non-AI business is also accelerating.
Three key insights emerged from Datadog's recent earnings call on November 4, 2026, offering valuable perspectives for long-term investors.
Firstly, Datadog's core enterprise demand for software monitoring has been expanding independently of the AI boom. This steady growth provides reliable recurring cash flows, allowing the company to sell additional software modules to existing accounts. This diversification strategy reduces reliance on expanding existing accounts and drives higher initial deal sizes.
Secondly, the non-AI customers' revenue growth has accelerated for the fifth consecutive quarter, reaching double digits year-over-year. This impressive growth, up about 1 percentage point from the previous quarter, has risen from around 20% in the year-ago quarter. The strong performance of non-AI customers highlights the platform's expanding role in software operations across various industries.
Lastly, the core infrastructure monitoring suite, which tracks cloud servers and hardware performance, has surpassed $2 billion in annual recurring revenue (ARR). This milestone, growing at a mid-30% year-over-year rate, demonstrates the product's increasing value and importance to clients as their software architectures become more complex.
Landing larger upfront contracts not only accelerates top-line growth but also reduces dependence on expanding existing accounts, positioning Datadog to capitalize on long-term enterprise spending.
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