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DDOG · Forward model · North America · Bear case

What has to happen in North America

Model as of

This page changes North America inside the complete DDOG model. Every other vertical, corporate programme and valuation assumption stays in the selected portfolio case.

DDOG forward model
Horizon
Consolidated fair value $91.45 all other verticals held in this portfolio case
Final-quarter revenue $1.23B 73% of company revenue
Explicit segment contribution $6.28B EBITDA less segment capex, before corporate items

The disclosed concentration unwinds rather than merely optimises. Strip the AI-native cohort's high single digit percentage points of growth contribution and the underlying business is a 27-29% grower - exactly where the Q3 guide lands - but the bear case says the fade runs past the one account: gross margin has already slipped to 78.6% from 79.9%, and customers above $100k of ARR grew 22.6% against revenue at 35.6%, so the platform is leaning on deeper spend from a slowly widening base. The multiple compresses to 5.5x and the discount rate rises with the growth risk.

North America

Basis quarter$825M
Final quarter$1.23B
Implied CAGR+8%
Final revenue mix73%

Three quarters of Datadog's revenue and all of its recent acceleration. North America grew 40.6% year over year in the basis quarter against 23.6% for International, and the AI-native cohort that contributed high single digit percentage points of company growth is overwhelmingly US-domiciled. It is also where the disclosed risk sits: the largest customer began reducing usage in Q3 2026, and the Q3 guide absorbs the whole seven-point deceleration. Datadog discloses no hosts, ingested volume, seats or price for any geography, so growth on the reported line is the only honest driver.

Last four quarters
2025 Q3 $634M Reported
2025 Q4 $679M Estimated
2026 Q1 $724M Reported
2026 Q2 $825M Reported
Usage-metered subscriptions to the observability and security platform - infrastructure monitoring, APM, log management, digital experience monitoring, cloud security and LLM observability - sold to customers in North America. No revenue is disclosed by product, so no stream inside this line may be sized separately.
Sequential growth +4.3%/qtr decaying toward +3.6% 4.33% a quarter is 18.5% annualised: what the FY2026 guide leaves this line after the step down, above International.
North America

Latest: $1.23B (2031Q2E)

Period Value
2024Q3 $485M
2024Q4 $516M
2025Q1 $534M
2025Q2 $587M
2025Q3 $634M
2025Q4 $679M
2026Q1 $724M
2026Q2 $825M
2026Q3E $819M
2026Q4E $835M
2027Q1E $837M
2027Q2E $892M
2027Q3E $910M
2027Q4E $924M
2028Q1E $922M
2028Q2E $980M
2028Q3E $996M
2028Q4E $1.01B
2029Q1E $1.00B
2029Q2E $1.06B
2029Q3E $1.08B
2029Q4E $1.09B
2030Q1E $1.08B
2030Q2E $1.15B
2030Q3E $1.16B
2030Q4E $1.17B
2031Q1E $1.16B
2031Q2E $1.23B

Assumptions & reasoning

  • Every quarter here is the North America line of the 10-Q revenue disaggregation table, the only revenue split Datadog discloses. The two fourth quarters are marked estimated because Q4 is never filed on its own: they are the fiscal year less the nine months, and the derived consolidated total lands within $4 thousand of the house series.
  • The footnote to the basis quarter puts United States revenue at $790.1 million, so the US alone is 70.5% of consolidated revenue and this line is very nearly a US line.
  • The one-off step in the driver is the disclosed largest-customer reduction. Datadog reports no customer at or above 10% of revenue and never sizes this one, so the cut can only be modelled as a level change calibrated to the guide - the dollar figure is ours, not the company's.
  • Attributing the whole Q3 deceleration to North America is inference from the growth-rate fingerprint - 40.6% here against 23.6% International, and a US-domiciled AI cohort - not from disclosure. The consolidated path is unaffected by the split; the Q3 2026 10-Q will show which line actually absorbed it.
  • Datadog is a single operating and reportable segment whose CODM reviews consolidated net income, so the margin and capex inputs on this line are the consolidated ones. There is no geographic profitability disclosure and this model asserts no geographic margin difference.
  • The seasonal factors are fitted to the eight disclosed quarters and are mild - Q1 runs about 2.4% below trend, Q2 about 1.4% above. They shape the quarters inside a year and leave the year-over-year path alone.
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