DDOG · Forward model · Pomel case
The Pomel case, 20 quarters out
Each segment is projected from its own operating driver, rolled up into consolidated cash flow, and discounted back to a fair value per share. The assumptions below are editable — change them and every number on this page moves with them.
Datadog reports one operating and reportable segment, so this model uses the only revenue disaggregation it discloses: North America and International, which foot to reported revenue to the dollar in all six directly filed quarters and to within $4 thousand in the two fourth quarters that are derived as the fiscal year less the nine months. Nothing is split by product, because no product-line revenue is disclosed; nothing is built off total ARR, because Datadog never publishes one. Both verticals carry the consolidated cost structure - the chief operating decision maker reviews consolidated net income and no geographic profitability exists - and this is stated openly rather than dressed as a geographic insight. The projected margin is calibrated to cash rather than to GAAP: the basis-quarter inputs reproduce the house free-cash-flow margin of 27.3% ($306.0 million on $1,121.5 million, operating cash flow less purchases of property and equipment), which is $27.3 million above Datadog's own free-cash-flow definition because the company also deducts capitalised software. Corporate overhead is the disclosed general and administrative line at 7.7% of revenue; capex intensity is management's guided 4-5% of revenue for capex and capitalised software together, taken at the 4.5% midpoint; the tax rate is Datadog's stated 21% long-term projected rate. The one-off step in the North America driver is this model's calibration of a disclosed but unsized event - the largest customer's usage reduction, in a company that reports no customer at or above 10% of revenue - and the choice to put it in North America rather than International is inference from the growth-rate fingerprint, not disclosure. The exit multiple is the largest single lever and is an assumption: no peer multiple was independently verified.
The CEO's own framing of the print: the deceleration is one account, not the platform. On the 6 August 2026 call Olivier Pomel said the business ex the largest customer grows at pretty much the rest of the platform's rate, and that management chose to fully de-risk that account in the guide rather than leave it as an overhang. This case holds North America's post-step growth roughly two points a quarter higher through the horizon on the reading that the guide is a de-risked floor from a team that guided $1.07-1.08 billion and delivered $1.121 billion one quarter earlier. It does not restore the AI-native cohort's contribution and it does not lift International, because nothing disclosed supports either.
Latest: $2.66B (2031Q2E)
| Period | Value |
|---|---|
| 2024Q3 | $690M |
| 2024Q4 | $738M |
| 2025Q1 | $762M |
| 2025Q2 | $827M |
| 2025Q3 | $886M |
| 2025Q4 | $953M |
| 2026Q1 | $1.01B |
| 2026Q2 | $1.12B |
| 2026Q3E | $1.14B |
| 2026Q4E | $1.20B |
| 2027Q1E | $1.23B |
| 2027Q2E | $1.32B |
| 2027Q3E | $1.38B |
| 2027Q4E | $1.45B |
| 2028Q1E | $1.48B |
| 2028Q2E | $1.59B |
| 2028Q3E | $1.65B |
| 2028Q4E | $1.73B |
| 2029Q1E | $1.76B |
| 2029Q2E | $1.89B |
| 2029Q3E | $1.96B |
| 2029Q4E | $2.05B |
| 2030Q1E | $2.09B |
| 2030Q2E | $2.24B |
| 2030Q3E | $2.33B |
| 2030Q4E | $2.43B |
| 2031Q1E | $2.48B |
| 2031Q2E | $2.66B |
What drives each segment
North America
Growth pathThree 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.
Latest: $2.02B (2031Q2E)
| Period | Value |
|---|---|
| 2024Q3 | $485M |
| 2024Q4 | $516M |
| 2025Q1 | $534M |
| 2025Q2 | $587M |
| 2025Q3 | $634M |
| 2025Q4 | $679M |
| 2026Q1 | $724M |
| 2026Q2 | $825M |
| 2026Q3E | $834M |
| 2026Q4E | $868M |
| 2027Q1E | $888M |
| 2027Q2E | $967M |
| 2027Q3E | $1.01B |
| 2027Q4E | $1.05B |
| 2028Q1E | $1.07B |
| 2028Q2E | $1.17B |
| 2028Q3E | $1.22B |
| 2028Q4E | $1.26B |
| 2029Q1E | $1.29B |
| 2029Q2E | $1.40B |
| 2029Q3E | $1.46B |
| 2029Q4E | $1.52B |
| 2030Q1E | $1.55B |
| 2030Q2E | $1.68B |
| 2030Q3E | $1.75B |
| 2030Q4E | $1.82B |
| 2031Q1E | $1.86B |
| 2031Q2E | $2.02B |
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.
International
Growth pathThe steady half of the business: eight consecutive quarters of 22.5-24.0% growth with none of the AI-native volatility, and 26.5% of revenue. It is the residual of the only disclosed revenue disaggregation and cannot be broken down further, because the 10-K states that other than the United States no individual country reached 10% of total revenue in 2025, 2024 or 2023. No volume, price or utilisation metric is published for it, so it is modelled as growth on the reported line.
Latest: $639M (2031Q2E)
| Period | Value |
|---|---|
| 2024Q3 | $205M |
| 2024Q4 | $222M |
| 2025Q1 | $228M |
| 2025Q2 | $240M |
| 2025Q3 | $252M |
| 2025Q4 | $275M |
| 2026Q1 | $282M |
| 2026Q2 | $297M |
| 2026Q3E | $311M |
| 2026Q4E | $335M |
| 2027Q1E | $342M |
| 2027Q2E | $357M |
| 2027Q3E | $371M |
| 2027Q4E | $398M |
| 2028Q1E | $404M |
| 2028Q2E | $419M |
| 2028Q3E | $435M |
| 2028Q4E | $465M |
| 2029Q1E | $470M |
| 2029Q2E | $487M |
| 2029Q3E | $503M |
| 2029Q4E | $536M |
| 2030Q1E | $542M |
| 2030Q2E | $559M |
| 2030Q3E | $578M |
| 2030Q4E | $614M |
| 2031Q1E | $620M |
| 2031Q2E | $639M |
Assumptions & reasoning
- Every quarter is the International line of the 10-Q disaggregation table. The two fourth quarters are the fiscal year less the nine months and are marked estimated for that reason, not because anything was apportioned.
- Identical margin and capex inputs to North America by disclosure necessity: the CODM reviews consolidated net income and no geographic profitability exists to model. The only honest geographic differentiation in this model is the revenue growth path.
- Operating expenses are partly hedged with foreign currency forwards but revenue is never presented on a constant-currency basis, so part of this line's stability may be currency rather than demand. That is the reason the terminal rate sits below North America's.
- The seasonal factors are fitted to the eight disclosed quarters: the only material one is a fourth quarter about 2.0% above trend, which is why the Q4 sequential step looks larger than the year-over-year rate.
Where each case comes from
Bear case — primary sources
The primary sources this case is built from — filings, calls and posts. Where they are claims by an interested party rather than disclosures, every number in the Bear column is what happens if they are taken at face value.
Bull case — primary sources
The primary sources this case is built from — filings, calls and posts. Where they are claims by an interested party rather than disclosures, every number in the Bull column is what happens if they are taken at face value.
The contracted book at 30 June 2026
- Aug 6, 2026 the aggregate transaction price allocated to remaining performance obligations was $3,471.4 million... the Company expects to recognize substantially all of the remaining performance obligations over the next 24 months
- Aug 8, 2025 the aggregate transaction price allocated to remaining performance obligations was $2,425.8 million
Pomel case — primary sources
The primary sources this case is built from — filings, calls and posts. Where they are claims by an interested party rather than disclosures, every number in the Pomel column is what happens if they are taken at face value.
What management said about the largest customer
The guide this team beat one quarter earlier
From cash flow to fair value
| Present value of free cash flow, 20 quarters | $8.54B |
| Terminal-year revenue | $9.90B |
| Terminal-year EBITDA | $4.51B |
| Exit multiple, on revenue | 10.0x |
| Terminal value | $99.00B |
| Discounted at 10.0% a year, terminal value becomes | $61.47B |
| Enterprise value | $70.01B |
| Net cash | $3.99B |
| Equity value | $73.99B |
| Shares | 0.36B |
| Fair value per share | $206.06 |
| Against the current price of $242.93 | -15% |
10% on a profitable software business with $4.0 billion of net cash, no financing need and $1.0 billion of zero-coupon converts due 2029. 8x exit revenue is a mature-SaaS multiple for a line fading toward mid-teens growth by 2031; the shares trade at 17.4x FY2026 guided revenue today, and that multiple cannot survive the fade. No peer multiple was independently verified in the research pass, so the exit multiple is anchored on Datadog's own compression rather than on an asserted comp set - it is the single largest lever in this model.
Read the other way round: at $242.93 the market is paying 12.2x terminal-year revenue, holding every other assumption on this page fixed. That is the number to argue about.
The projected path
| Quarter | North America | International | Revenue | YoY | EBITDA | Capex | FCF | R40 | PV of FCF |
|---|---|---|---|---|---|---|---|---|---|
| 2026 Q3E | $834M | $311M | $1.14B | +29% | $464M | $52M | $326M | +58 | $319M |
| 2026 Q4E | $868M | $335M | $1.20B | +26% | $494M | $54M | $348M | +55 | $332M |
| 2027 Q1E | $888M | $342M | $1.23B | +22% | $511M | $55M | $360M | +51 | $335M |
| 2027 Q2E | $967M | $357M | $1.32B | +18% | $556M | $60M | $392M | +48 | $357M |
| 2027 Q3E | $1.01B | $371M | $1.38B | +21% | $585M | $62M | $413M | +50 | $367M |
| 2027 Q4E | $1.05B | $398M | $1.45B | +20% | $619M | $65M | $438M | +50 | $379M |
| 2028 Q1E | $1.07B | $404M | $1.48B | +20% | $636M | $66M | $450M | +51 | $381M |
| 2028 Q2E | $1.17B | $419M | $1.59B | +20% | $689M | $71M | $488M | +51 | $403M |
| 2028 Q3E | $1.22B | $435M | $1.65B | +20% | $722M | $74M | $512M | +51 | $413M |
| 2028 Q4E | $1.26B | $465M | $1.73B | +19% | $760M | $78M | $539M | +51 | $425M |
| 2029 Q1E | $1.29B | $470M | $1.76B | +19% | $779M | $79M | $553M | +51 | $425M |
| 2029 Q2E | $1.40B | $487M | $1.89B | +19% | $840M | $85M | $597M | +51 | $448M |
| 2029 Q3E | $1.46B | $503M | $1.96B | +19% | $878M | $88M | $624M | +51 | $458M |
| 2029 Q4E | $1.52B | $536M | $2.05B | +19% | $922M | $92M | $655M | +51 | $469M |
| 2030 Q1E | $1.55B | $542M | $2.09B | +19% | $942M | $94M | $670M | +51 | $468M |
| 2030 Q2E | $1.68B | $559M | $2.24B | +19% | $1.01B | $101M | $722M | +51 | $493M |
| 2030 Q3E | $1.75B | $578M | $2.33B | +19% | $1.06B | $105M | $753M | +51 | $502M |
| 2030 Q4E | $1.82B | $614M | $2.43B | +19% | $1.11B | $110M | $789M | +51 | $514M |
| 2031 Q1E | $1.86B | $620M | $2.48B | +19% | $1.13B | $111M | $805M | +51 | $512M |
| 2031 Q2E | $2.02B | $639M | $2.66B | +19% | $1.22B | $120M | $866M | +51 | $538M |
Every row is projected. A year-over-year change is shown only where the quarter it compares against exists — an em dash means there is no comparable quarter, not a flat year.
Model revisions
Assumptions are marked to reality as each quarter prints. Every change is appended here, with the fair value the model produced at the time, so the model's own history stays visible.
| Date | Changed | Fair value then | Note |
|---|---|---|---|
| 2026-08-27 | all | $155.50 | First publication, off the Q2 2026 print of 6 August 2026. Two verticals - the only disclosed revenue split - with the largest customer's usage reduction carried as a one-off step to the North America run rate so the guided Q3 and FY2026 revenue both reconcile. |