Datadog Inc at RBC Capital Markets Global Technology, Internet, Media & Telecommunications Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Matthew Hedberg - RBC Capital Markets Inc - Analyst : Yes. I mean, I guess I wanted to double click on the non-AI piece, the non-AI customer cohorts. I mean what -- like is there any way to put your finger on what -- and it's probably hard to answer what changed because it doesn't -- the answer is like it's hard to say. But like I think a lot of us felt the AI natives cohort was leading the way towards implying that as customers adopt more AI, more workload, more monitoring, is that -- are you seeing this as the sustainability of this non-AI piece is like the flip is switched that more AI workloads are going to production from this non-AI native cohort because it just -- it feels like there could be some durability to that element?

Question: Matthew Hedberg - RBC Capital Markets Inc - Analyst : So the answer is it's not one thing. It could be -- trying to think differently about on-premise workload, it could certainly be AI workload, it could be Cloud SIEM. There's a variety of things there.

Question: Matthew Hedberg - RBC Capital Markets Inc - Analyst : Yes. We don't have the answers of -- one of the questions that we get about AI is in an AI bubble, and that's not for us to sort of like think through. But like when you -- how important is AI workload growth within that non-AI cohort? I mean are we at an inflection point where like banks, insurance companies are all of a sudden like -- the answer, like I know there's more than just that driving results. Are we at a tipping point now where AI on the broader economy is starting to--

Question: Matthew Hedberg - RBC Capital Markets Inc - Analyst : Okay. And then maybe just one last point here. You said that you felt the momentum was building. You've seen some of the early indicators previously that some of the stuff was coming around the concept of the durability of this. And are some of these trends that you're seeing now -- I mean, obviously, the macro can change in the future, but the durability of some of these trends that you're seeing--

Question: Matthew Hedberg - RBC Capital Markets Inc - Analyst : The other -- obviously, you guys renewed and expanded your largest AI customer, which was a huge talking point for a lot of investors. But what was really surprising, too, was the growth in all of the rest of the AI natives. I mean you're seeing some significant progress there with six-figure, seven-figure customers. What are -- could you pinpoint what those customers are using you guys for like specifically? Is it monitoring known workloads, customer spacing side? Like what are--

Question: Matthew Hedberg - RBC Capital Markets Inc - Analyst : One of the narratives really for the past couple of years is could AI kill software. And you guys certainly from a pricing perspective, are immune to seat-based pressure. When you look at how AI is impacting the infrastructure stack and when you think about open source technologies and things like that, I mean, how do you see AI evolving how customers think about the infrastructure or the monitoring layer in the future? And -- because there's -- you're unique and that there's no seat-based issue that you guys have (multiple speakers)-- REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 18, 2025 / 3:00PM, DDOG.OQ - Datadog Inc at RBC Capital Markets Global Technology, Internet, Media & Telecommunications Conference

Question: Matthew Hedberg - RBC Capital Markets Inc - Analyst : Yes. And then I guess the -- with open source alternatives or DIY, from a customer lens perspective, there's always -- and forgetting your largest customer, but what are you hearing from customers in terms of the criticality of like, oh, yes, sure, I can go do this in an open source model here or there, but like is it really -- why bother (multiple speakers)--

Question: Matthew Hedberg - RBC Capital Markets Inc - Analyst : Yes. And then maybe just one other kind of AI question. You sort of alluded that the AI native disclosure served the purpose. No how do you guys gave it. I forget how long ago it was first disclosed, but effectively implying that are we nearing the end of that is because you think about just the broader economy now. Is that something that we should kind of be prepared to--

Question: Matthew Hedberg - RBC Capital Markets Inc - Analyst : Okay. The other thing that struck us is the acceleration in your security business, which is -- it was a long time coming as well. Can you talk -- the question is like why now? And I'm sure the answer is it's been building. But can you help us think through some of the why now piece? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 18, 2025 / 3:00PM, DDOG.OQ - Datadog Inc at RBC Capital Markets Global Technology, Internet, Media & Telecommunications Conference

Question: Matthew Hedberg - RBC Capital Markets Inc - Analyst : And SIEM seems to be a big part of that. But when Oli and the team think about the white space, the shift left mentality, DevSecOps, broadly speaking, what sort of excites the team about future opportunities in cyber?

Question: Matthew Hedberg - RBC Capital Markets Inc - Analyst : The thing you guys talked about it, you launched it earlier this year, and you talked about a little bit on this last earnings call, but Bits AI seems to be resonating. Talk about that opportunity? How additive is it to a customer spend? And sort of like where do you see that driving additional customer value?

Question: Matthew Hedberg - RBC Capital Markets Inc - Analyst : Yes, that's great. The new engine flywheel of products has been really a hallmark of the company. And I guess the other thing that stood out in addition to some of the broader acceleration that we talked about was new logos. Logo adds were up dramatically. I mean this, I assume it's a similar answer. You've seen building momentum here. Could you put your finger on like why now and sort of like -- because obviously, there's a lot of turmoil out there (multiple speakers)--

Question: Matthew Hedberg - RBC Capital Markets Inc - Analyst : Yes. The -- I wanted to -- I guess, sort of in the same lens, you guys have been such an organic engine over time, and you've made some smart tuck-in deals. But I think you've got about $4 billion in cash now. How do you think about, broadly speaking, deploying that? I mean, could -- as you guys get bigger, could the size of M&A deals increase? And how do you kind of think about how M&A is part of the kind of the broader R&D?

Question: Matthew Hedberg - RBC Capital Markets Inc - Analyst : And I assume part of the high bar means deeply and natively integrated into the platform. You don't want to necessarily have a Frankenstein model where there's different bits hanging off the side-- REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 18, 2025 / 3:00PM, DDOG.OQ - Datadog Inc at RBC Capital Markets Global Technology, Internet, Media & Telecommunications Conference

Question: Matthew Hedberg - RBC Capital Markets Inc - Analyst : In terms of US Fed, it could certainly be more for you guys. How do you think -- when you think about FedRAMP, elevated levels there, how should we think about that as a contributor to kind of the future growth algorithm?

Question: Matthew Hedberg - RBC Capital Markets Inc - Analyst : Yes. If you've been to the post office or driver's license, it certainly could use--

Question: Matthew Hedberg - RBC Capital Markets Inc - Analyst : Yes. When we think about going into Q4, you guys are such a predictable subscription model that you don't -- budget flushes don't really (multiple speakers)--

Question: Matthew Hedberg - RBC Capital Markets Inc - Analyst : When you think about how customers are thinking through kind of like AI budgets, I think one of the prior concerns was, is there just confusion around how customers are thinking about AI dollars and deployment. Do you get a sense that the customers are more comfortable now in kind of that AI spend envelope and that could help open up opportunities for increased use of Datadog in the future? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 18, 2025 / 3:00PM, DDOG.OQ - Datadog Inc at RBC Capital Markets Global Technology, Internet, Media & Telecommunications Conference

Question: Matthew Hedberg - RBC Capital Markets Inc - Analyst : Yes. I'm going to ask you one more and then we'll see if -- this is a big group, we'll see if there's a question out there. In terms of -- you and I have had this conversation about pricing and packaging. And I think you feel that you guys have the right framework to get you to multiple billions of dollars more than you are now. And obviously, there was some -- talk about your largest customer and some -- maybe some bespoke things going on there. But do you think as you get these larger customers over time, that the pricing and packaging has to evolve for a tier of customers that are growing at a rapid pace and consuming a lot more of the product? Or do you think, no, like this is the model that will get us to customer spending--

Question: Matthew Hedberg - RBC Capital Markets Inc - Analyst : Yes. Great. Is there -- we may have time for one out here. If there's -- anybody has a question for David? Otherwise, we can keep rolling. We'll scan, scan, scan for logs. We're being thorough here. Yes. When you think about some of the building blocks for next year, and when you think about growth and profitability, obviously, you've done a great job balancing both as the company has scaled. What are some of the things that you would sort of like -- when you think about some of the big moving pieces without -- you're not going to guide, I understand that. But like when we -- how should we think about the evolution of this model as you continue to scale and profitability matters, but also you're seeing growth inflect at the same time?

Question: Matthew Hedberg - RBC Capital Markets Inc - Analyst : Yes. Maybe then just to wrap, when you and Oli and the executive team sit around and you think about some of these -- the big, big opportunities for Datadog, where you sit here and say, this is a moonshot for Datadog. I mean do you have any sort of like bold like -- not financially, but just like longer-term predictions on while this is (multiple speakers)--

Question: Matthew Hedberg - RBC Capital Markets Inc - Analyst : Cool. Well, out of time. Look forward to you (multiple speakers) David from all of us.

Question: Matthew Hedberg - RBC Capital Markets Inc - Analyst : Thank you.