The short answer
Datadog is HALAL in ZakatInvest's qualitative classification, but its current financial presentation is a FAIL under the examined total-assets methods. Cloud observability, infrastructure monitoring and defensive security software are generally permissible services. The financial result is separate: Datadog holds a large marketable-securities portfolio that pushes asset-based liquidity above the examined limits.
This is a reproducible research screen, not a fatwa or investment recommendation. Readers should apply their school's principles and consult a qualified scholar for a binding ruling.
Current quantitative Sharia screen
Based on 10-Q figures for the period ended 2026-03-31; calculated 2026-07-13.
984.496 / 6,952.012
4,758.617 / 6,952.012
1,106.794 / 6,952.012
49.229 / 1,006.426
- Financial
- Fails
- Overall
- Fails
Debt is 14.16%, liquidity is 68.45% and receivables plus cash are 15.92%; liquidity exceeds the examined FTSE total-assets limit. Disclosed interest income is 4.89% of revenue.
- Financial
- Fails
- Overall
- Fails
Debt is 14.16% and receivables plus cash are 15.92%, but liquidity is 68.45%, above the examined MSCI total-assets limit. This is a calculation against the named method, not an index-membership claim.
- Financial
- Fails
- Overall
- Fails
Debt is 14.16%, but liquidity is 68.45%, above the examined Malaysia SAC financial limit. This is a calculation against SAC ratios, not an official classification of a U.S.-listed security.
- Financial
- Not calculated
- Overall
- Not calculated
A properly licensed and reproducible historical market-cap series is not stored, so these methods are not estimated from a current spot price.
Business-activity disclosure
Datadog provides cloud observability, infrastructure monitoring, application performance monitoring, log management, user-experience monitoring, cloud security and service-management software. Enterprise SaaS and defensive security are generally permissible, while government, surveillance, AI and customer-use exposure requires qualitative review.
Limitation: The filing does not allocate revenue by customer industry, government contract, security use case, AI workload or downstream application into a universal prohibited-revenue numerator; no blanket zero-concern claim is made.
Purification
Datadog discloses interest income but does not prescribe a scholar-approved purification percentage. Readers should follow the qualified scholar or methodology they use rather than applying an invented fixed rate.
Inputs, assumptions and primary sources
- Inputs use Datadog's March 31, 2026 Form 10-Q; amounts are USD millions converted from the filing's USD-thousands presentation.
- Debt uses the $984.496 million carrying amount of the 0.00% convertible senior notes due 2029. Operating lease liabilities are not entered as conventional debt.
- Cash uses $426.360 million of cash and cash equivalents. Marketable securities of $4,332.257 million are entered separately as interest-bearing securities.
- Receivables use $680.434 million of accounts receivable, net. Deferred contract costs are not treated as receivables.
- Quarterly revenue is $1,006.426 million and disclosed interest income is $49.229 million. The screen uses the filing's gross interest-income line; no fixed purification percentage is prescribed.
This is a reproducible financial screen, not a fatwa. A failed total-assets screen can coexist with a pass under a market-cap methodology. ZakatInvest keeps the qualitative assessment separate so numerical thresholds do not erase material context.
Current quantitative screen
The calculations use Datadog's official filing at the SEC (Q1 2026 Form 10-Q). Amounts are in USD millions and use total assets as the denominator.
- Interest-bearing debt / assets: 14.16%, using the carrying amount of the 0.00% convertible notes due 2029.
- Cash plus marketable securities / assets: 68.45%, using reported cash and marketable securities.
- Receivables plus cash / assets: 15.92%, using accounts receivable and cash.
- Disclosed interest income / revenue: 4.89% for the quarter. No fixed purification percentage is prescribed here.
The examined FTSE, MSCI and Malaysia total-assets calculations fail on liquidity. Debt, receivables-plus-cash and the examined FTSE income comparison are below their respective thresholds. Market-cap denominator methods are not calculated because ZakatInvest does not store a licensed, reproducible historical market-cap series.
What Datadog does
Datadog operates an AI-powered observability and security platform for cloud applications. Its products cover infrastructure monitoring, application performance, logs, user experience, cloud security, service management and related developer tools. The filing reports $1,006.426 million of quarterly revenue, with substantially all revenue from subscription software.
Enterprise SaaS and defensive security are generally permissible technology commerce. The filing does not allocate revenue by customer industry, government contract, security use case, AI workload or downstream application into a universal prohibited-revenue numerator, so the business assessment remains qualitative rather than claiming zero haram revenue.
Debt, investments and purification
At March 31, 2026, Datadog reported $6,952.012 million of total assets, $426.360 million of cash and cash equivalents, and $4,332.257 million of marketable securities. It reported $984.496 million of carrying-value convertible senior notes due 2029; those notes have a 0.00% stated rate, but remain debt for this balance-sheet screen.
Datadog disclosed $49.229 million of interest income for the quarter. Because the company does not prescribe a scholar-approved purification percentage, readers should follow the qualified scholar or methodology they use instead of donating an invented fixed share.
Qualitative considerations
- Neutral software: Datadog can serve conventional finance, entertainment, government and other customers whose activities a reader may assess differently.
- Dual use: cloud security, observability and incident-response tooling can support surveillance or other sensitive use cases that are not separated in the revenue disclosures.
- AI and telemetry: AI-enabled features, customer logs and system telemetry raise continuing privacy and data-governance questions.
- Financial holdings: the large marketable-securities portfolio is the key quantitative driver and should be refreshed when balances or methodology treatment change.
- Operations: stock compensation, acquisitions, hosting dependencies, labor and cross-border data processing remain material diligence topics.
The halal-but-financially-failing verdict
Datadog remains HALAL in ZakatInvest's qualitative classification, with a current financial FAIL because liquidity is 68.45% of assets and disclosed interest income is 4.89% of quarterly revenue. This is not an official index membership or fatwa. Revisit the record when Datadog files new statements or materially changes its investments, observability, AI, security or customer disclosures.
Use the quantitative screen alongside your school's principles and consult a qualified scholar before investing.
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