01—Abstract
Summary
Summary of the 10-K filed February 18, 2026. Cited figures are marked; the original filing is the authoritative source.
Datadog, Inc. demonstrated robust financial performance in the fiscal year ended December 31, 2025, with revenue reaching $3.43 billiona, a 28% increase year-over-year.
This growth was primarily driven by existing customers expanding their usage (75% of the increase) and new customer acquisition (25%). The company achieved a net income of $107.7 millionb and positive operating cash flow of $1.05 billion, indicating strong operational efficiency and cash generation capabilities. Datadog continues to expand its platform offerings, incorporating AI-driven capabilities and entering new product areas like Product Analytics and LLM Observability, positioning itself for continued growth in the expanding observability and security markets.
While the company experienced a slight decrease in gross margin to 80%c due to increased cloud infrastructure costs, its overall financial health remains strong. Investments in research and development and sales and marketing continue, supporting product innovation and market penetration.
Datadog ended the year with a healthy cash position of $4.1 billiond in cash and marketable securities, providing ample resources for future growth initiatives, strategic acquisitions, and operational needs. The company's land-and-expand business model, coupled with strong dollar-based net retention (120% as of December 31, 2025), suggests a sticky customer base with significant potential for future revenue expansion.
02—Key points
Key Highlights
- Revenue grew 28% year-over-year to $3.43 billion for the fiscal year ended December 31, 2025.
- Net income was $107.7 million, with strong operating cash flow of $1.05 billion.
- Dollar-based net retention rate reached approximately 120% as of December 31, 2025, indicating robust expansion within the existing customer base.
- The company ended the year with $4.1 billion in cash and marketable securities, providing significant financial flexibility.
- Datadog continues to invest in innovation, launching new products and enhancing its AI capabilities, demonstrating a commitment to platform expansion.
- Approximately 75% of revenue growth in fiscal year 2025 was driven by existing customers increasing their usage and adopting new products.
- The company expanded its customer base to approximately 32,700 customers as of December 31, 2025.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2025, Datadog kept $0.03.
- Revenue$3.43B100.0%
- Cost of revenue−$687.0M20.0%
- Gross profit$2.74B80.0%
- Operating costs−$2.78B81.3%
- Operating income−$44.4M1.3%
- Interest, other & tax$152.1M4.4%
- Net income$107.7M3.1%
04—Financials
Financial Highlights
Figures from 10-KFY2025filed February 18, 2026Financial Statements
FY2025 against FY2024
| Line item | FY2025FY2024 | Change |
|---|---|---|
| Revenue | $3.43B$2.68B | +27.7% |
| Cost of Revenue | $686.96M$515.53M | +33.3% |
| Gross Profit | $2.74B$2.17B | +26.3% |
| R&D Expenses | $1.55B$1.15B | +34.3% |
| Operating Expenses | $2.78B$2.11B | +31.7% |
| Operating Income | -$44.37M$54.28M | −181.7% |
| Net Income | $107.70M$183.75M | −41.4% |
| EPS (Basic) | $0.31$0.55 | −43.6% |
| EPS (Diluted) | $0.31$0.52 | −40.4% |
| Shares Outstanding (Basic) | 347.31M336.17M | +3.3% |
| Shares Outstanding (Diluted) | 363.47M358.64M | +1.3% |
05—Questions
Frequently Asked Questions
What was Datadog's revenue growth in fiscal year 2025?
Datadog's revenue grew by 28% year-over-year, reaching $3.43 billion for the fiscal year ended December 31, 2025.
How is Datadog funding its growth and operations?
Datadog is funding its growth through a combination of strong operating cash flow ($1.05 billion in fiscal year 2025) and a significant cash and marketable securities balance ($4.1 billion as of December 31, 2025). The company also has the ability to issue debt, as evidenced by the $1.0 billion in 0.00% Convertible Senior Notes due 2029 issued in December 2024.
What is Datadog's strategy for expanding revenue?
Datadog employs a land-and-expand business model. Growth is driven by acquiring new customers and, more significantly, by existing customers increasing their usage of the platform and adopting new products. This is reflected in their strong dollar-based net retention rate of approximately 120% as of December 31, 2025.
What are the key risks facing Datadog, as highlighted in the filing?
Key risks include unfavorable economic conditions impacting IT spending, increased competition, the potential for customer churn, the need for continued innovation and product development, cybersecurity threats, and the challenges of managing global growth. The company also faces risks related to its significant investments in sales and marketing and research and development.
06—Continue