01—Abstract
Summary
Summary of the 10-Q filed August 8, 2025. Cited figures are marked; the original filing is the authoritative source.
Datadog, Inc.'s second-quarter 2025 results show continued revenue growth, with a 28% year-over-year increase to $826.8 milliona, driven by both new and existing customers.
The company's land-and-expand strategy continues to prove effective, evidenced by a strong dollar-based net retention rate of approximately 120%. Despite robust revenue growth, Datadog reported a net income of $2.6 millionb for the quarter, a significant decrease from $43.8 million in the prior year, primarily due to increased operating expenses, particularly in research and development (up 41%) and general and administrative costs (up 47%). This investment in growth and infrastructure is also reflected in the year-to-date net income, which stands at $27.3 million compared to $86.5 million in the first half of 2024.
Financially, Datadog maintains a strong liquidity position with $489 millionc in cash and cash equivalents and $3.4 billion in marketable securities. The company also saw positive operating cash flow of $471.6 million for the first six months of the year.
The successful conversion of the 2025 Convertible Senior Notes was completed, and the company is managing its debt structure with the 2029 Convertible Senior Notes. Investors should monitor expense growth relative to revenue, especially in R&D and G&A, as the company continues to invest in its platform and expand its market reach.
02—Key points
Key Highlights
- Revenue increased by 28% year-over-year to $826.8 million for the three months ended June 30, 2025.
- The company's dollar-based net retention rate was approximately 120% as of June 30, 2025, indicating strong expansion from existing customers.
- Net income decreased to $2.6 million from $43.8 million in the prior year's quarter, impacted by increased operating expenses.
- Operating expenses grew significantly, with R&D up 41% and G&A up 47% year-over-year for the quarter.
- Datadog ended the quarter with $489.0 million in cash and cash equivalents and $3.4 billion in marketable securities, demonstrating a strong liquidity position.
- Operating cash flow for the six months ended June 30, 2025, was $471.6 million, an increase from $376.7 million in the prior year period.
- The company completed the conversion of its 2025 Convertible Senior Notes, settling them with cash and stock.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2025, Datadog kept $0.00.
- Revenue$826.8M100.0%
- Cost of revenue−$166.0M20.1%
- Gross profit$660.8M79.9%
- Operating costs−$696.3M84.2%
- Operating income−$35.5M4.3%
- Interest, other & tax$38.1M4.6%
- Net income$2.6M0.3%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2025filed August 8, 2025Financial Statements
Q2 FY2025 against Q2 FY2024
| Line item | Q2 FY2025Q2 FY2024 | Change |
|---|---|---|
| Revenue | $826.76M$645.28M | +28.1% |
| Cost of Revenue | $165.98M$123.50M | +34.4% |
| Gross Profit | $660.78M$521.78M | +26.6% |
| R&D Expenses | $387.48M$274.60M | +41.1% |
| Operating Expenses | $696.28M$509.16M | +36.8% |
| Operating Income | -$35.50M$12.62M | −381.3% |
| Interest Expense | $1.86M$1.14M | +62.4% |
| Net Income | $2.65M$43.82M | −94.0% |
| EPS (Basic) | $0.01$0.13 | −92.3% |
| EPS (Diluted) | $0.01$0.12 | −91.7% |
| Shares Outstanding (Basic) | 346.19M334.94M | +3.4% |
| Shares Outstanding (Diluted) | 358.73M356.74M | +0.6% |
05—Questions
Frequently Asked Questions
What is Datadog's revenue growth for the second quarter of 2025?
Datadog's revenue for the three months ended June 30, 2025, was $826.8 million, representing a 28% increase compared to $645.3 million in the same period of 2024. This growth was attributed approximately 80% to expansion from existing customers and 20% from new customers.
How has Datadog's profitability changed compared to the prior year?
Datadog reported a net income of $2.6 million for the three months ended June 30, 2025, a significant decrease from $43.8 million in the same period of 2024. This decline was primarily driven by increased operating expenses, particularly in Research and Development (up 41%) and General and Administrative (up 47%) year-over-year.
What is Datadog's liquidity and cash flow situation?
Datadog maintains a strong liquidity position with $489.0 million in cash and cash equivalents and $3.4 billion in marketable securities as of June 30, 2025. The company generated $471.6 million in net cash from operating activities for the six months ended June 30, 2025, an increase from $376.7 million in the prior year period. Management believes these resources are sufficient to support its cash requirements for the next 12 months and beyond.
What significant debt obligations has Datadog addressed?
Datadog's 0.125% Convertible Senior Notes due 2025 matured on June 15, 2025. The company reports that all outstanding aggregate principal amount of these notes were converted by holders prior to maturity, with Datadog settling these conversions through cash payments and the issuance of Class A common stock. The company also has outstanding 0.00% Convertible Senior Notes due 2029.
06—Continue