Summary
Datadog, Inc. reported strong revenue growth for the nine months ended September 30, 2025, with revenue reaching $2.47 billion, a 27% increase year-over-year. This growth was primarily driven by existing customers (80% of the increase) and new customer acquisition (20%). While revenue increased, the company experienced an operating loss of $53.7 million for the nine-month period, compared to an operating income of $44.9 million in the prior year. Net income for the nine months ended September 30, 2025, was $61.2 million, a decrease from $138.2 million in the same period of 2024. The company maintained a healthy cash position with $540.6 million in cash and cash equivalents and $3.6 billion in marketable securities as of September 30, 2025. Free cash flow also showed a positive trend, increasing to $623.7 million for the nine months ended September 30, 2025, up from $534.1 million in the prior year. Significant investments in research and development (R&D) and sales and marketing continue to be a focus, with R&D expenses increasing by 35% and sales and marketing by 26% year-over-year for the nine-month period. The company also noted a strategic shift in the useful life of capitalized software development costs, extending it from two to three years, which impacted depreciation. Acquisitions during the period, while not individually material, contributed to an increase in goodwill. The company is managing its debt effectively, with the 2025 Convertible Senior Notes having matured and been converted, while the 2029 Notes remain a long-term liability.
Financial Highlights
51 data points| Revenue | $885.65M |
| Cost of Revenue | $176.46M |
| Gross Profit | $709.19M |
| R&D Expenses | $401.98M |
| Operating Expenses | $715.00M |
| Operating Income | -$5.81M |
| Interest Expense | $1.05M |
| Net Income | $33.88M |
| EPS (Basic) | $0.10 |
| EPS (Diluted) | $0.10 |
| Shares Outstanding (Basic) | 348.64M |
| Shares Outstanding (Diluted) | 362.00M |
Key Highlights
- 1Revenue for the nine months ended September 30, 2025, was $2.47 billion, up 27% year-over-year, driven by strong customer retention and expansion.
- 2Operating loss for the nine months ended September 30, 2025, was $53.7 million, a shift from operating income in the prior year, reflecting increased operating expenses.
- 3Net income for the nine months ended September 30, 2025, decreased to $61.2 million compared to $138.2 million in the prior year.
- 4Cash and marketable securities remain robust, totaling $540.6 million and $3.6 billion, respectively, as of September 30, 2025, indicating strong liquidity.
- 5Free cash flow for the nine months ended September 30, 2025, increased to $623.7 million, up from $534.1 million in the prior year, demonstrating solid cash generation.
- 6Significant investments continue in R&D (up 35%) and Sales & Marketing (up 26%) year-over-year for the nine-month period, indicating a focus on future growth and innovation.
- 7The company has a substantial remaining performance obligation of $2.79 billion as of September 30, 2025, expected to be recognized over the next 24 months.