Datadog (DDOG) DDOG Q3 Financial Results Summary

2025-11-06 · Stocks · QuoteReporter

Datadog, Inc. (DDOG) Q3 2025 Financial Results Summary

Datadog, Inc. (NASDAQ:DDOG) released its Q3 2025 financial results on November 6, 2025. Below is a summary of the key financial figures and business highlights from the report.

Financial Highlights

Revenue:
Achieved $886 million, representing a 28% increase year-over-year from $690 million in Q3 2024.
Operating Results:
GAAP operating loss: $(6) million, with an operating margin of (1%).
Non-GAAP operating income: $207 million, giving a non-GAAP operating margin of 23%.
Net Income:
GAAP net income per diluted share: $0.10 compared to $0.15 in the same quarter last year (down 33%).
Non-GAAP net income per diluted share: $0.55, which is an increase from $0.46 in Q3 2024 (about 20% increase).
Cash Flow:
Operating cash flow was $251 million.
Free cash flow totaled $214 million.
Cash Reserves:
As of September 30, 2025, the company held $4.1 billion in cash, cash equivalents, and marketable securities.

Customer Metrics

Datadog has grown its customer base significantly:
4,060 customers with an ARR of $100,000 or more, which is a 16% increase year-over-year from approximately 3,490.

Business Highlights

Market Recognition:
Datadog was named a leader in the 2025 Gartner® Magic Quadrant™ for Digital Experience Monitoring for the second consecutive year, recognized for its Ability to Execute.
Platform Development:
Reached a milestone of over 1,000 integrations on the Datadog unified platform.
Product Innovations:
Launched a full stack of AI Observability and Security products and introduced products such as Bits AI Agents and Datadog MCP Server.
Expanded Services:
Enhanced support for Oracle Cloud Infrastructure (OCI) to include new integrations for GPU monitoring and cloud management.

Corporate Actions

Board Appointment:
Ami Vora was appointed to the Board of Directors, bringing over 20 years of experience from leading tech firms.
Dividends and Share Repurchases:
Datadog did not declare a quarterly dividend or announce any share repurchase program in this quarter.

Future Outlook

Fourth Quarter 2025 Guidance:
Revenue is projected between $912 million and $916 million.
Non-GAAP operating income expected to be between $216 million and $220 million.
Non-GAAP net income per share projected to be between $0.54 and $0.56.
Full Year 2025 Forecast:
Revenue expected between $3.386 billion and $3.390 billion.
Non-GAAP operating income estimated to be between $754 million and $758 million.
Non-GAAP net income per share projected to be between $2.00 and $2.02.

Summary

Datadog’s Q3 2025 financial results demonstrate robust growth, notably in revenue, with significant advancements in customer metrics and product offerings. As the company gears up for the upcoming quarters, the positive outlook indicates confidence in maintaining its growth trajectory amidst ongoing challenges in the tech landscape.

	Three Months Ended		Nine Months Ended
	September 30, 2025	September 30, 2024	September 30, 2025	September 30, 2024
Revenue	$885,651	$690,016	$2,473,964	$1,946,548
Cost of revenue(1)(2)(3)	$176,457	$137,756	$500,063	$371,353
Gross profit	$709,194	$552,260	$1,973,901	$1,575,195
Operating expenses:
Research and development(1)(3)	$401,982	$291,802	$1,130,525	$836,389
Sales and marketing(1)(2)(3)	$238,729	$187,772	$692,046	$548,658
General and administrative(1)(3)(4)	$74,292	$52,408	$205,059	$145,256
Total operating expenses	$715,003	$531,982	$2,027,630	$1,530,303
Operating (loss) income	-$5,809	$20,278	-$53,729	$44,892
Other income:
Interest expense(5)	-$2,421	-$1,574	-$8,459	-$4,425
Interest income and other income, net	$43,897	$37,432	$135,739	$109,647
Other income, net	$41,476	$35,858	$127,280	$105,222
Income before provision for income taxes	$35,667	$56,136	$73,551	$150,114
Provision for income taxes	$1,782	$4,439	$12,377	$11,962
Net income	$33,885	$51,697	$61,174	$138,152
Net income per share – basic	$0.10	$0.15	$0.18	$0.41
Net income per share – diluted	$0.10	$0.14	$0.18	$0.39
Weighted average shares used in calculating net income per share:
Basic	348,645	337,562	346,012	334,779
Diluted	362,001	357,635	361,905	357,331

	September 30, 2025	December 31, 2024
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$540,602	$1,246,983
Marketable securities	$3,599,737	$2,942,076
Accounts receivable, net of allowance for credit losses of $18,150 and $16,302	$549,648	$598,919
Deferred contract costs, current	$67,201	$56,095
Prepaid expenses and other current assets	$80,917	$67,042
Total current assets	$4,838,105	$4,911,115
Property and equipment, net	$307,609	$226,970
Operating lease assets	$218,682	$172,512
Goodwill	$530,043	$360,381
Intangible assets, net	$16,810	$3,711
Deferred contract costs, non-current	$105,943	$86,573
Other assets	$35,278	$24,077
TOTAL ASSETS	$6,052,470	$5,785,339
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$135,243	$107,731
Accrued expenses and other current liabilities	$175,198	$127,136
Operating lease liabilities, current	$35,989	$31,970
Convertible senior notes, net, current	$—	$634,023
Deferred revenue, current	$974,264	$961,853
Total current liabilities	$1,320,694	$1,862,713
Operating lease liabilities, non-current	$260,926	$196,905
Convertible senior notes, net, non-current	$982,402	$979,282
Deferred revenue, non-current	$29,028	$22,693
Other liabilities	$20,302	$9,383
Total liabilities	$2,613,352	$3,070,976
STOCKHOLDERS’ EQUITY:
Common stock	$3	$3
Additional paid-in capital	$3,335,703	$2,689,013
Accumulated other comprehensive income (loss)	$12,190	-$4,701
Retained earnings	$91,222	$30,048
Total stockholders’ equity	$3,439,118	$2,714,363
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$6,052,470	$5,785,339