Datadog Q3 2025 Earnings: Revenue Grows 28% as AI Customers Expand
Datadog's Q3 2025 revenue rose 28% year over year to $885.7 million, with growth from AI-related customers and large enterprise accounts, as the company raised its full-year revenue outlook.
| Q3 2025 | Reported |
|---|---|
| EPS | $0.10 |
| Revenue | $885.7M |
Figures as reported by the company to the SEC for the quarter ended September 30, 2025. Analyst estimates are not part of a filing, so no comparison to expectations is shown.
Key takeaways
- Revenue for the quarter came in just under $886 million, up 28% from a year earlier, as more customers expanded their usage of Datadog’s cloud monitoring and security tools.
- GAAP earnings per share was $0.10 for the quarter. The company also reports a higher non-GAAP profit figure that strips out stock-based compensation and other non-cash items, a common practice among software companies that grant a lot of employee stock.
- The number of large customers — those paying Datadog $100,000 or more a year — grew 16% year over year to roughly 4,060, showing bigger enterprises are leaning more heavily on the platform.
- So-called ‘AI native’ customers, companies built around artificial intelligence products, made up about 12% of revenue, up from roughly 6% a year earlier — a sign that AI companies are becoming a meaningful and fast-growing source of business.
- The trailing-twelve-month gross margin was about 79.5%, meaning Datadog keeps roughly 80 cents of every revenue dollar after covering the direct cost of running its service — a level typical of established cloud software businesses.
- Operating margin over the trailing year was close to breakeven (0.41%), reflecting continued heavy investment in engineering and sales even as the company scales; net profit margin over the same period was 4.48%.
- The company generated $214 million in free cash flow for the quarter — cash left over after running the business and capital spending — indicating growth is largely being funded internally.
- Management raised its full-year 2025 revenue outlook to a range of $3.386 billion to $3.390 billion and guided fourth-quarter revenue to $912 million to $916 million, implying growth would continue at a similar pace into year-end.
- Net revenue retention, a measure of how much existing customers increase their spending over time, held around 120%, and executives pointed to security products and AI-related demand as key growth drivers on the call.
Q3 2025 in context
| Metric | Sep 2025 | Sep 2024 | Change |
|---|---|---|---|
| Revenue | $886M | $690M | +28.4% |
| Net income | $34M | $52M | -34.5% |
| Free cash flow | $235M | $220M | +6.5% |
| Diluted EPS | $0.10 | $0.14 | -28.6% |
| Gross margin | 80.1% | 80.0% | +0.0 pts |
| Operating margin | -0.7% | 2.9% | -3.6 pts |
| Net margin | 3.8% | 7.5% | -3.7 pts |
Figures for the quarter ended Sep 2025 and the quarter ended Sep 2024, as reported to the SEC.
How the stock took it
Datadog Inc (Pre-Reincorporation) closed at $190.82 on Nov 6, 2025, the last session before the report, and at $199.72 on Nov 10, 2025, the first session after it — +4.7% across the report.
Closes from the market's daily record. Each figure spans the report date — from the last session that closed before it to the first that closed after — because a company may report before the open or after the close.
Sources: company report · earnings call