Datadog, Inc. stock research
FY2023 Q2
Datadog (DDOG) Gross Margin — Quarter Ended Jun 30, 2023
Revenue and gross profit grew compared to the prior quarter and the same quarter a year ago. Gross margin improved both sequentially and year over year, indicating a stronger relationship between revenue and cost of revenue.
Gross margin takeaway
Quarter ended Jun 30, 2023 · FY2023 Q2
Revenue and gross profit grew compared to the prior quarter and the same quarter a year ago. Gross margin improved both sequentially and year over year, indicating a stronger relationship between revenue and cost of revenue.
- The gross margin rate increased in the current quarter compared to both the immediate preceding quarter and the same quarter one year prior. This improvement reflects a higher gross profit relative to revenue.
- Compared to the prior quarter, revenue and gross profit increased while cost of revenue also increased, but at a slower pace leading to a higher gross margin. Year over year, similar trends were observed with revenue growth outpacing cost growth, resulting in improved margin.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
80.0%
Gross profit
$407.6M
Revenue
$509.5M
Cost of revenue
$101.8M
Quarter-over-quarter change
+0.8 pts
Year-over-year change
+0.2 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| Mar 31, 2023 | $481.7M | $381.8M | $99.9M | 79.3% |
| Jun 30, 2023 | $509.5M | $407.6M | $101.8M | 80.0% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Mar 31, 2023
+0.8 pts
Year-over-year change
Jun 30, 2022
+0.2 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The gross margin rate increased in the current quarter compared to both the immediate preceding quarter and the same quarter one year prior. This improvement reflects a higher gross profit relative to revenue.
Compared to the prior quarter, revenue and gross profit increased while cost of revenue also increased, but at a slower pace leading to a higher gross margin. Year over year, similar trends were observed with revenue growth outpacing cost growth, resulting in improved margin.
Monitor the pace of usage growth from existing customers, which the filing notes has slowed amid macroeconomic uncertainty.