Datadog, Inc. stock research
FY2024 Q3
Datadog (DDOG) Gross Margin — Quarter Ended Sep 30, 2024
Revenue and gross profit both increased relative to the prior quarter and the same quarter last year, while gross margin decreased slightly. The cost of revenue grew at a higher rate than revenue, which weighed on gross margin.
Gross margin takeaway
Quarter ended Sep 30, 2024 · FY2024 Q3
Revenue and gross profit both increased relative to the prior quarter and the same quarter last year, while gross margin decreased slightly. The cost of revenue grew at a higher rate than revenue, which weighed on gross margin.
- The cost of revenue increased at a faster pace than revenue in both the sequential and year-over-year comparisons, leading to a lower gross margin. This was the most observable factor behind the margin change.
- Compared to the immediately preceding quarter, gross margin weakened from a higher level. Compared to the same quarter one year earlier, gross margin was also lower. Revenue and gross profit were higher in both comparisons.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
80.0%
Gross profit
$552.3M
Revenue
$690.0M
Cost of revenue
$137.8M
Quarter-over-quarter change
-0.8 pts
Year-over-year change
-1.1 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 |
|---|---|---|---|---|
| Dec 31, 2023 | $589.6M | $484.8M | $104.8M | 82.2% |
| Mar 31, 2024 | $611.3M | $501.2M | $110.1M | 82.0% |
| Jun 30, 2024 | $645.3M | $521.8M | $123.5M | 80.9% |
| Sep 30, 2024 | $690.0M | $552.3M | $137.8M | 80.0% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Jun 30, 2024
-0.8 pts
Year-over-year change
Sep 30, 2023
-1.1 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The cost of revenue increased at a faster pace than revenue in both the sequential and year-over-year comparisons, leading to a lower gross margin. This was the most observable factor behind the margin change.
Compared to the immediately preceding quarter, gross margin weakened from a higher level. Compared to the same quarter one year earlier, gross margin was also lower. Revenue and gross profit were higher in both comparisons.
Monitor the trend of cost of revenue growth relative to revenue growth in upcoming quarters.