Datadog, Inc. stock research
FY2024 Q4
Datadog (DDOG) Gross Margin — Quarter Ended Dec 31, 2024
Revenue and gross profit increased compared with the prior quarter and the same quarter last year. The gross margin improved slightly from the immediately preceding quarter but was lower than the year-ago quarter as cost of revenue grew at a faster pace relative to revenue.
Gross margin takeaway
Quarter ended Dec 31, 2024 · FY2024 Q4
Revenue and gross profit increased compared with the prior quarter and the same quarter last year. The gross margin improved slightly from the immediately preceding quarter but was lower than the year-ago quarter as cost of revenue grew at a faster pace relative to revenue.
- The strongest observable margin driver this quarter is the sequential expansion of gross margin, supported by revenue growth that outpaced the increase in cost of revenue when compared with the prior quarter.
- Relative to the prior quarter, revenue and gross profit increased while gross margin improved. Compared with the same quarter last year, revenue and gross profit were higher, but gross margin weakened as cost of revenue increased more rapidly.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
80.5%
Gross profit
$593.5M
Revenue
$737.7M
Cost of revenue
$144.2M
Quarter-over-quarter change
+0.4 pts
Year-over-year change
-1.8 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, 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% |
| Dec 31, 2024 | $737.7M | $593.5M | $144.2M | 80.5% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Sep 30, 2024
+0.4 pts
Year-over-year change
Dec 31, 2023
-1.8 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable margin driver this quarter is the sequential expansion of gross margin, supported by revenue growth that outpaced the increase in cost of revenue when compared with the prior quarter.
Relative to the prior quarter, revenue and gross profit increased while gross margin improved. Compared with the same quarter last year, revenue and gross profit were higher, but gross margin weakened as cost of revenue increased more rapidly.
Monitor the trajectory of cost of revenue relative to revenue, as its faster year-over-year growth has compressed gross margin.