Datadog, Inc. stock research
FY2025 Q2
Datadog (DDOG) Gross Margin — Quarter Ended Jun 30, 2025
Revenue and gross profit both increased compared to the previous quarter and the same quarter last year. Gross margin improved slightly from the prior quarter but weakened compared to the same quarter one year ago.
Gross margin takeaway
Quarter ended Jun 30, 2025 · FY2025 Q2
Revenue and gross profit both increased compared to the previous quarter and the same quarter last year. Gross margin improved slightly from the prior quarter but weakened compared to the same quarter one year ago.
- The strongest observable driver is that cost of revenue grew more slowly than revenue compared to the prior quarter, supporting margin expansion. Compared to the year-ago quarter, cost of revenue grew faster than revenue, pressuring margins.
- Gross margin is higher than the immediately preceding quarter but lower than the same quarter one year earlier. Revenue growth outpaced cost of revenue growth sequentially, while the reverse was true on a year-over-year basis.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
79.9%
Gross profit
$660.8M
Revenue
$826.8M
Cost of revenue
$166.0M
Quarter-over-quarter change
+0.6 pts
Year-over-year change
-0.9 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 |
|---|---|---|---|---|
| Sep 30, 2024 | $690.0M | $552.3M | $137.8M | 80.0% |
| Dec 31, 2024 | $737.7M | $593.5M | $144.2M | 80.5% |
| Mar 31, 2025 | $761.6M | $603.9M | $157.6M | 79.3% |
| Jun 30, 2025 | $826.8M | $660.8M | $166.0M | 79.9% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Mar 31, 2025
+0.6 pts
Year-over-year change
Jun 30, 2024
-0.9 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable driver is that cost of revenue grew more slowly than revenue compared to the prior quarter, supporting margin expansion. Compared to the year-ago quarter, cost of revenue grew faster than revenue, pressuring margins.
Gross margin is higher than the immediately preceding quarter but lower than the same quarter one year earlier. Revenue growth outpaced cost of revenue growth sequentially, while the reverse was true on a year-over-year basis.
Monitor the relationship between revenue growth and cost of revenue growth in subsequent quarters, as it has shifted between sequential and year-over-year comparisons.