Datadog, Inc. stock research
FY2025 Q3
Datadog (DDOG) Gross Margin — Quarter Ended Sep 30, 2025
Revenue increased compared to the prior quarter and the same quarter a year ago, while gross profit rose in line with revenue. Cost of revenue also grew, but gross margin remained stable, showing a consistent relationship among these metrics.
Gross margin takeaway
Quarter ended Sep 30, 2025 · FY2025 Q3
Revenue increased compared to the prior quarter and the same quarter a year ago, while gross profit rose in line with revenue. Cost of revenue also grew, but gross margin remained stable, showing a consistent relationship among these metrics.
- Gross margin was higher than the immediately preceding quarter and slightly above the same quarter one year ago, indicating a modest improvement. The stable margin trend suggests that revenue growth outpaced cost of revenue growth on a relative basis.
- Compared to the prior quarter, both revenue and gross profit were higher, and gross margin improved slightly. Versus the same quarter last year, revenue and gross profit were also higher, with gross margin remaining broadly stable.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
80.1%
Gross profit
$709.2M
Revenue
$885.7M
Cost of revenue
$176.5M
Quarter-over-quarter change
+0.2 pts
Year-over-year change
+0.0 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, 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% |
| Sep 30, 2025 | $885.7M | $709.2M | $176.5M | 80.1% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Jun 30, 2025
+0.2 pts
Year-over-year change
Sep 30, 2024
+0.0 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
Gross margin was higher than the immediately preceding quarter and slightly above the same quarter one year ago, indicating a modest improvement. The stable margin trend suggests that revenue growth outpaced cost of revenue growth on a relative basis.
Compared to the prior quarter, both revenue and gross profit were higher, and gross margin improved slightly. Versus the same quarter last year, revenue and gross profit were also higher, with gross margin remaining broadly stable.
Monitor whether cost of revenue continues to grow at a slower pace than revenue to sustain the current gross margin level.