Revenue growth accelerated to 35.6% YoY in 2026Q2 with gross margin at 78.6%, yet operating margin remains thin at 0.5% as R&D and SG&A total 78% of revenue.
Datadog, Inc. (DDOG) annual income statement — 9-year revenue, gross profit & net income history
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 |
|---|
| Sales/Revenue | 3.97B | 3.43B | 2.68B | 2.13B | 1.68B | 1.03B | 603.47M | 362.78M | 198.08M | 100.76M |
| Revenue Growth % | 31.52% | 27.68% | 26.12% | 27.06% | 62.82% | 70.48% | 66.34% | 83.15% | 96.58% | - |
| Cost of Goods Sold | 812.69M | 686.96M | 515.53M | 409.91M | 346.74M | 234.25M | 130.2M | 88.95M | 46.53M | 23.41M |
| COGS % of Revenue | - | 20.04% | 19.21% | 19.26% | 20.7% | 22.77% | 21.57% | 24.52% | 23.49% | 23.24% |
| Gross Profit | 3.15B | 2.74B | 2.17B | 1.72B | 1.33B | 794.54M | 473.27M | 273.83M | 151.55M | 77.35M |
| Gross Margin % | 79.51% | 79.96% | 80.79% | 80.74% | 79.3% | 77.23% | 78.43% | 75.48% | 76.51% | 76.76% |
| Gross Profit Growth % | - | 26.35% | 26.2% | 29.37% | 67.19% | 67.88% | 72.83% | 80.69% | 95.93% | - |
| Operating Expenses | 3.14B | 2.78B | 2.11B | 1.75B | 1.39B | 813.7M | 487.04M | 293.97M | 162.58M | 80.3M |
| OpEx % of Revenue | - | 81.25% | 78.77% | 82.31% | 82.8% | 79.09% | 80.71% | 81.03% | 82.08% | 79.7% |
| Selling, General & Admin | 1.41B | 1.24B | 961.76M | 789.47M | 634.7M | 393.93M | 276.42M | 182.55M | 107.41M | 55.57M |
| SG&A % of Revenue | - | 36.07% | 35.83% | 37.09% | 37.89% | 38.29% | 45.8% | 50.32% | 54.22% | 55.15% |
| Research & Development | 1.73B | 1.55B | 1.15B | 962.45M | 752.35M | 419.77M | 210.63M | 111.42M | 55.18M | 24.73M |
| R&D % of Revenue | - | 45.18% | 42.94% | 45.22% | 44.91% | 40.8% | 34.9% | 30.71% | 27.86% | 24.55% |
| Other Operating Expenses | -33K | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Operating Income | 14.96M | -44.37M | 54.28M | -33.46M | -58.7M | -19.16M | -13.77M | -20.14M | -11.03M | -2.96M |
| Operating Margin % | 0.38% | -1.29% | 2.02% | -1.57% | -3.5% | -1.86% | -2.28% | -5.55% | -5.57% | -2.93% |
| Operating Income Growth % | - | -181.74% | 262.22% | 42.99% | -206.41% | -39.08% | 31.61% | -82.54% | -273.24% | - |
| EBITDA | 114.09M | 11.38M | 109.22M | 11M | -24.07M | 3.78M | 1.68M | -7.77M | -5.01M | -252K |
| EBITDA Margin % | 2.88% | 0.33% | 4.07% | 0.52% | -1.44% | 0.37% | 0.28% | -2.14% | -2.53% | -0.25% |
| EBITDA Growth % | 210.05% | -89.58% | 892.79% | 145.71% | -736.33% | 125.52% | 121.58% | -55.18% | -1886.9% | - |
| D&A (Non-Cash Add-back) | 49.6M | 55.76M | 54.93M | 44.47M | 34.63M | 22.94M | 15.45M | 12.37M | 6.03M | 2.7M |
| EBIT | 213.66M | 138.08M | 211.01M | 66.54M | -21.54M | 2.63M | 8.21M | -15.94M | -10.24M | -2.96M |
| Net Interest Income | 220.59M | 183.37M | 148.25M | 97.16M | 18.4M | 360K | -9.2M | 0 | 0 | 0 |
| Interest Income | 247.57M | 194.42M | 155.32M | 103.46M | 34.93M | 21.41M | 21.23M | 0 | 0 | 0 |
| Interest Expense | 26.98M | 11.06M | 7.07M | 6.3M | 16.54M | 21.05M | 30.43M | 0 | 0 | 0 |
| Other Income/Expense | 184.84M | 171.39M | 149.66M | 93.7M | 20.63M | 734K | -8.45M | 4.16M | 793K | 843K |
| Pretax Income | 199.8M | 127.02M | 203.94M | 60.23M | -38.07M | -18.42M | -22.22M | -15.98M | -10.24M | -2.11M |
| Pretax Margin % | 5.04% | 3.71% | 7.6% | 2.83% | -2.27% | -1.79% | -3.68% | -4.4% | -5.17% | -2.1% |
| Income Tax | 22.22M | 19.28M | 20.19M | 11.67M | 12.09M | 2.32M | 2.33M | 734K | 522K | 457K |
| Effective Tax Rate % | 11.12% | 15.18% | 9.9% | 19.37% | -31.76% | -12.61% | -10.46% | -4.59% | -5.1% | -21.63% |
| Net Income | 177.58M | 107.74M | 183.75M | 48.57M | -50.16M | -20.75M | -24.55M | -16.71M | -10.76M | -2.57M |
| Net Margin % | 4.48% | 3.14% | 6.85% | 2.28% | -2.99% | -2.02% | -4.07% | -4.61% | -5.43% | -2.55% |
| Net Income Growth % | 42.55% | -41.36% | 278.33% | 196.83% | -141.79% | 15.49% | -46.9% | -55.27% | -318.75% | - |
| Net Income (Continuing) | 177.58M | 107.74M | 183.75M | 48.57M | -50.16M | -20.75M | -24.55M | -16.71M | -10.76M | -2.57M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| EPS (Diluted) | 0.48 | 0.30 | 0.51 | 0.14 | -0.16 | -0.07 | -0.08 | -0.12 | -0.15 | -0.03 |
| EPS Growth % | 42.95% | -41.18% | 264.29% | 187.5% | -138.45% | 17.87% | 31.92% | 20% | -364.4% | - |
| EPS (Basic) | - | 0.31 | 0.55 | 0.15 | -0.16 | -0.07 | -0.08 | -0.12 | -0.15 | -0.03 |
| Diluted Shares Outstanding | 368.27M | 363.47M | 358.64M | 350.29M | 315.41M | 309.05M | 300.35M | 139.87M | 70.95M | 79.57M |
| Basic Shares Outstanding | 354.77M | 347.31M | 336.17M | 324.03M | 315.41M | 309.05M | 300.35M | 139.87M | 70.95M | 79.57M |
| Dividend Payout Ratio | - | - | - | - | - | - | - | - | - | - |
Quick answers to the most common questions about buying DDOG stock.
For fiscal year 2025, Datadog, Inc. (DDOG) reported total revenue of $3.43B. This represents a 3301.3% increase compared to $100.8M in 2017.
Datadog, Inc. (DDOG) is profitable, generating $107.7M in net income for the fiscal year ending 2025 with a net profit margin of 3.1%.
Datadog, Inc. (DDOG) reported an operating income of $-44.4M, resulting in an operating profit margin of -1.3%. This margin reflects the operational efficiency of the business before interest and taxes.
Datadog, Inc. (DDOG) generated $2.74B in gross profit for the year, representing a gross profit margin of 80.0%. This demonstrates the company's core pricing power and production efficiency.
Key Metrics
Top Statement Risk
SBC masking true profitability
Metrics are mathematically derived from official filings.
Revenue Growth Reaccelerates on AI Workloads
According to the latest quarterly report, DDOG's revenue growth accelerated to 35.6% YoY in 2026Q2, up from 28.1% in 2025Q2, suggesting AI-driven demand is boosting consumption.
The sequential acceleration from 32.2% in 2026Q1 to 35.6% in 2026Q2 indicates that the AI observability narrative is translating into tangible revenue. This marks a clear inflection from the deceleration seen through 2024 and early 2025, when growth hovered in the mid-20s. The durability of this acceleration will depend on whether AI workloads represent a sustained expansion of the total addressable market or a temporary surge in cloud optimization cycles.
Gross Margin Stability Amidst Scale
Gross margin has remained remarkably stable around 80% over the past ten quarters, with 2026Q2 at 78.6%, indicating efficient cloud infrastructure management despite rapid revenue growth.
The slight dip from 82.0% in 2024Q1 to 78.6% in 2026Q2 suggests that while the multi-tenant architecture remains efficient, there may be incremental costs associated with supporting AI workloads or increased data ingestion. However, the consistency of the gross margin within a narrow band of 78-82% demonstrates pricing power and cost discipline. Investors should monitor whether the margin erosion trend continues as the company scales into lower-margin product lines or if it stabilizes.
Operating Leverage Elusive as Spending Outpaces Revenue
Despite revenue growth of 35.6% in 2026Q2, operating margin improved only to 0.5% from -4.1% a year earlier, as R&D and SG&A expenses grew at a similar pace, indicating limited operating leverage.
The company's operating income has swung from losses in 2025 to marginal profits in 2026, but the magnitude of improvement is modest relative to the revenue surge. R&D expenses grew 23% YoY in 2026Q2, while SG&A grew 30%, roughly in line with revenue growth, suggesting that management is still prioritizing investment over margin expansion. This may be a deliberate strategy to capture the AI opportunity, but it means that operating leverage will only materialize if revenue growth remains above 30% while expense growth decelerates.
SBC Distorts Earnings Quality
Stock-based compensation reached $220.3M in 2026Q2, exceeding operating income of $5.5M, implying that reported net income of $44.6M is entirely dependent on non-operating items and tax benefits.
The gap between GAAP operating income and net income is striking: despite an operating profit of only $5.5M, net income was $44.6M, likely due to interest income and tax effects. SBC as a percentage of revenue has hovered around 20%, which is high even for SaaS peers. This suggests that the company's cash profitability is far stronger than GAAP earnings indicate, but it also means that investors should adjust for SBC to assess true economic earnings. The recent positive net income may be flattered by one-time items, warranting a closer look at the cash flow statement.
R&D and S&M Drive Investment-Heavy Model
In 2026Q2, R&D and SG&A combined totaled $875.9M, representing 78% of revenue, underscoring a cost structure heavily weighted toward product development and go-to-market, typical of a hyper-growth SaaS.
R&D spending of $478.0M in 2026Q2 is the largest cost line, reflecting the company's commitment to expanding its platform into new areas like AI observability and security. SG&A at $397.9M is also substantial, indicating aggressive sales and marketing to land new customers and expand existing ones. The combined ratio of these expenses to revenue has remained above 75% for the past year, showing that management is deliberately sacrificing near-term profitability to fuel growth. This strategy is sustainable as long as revenue growth remains high, but any slowdown could expose the fixed-cost nature of these investments.
2025Q2 Marks the Trough and Turnaround
The most significant inflection occurred in 2025Q2, when operating margin hit -4.1% and net income nearly zero, followed by a steady recovery to positive operating income by 2026Q1, signaling a strategic pivot toward profitability.
In 2025Q2, the company reported an operating loss of $34.1M and net income of just $2.6M, likely reflecting heavy investments and possibly a trough in cloud spending. From that point, operating margin improved each quarter, reaching +0.5% by 2026Q2, while revenue growth accelerated. This inflection suggests that management successfully navigated a period of cost optimization by customers and emerged with a leaner cost base and stronger AI-driven demand. The lasting impact is a more balanced approach between growth and profitability, though the absolute margins remain thin.
SBC and Guidance Raise Red Flags
Despite the strong Q2 beat, forward revenue guidance of $1.135B–$1.145B implies only ~2% sequential growth, which is conservative relative to the 35.6% YoY momentum, and SBC continues to mask true cash profitability.
Short-sellers would argue that the company's GAAP profitability is an illusion, as SBC of $220.3M in 2026Q2 far exceeds operating income, and the positive net income is partly due to interest income and tax benefits. The conservative guidance, despite a beat, may indicate that management sees a deceleration ahead, possibly due to tougher AI comps or pipeline timing. Additionally, the low cash balance of $401M, if accurate, could limit strategic flexibility, though it may be a data artifact. Investors should scrutinize whether the recent acceleration is sustainable or a one-time boost from AI-related workloads.