Datadog (DDOG) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue reached $762 million, up 25% year-over-year, driven by both existing and new customers, and above guidance.

• Customer base grew to about 30,500, with 3,770 customers generating $100,000+ ARR, accounting for 88% of ARR and up 13% year-over-year.

• Free cash flow was $244 million (32% margin), with operating cash flow at $272 million, reflecting robust liquidity.

• Strong platform adoption: 83% use 2+ products, 51% use 4+, and 28% use 6+.

• Notable acquisitions included Eppo (feature management/experimentation) and Metaplane (data observability), expanding platform capabilities.

Financial highlights

• Q1 revenue: $762 million (+25% year-over-year, +3% quarter-over-quarter).

• Gross profit: $612 million; gross margin: 80.3% (down from 83.3% year-ago); GAAP gross margin: 79%.

• Non-GAAP operating income: $167 million (22% margin); GAAP operating loss: $(12) million.

• Billings: $748 million (+21% year-over-year); RPO: $2.31 billion (+33% year-over-year), with most to be recognized in 24 months.

• Cash, equivalents, and securities: $4.4 billion as of March 31, 2025; free cash flow: $244 million (32% margin).

Outlook and guidance

• Q2 2025 revenue expected: $787–$791 million (+22–23% year-over-year); non-GAAP operating income: $148–$152 million.

• FY 2025 revenue guidance raised to $3.215–$3.235 billion (+20–21% year-over-year); non-GAAP operating income: $625–$645 million.

• FY 2025 non-GAAP EPS: $1.67–$1.71; Q2 non-GAAP EPS: $0.40–$0.42.

• Guidance reflects higher H1 revenue, unchanged H2 outlook, and increased OpEx from acquisitions and FX.

• Management expects continued investment in innovation, international expansion, and sales/marketing.