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Sep 30, 2025
Datadog Q3 2025 Earnings Report
Datadog reported strong third-quarter results with revenue and free cash flow growth.
Key Takeaways
Datadog delivered solid Q3 results, achieving strong revenue growth and positive net income, driven by expanding enterprise adoption and innovation in AI observability and security tools.
Revenue reached $885,651,000, growing 28% year-over-year.
Net income was $33,885,000, with an EPS of $0.10.
Free cash flow totaled $213,952,000, with a margin of 24%.
The company surpassed 4,000 large customers with $100K+ ARR.
Forward Guidance
Datadog expects continued growth into Q4 2025 with strong operating income and stable EPS guidance.
Positive Outlook
- Q4 revenue guidance between $912M and $916M.
- Non-GAAP operating income expected between $216M and $220M.
- Non-GAAP EPS guidance between $0.54 and $0.56.
- FY25 revenue projected between $3.386B and $3.390B.
- Company continues to invest in AI and government markets.
Challenges Ahead
- GAAP operating income was a loss of $5.8M this quarter.
- Net income declined from $51.7M in Q3 2024 to $33.9M.
- Operating expenses increased significantly year-over-year.
- Free cash flow margin decreased from 30% to 24%.
- Uncertainty in reconciling GAAP to non-GAAP metrics limits visibility.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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