Revenue

Q3 2025

$787 million to $791 million (22%–23% YoY growth) "

$847 million to $851 million (23% YoY growth) "

raised

Non-GAAP Operating Income

Q3 2025

$148 million to $152 million (19% margin) "

$176 million to $180 million (21% margin) "

raised

Non-GAAP Net Income Per Share

Q3 2025

$0.40 to $0.42 "

$0.44 to $0.46 "

raised

Revenue

FY 2025

$3.215 billion to $3.235 billion (20%–21% growth) "

$3.312 billion to $3.322 billion (23%–24% YoY growth) "

raised

Non-GAAP Operating Income

FY 2025

$625 million to $645 million (19%–20% margin) "

$684 million to $694 million (21% margin) "

raised

Non-GAAP Net Income Per Share

FY 2025

$1.67 to $1.71 "

$1.80 to $1.83 "

raised

Net Interest and Other Income

FY 2025

$140 million "

$150 million "

raised

Cash Taxes

FY 2025

$30 million to $35 million "

$10 million to $20 million "

lowered

Non-GAAP Tax Rate

FY 2025

no prior guidance

21% "

no prior guidance

Capital Expenditures and Capitalized Software

FY 2025

4% to 5% "

4% to 5% "

no change

Consistent AI adoption

Q3 2024 saw AI-native customers grow from 2.5% to 6% ARR with 4 percentage points of YoY revenue growth. " " " Q4 2024 reported stable AI-native contribution at 6% ARR with renewals and year‐over‐year growth (3% to 6% ARR). " " " Q1 2025 recorded 8.5% ARR from AI-native customers contributing 6 growth points while cautioning potential volatility. " " "

Q2 2025 reported AI-native customers contributing 11% of revenues and 10 YoY revenue growth points, with strong growth and scaling while noting potential volatility. " " " " "

Strong, consistent growth with an increased share and a more bullish tone despite acknowledgement of volatility.

Emerging adoption of new AI-powered products

In Q3 2024, there were mentions of broader AI integrations and LLM observability usage " " " " and in Q4 2024 early discussions on AI agents and observability. " " " Q1 2025 did not mention the AI SRE agent explicitly. "

Q2 2025 highlighted the positive initial customer response and scaling efforts for the AI SRE agent, with explicit customer purchases. " " "

A new, more specific product focus has emerged in Q2 2025, building on earlier general AI integration themes.

Integrated observability platform

Q3 2024 highlighted multi-product adoption including 83% of customers using 2+ products and pipeline upsell opportunities. " " " Q4 2024 discussed customers consolidating tools with significant multi-product usage (e.g. 83% using 2+ and 12% using 8+ products). " Q1 2025 emphasized cross-selling success with expanding usage across products and major deals. " " "

Q2 2025 emphasized an integrated, end-to-end platform strategy that balances upselling and new customer acquisition. " "

Consistently emphasized across periods with robust cross‐sell growth and strategic platform integration.

Revenue volatility and uncertainty in bookings-to-revenue conversion

Q3 2024 discussed potential volatility from rapid AI-native growth and RPO fluctuations due to contract timing. " " " " Q4 2024 explained revenue volatility driven by renewals and invoicing timing. " " " Q1 2025 highlighted volatility risks from concentrated AI-native revenue and delayed booking conversion. " " " "

Q2 2025 acknowledged potential volatility from the rapidly growing AI-native cohort and inherent uncertainty in timing for bookings-to-revenue conversion, managed through conservative guidance. " "

A consistent concern across periods with cautious language; guidance remains conservative despite strong growth.

Competitive pressures – risk of customers in-housing observability solutions

Q3 2024 did not specifically address this risk; Q4 2024 noted that while very large customers might consider in-housing, it is rarely economically rational. " Q1 2025 cited boomerang customers returning after in-house experiments, reinforcing Datadog as the best long-term choice. "

Q2 2025 reiterated the strategy of continuous innovation and an integrated platform as key differentiators to mitigate the risk, with mention of customers returning from in-house efforts. " "

Consistently mentioned with a nuanced view that stresses innovation and platform completeness as countermeasures.

Sales, marketing, and R&D investment effectiveness

Q3 2024 mentioned growing international sales capacity and new deals though ROI was not detailed. " " " Q4 2024 provided detailed headcount expansions and recognized that returns from investments are typically delayed by 1–3 years. " " " " Q1 2025 noted robust investment with significant headcount growth and early productivity signals. " "

Q2 2025 did not specifically address ROI uncertainties, though it noted continued international investment and strategic scaling. "

Earlier periods provided detailed analysis of ROI challenges, while Q2 2025 placed less emphasis on short-term ROI, implying a steadier investment outlook.

Cloud hosting cost pressures impacting margins

Q1 2025 faced margin pressure from rising cloud costs and spiky customer growth, expecting future cost optimizations. " " " Q3 2024 discussed ongoing cost optimization efforts with marginal changes in gross margins. " Q4 2024 did not mention this topic explicitly.

Q2 2025 reported active efforts in optimizing cloud usage that led to an improved gross margin (80.9% vs. 80.3%), with further optimization expected in the second half. " " "

The sentiment has improved in Q2 2025 as proactive optimization reduces earlier margin pressures, shifting from concern to an optimistic outlook.

Global sales expansion into underpenetrated markets

Q3 2024 showcased specific successes in markets like India with a major 7‐figure deal, and Q4 2024 mentioned efforts in underserved geographies. " " " " Q1 2025 noted that international sales rep headcount grew in the mid-30s percent, indicating a focus on global expansion. "

Q2 2025 explicitly outlined strategies to expand in underpenetrated markets including India, Brazil, APJ, and the Middle East with intensified international investment. "

A continued and increasingly specific global expansion focus, with greater emphasis on targeted regions such as India in Q2 2025.

Decelerating RPO growth and forecasting challenges

Q3 2024 provided a detailed discussion on deceleration in RPO growth due to shifts in contract durations and forecast noise. " " Q4 2024 also touched on forecasting challenges related to billing and contract timing. " " Q1 2025 did not highlight this topic.

Q2 2025 did not explicitly emphasize decelerating RPO growth or forecasting challenges, though conservative guidance still accounted for variability. "

The topic is less emphasized in Q2 2025, suggesting a reduced focus or improved clarity in forecasting compared to earlier periods.

Limited monetization of AI training workloads

Q3 2024 highlighted challenges in monetizing GPU-based training jobs versus CPU instances and potential future pricing adjustments. " Q4 2024 explicitly explained that training workloads are not well monetized because of their distinct infrastructure needs. " Q1 2025 noted that Datadog focuses on inference rather than training workloads. "

Q2 2025 did not mention limited monetization of AI training workloads.

Although previously an emerging concern, this topic was not mentioned in Q2 2025, suggesting it may have receded from the immediate discussion.

Shifting sentiment on AI focus

Q3 2024 saw a transition from worries about resource diversion to optimism about moving AI experiments into production workloads. " " Q4 2024 featured a bullish narrative with robust AI-native growth. " " Q1 2025 maintained a positive outlook with strong AI-native contributions and a growing base of AI integrations. " "

Q2 2025 presented a highly bullish narrative emphasizing long-term AI opportunities, with strong AI-native growth and integrated AI observability across the stack. " " " "

There is a clear evolution toward greater bullish optimism on AI, moving away from earlier concerns about resource diversion toward recognizing AI as a key growth driver.