Datadog Inc (DDOG)

Gross profit margin

		Mar 31, 2025	Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020
Gross profit (ttm)	US$ in thousands	2,271,309	2,168,334	2,059,397	1,951,354	1,837,393	1,718,243	1,606,273	1,504,990	1,421,589	1,328,357	1,214,764	1,078,986	931,224	794,539	672,165	585,700	520,383	473,269	424,514	376,390
Revenue (ttm)	US$ in thousands	2,834,575	2,684,275	2,536,197	2,393,717	2,257,898	2,128,359	2,008,109	1,897,106	1,793,784	1,675,100	1,531,899	1,365,854	1,193,265	1,028,784	880,117	764,304	670,767	603,466	539,579	480,768
Gross profit margin		80.13%	80.78%	81.20%	81.52%	81.38%	80.73%	79.99%	79.33%	79.25%	79.30%	79.30%	79.00%	78.04%	77.23%	76.37%	76.63%	77.58%	78.43%	78.68%	78.29%

March 31, 2025 calculation

Gross profit margin = Gross profit (ttm) ÷ Revenue (ttm)
= $2,271,309K ÷ $2,834,575K
= 80.13%

The gross profit margin of Datadog Inc. demonstrates a generally upward trend over the depicted period, reflecting an improvement in the company's ability to retain revenue after deducting the cost of goods sold. Starting from approximately 78.29% as of June 30, 2020, the margin experienced slight fluctuations within a narrow range throughout 2020 and 2021, with values oscillating between roughly 76.37% and 78.68%. Notably, the margin showed a gradual increase commencing in late 2021 and into 2022, reaching levels close to 79.00% by June 30, 2022, and confirming a steady improvement in profitability on a gross basis.

From the third quarter of 2022 onwards, the gross profit margin crossed the 79% threshold and continued its steady ascent. It achieved a peak of approximately 81.52% as of June 30, 2024, indicating a significant enhancement in gross profitability over a sustained period. Throughout the subsequent quarters, the margin remained relatively stable, with minor fluctuations around 80.78% to 81.20%. As of September 30, 2024, the gross profit margin slightly declined to approximately 80.78%, and further decreased to around 80.13% by March 31, 2025.

This steady upward trajectory in gross profit margin suggests that Datadog Inc. has progressively improved its efficiency in generating gross profit relative to its revenue. The enhancements could be attributed to factors such as better cost management, economies of scale, service pricing strategies, or a shift towards higher-margin offerings. The stability in margins during the latter part of the period indicates effective control of direct costs and a consistent revenue-generating capability.