Datadog Inc (DDOG)

Pretax 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
Earnings before tax but after interest (EBT) (ttm)	US$ in thousands	189,551	203,940	207,381	175,545	126,844	60,235	-22,886	-70,245	-69,348	-38,070	-3,684	14,608	4,961	-18,422	-42,121	-51,909	-41,425	-22,222	-5,803	4,624
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
Pretax margin		6.69%	7.60%	8.18%	7.33%	5.62%	2.83%	-1.14%	-3.70%	-3.87%	-2.27%	-0.24%	1.07%	0.42%	-1.79%	-4.79%	-6.79%	-6.18%	-3.68%	-1.08%	0.96%

March 31, 2025 calculation

Pretax margin = EBT (ttm) ÷ Revenue (ttm)
= $189,551K ÷ $2,834,575K
= 6.69%

The pretax margin of Datadog Inc. exhibits significant variability over the specified period, reflecting evolving operational profitability and regulatory influences. During the fiscal year ending June 30, 2020, the pretax margin was marginally positive at 0.96%, indicating near breakeven performance. This margin declined sharply in subsequent quarters, turning negative by September 30, 2020, with a value of -1.08%, and further deteriorated through December 31, 2020, reaching -3.68%. The downward trend persisted into 2021, with margins becoming increasingly negative, culminating at -6.79% on June 30, 2021.

Throughout 2021, the pretax margin showed signs of gradual recovery, narrowing to -4.79% as of September 30, 2021, and improving further to -1.79% by December 31, 2021. The trend reversed in early 2022, with margins crossing into positive territory for the first time since 2020 at 0.42% by March 31, 2022, and slightly increasing to 1.07% at June 30, 2022. The margins remained volatile, swinging around the break-even point through September 2022, ending that period at -0.24%, and then declining again to -2.27% by December 31, 2022.

In 2023, the pretax margin continued to fluctuate negatively, with a decrease to -3.87% on March 31, indicating ongoing operational challenges. However, in the second quarter of 2023, the margin slightly improved to -3.70%. A notable turnaround occurred in the third quarter of 2023, with the margin moving into positive territory at 2.83% for December 31, 2023, signaling a shift toward profitability. This positive trend intensified in the first quarter of 2024, reaching 5.62%, followed by further increases to 7.33% as of June 30, 2024, and 8.18% at September 30, 2024. The margin slightly declined to 7.60% at the end of 2024 but remained strong.

By March 31, 2025, the pretax margin stood at 6.69%, maintaining a substantially positive level and indicating sustained operational profitability. Overall, the company's pretax margin trajectory reflects a period of considerable volatility, characterized by initial losses and negative margins throughout much of 2020 and 2021, followed by a gradual and sustained shift towards profitability beginning in late 2023 and continuing into 2025.