Datadog Inc (DDOG)
Profitability ratios
Return on sales
| 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 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% |
| Operating profit margin | 1.05% | 2.02% | 2.86% | 2.01% | 0.60% | -1.57% | -4.77% | -6.48% | -5.37% | -2.71% | -0.15% | 1.77% | 0.82% | -1.86% | -4.15% | -5.35% | -4.53% | -2.28% | -1.32% | -0.43% |
| 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% |
| Net profit margin | 5.85% | 6.85% | 7.58% | 6.81% | 5.11% | 2.28% | -1.72% | -4.38% | -4.68% | -2.99% | -0.91% | 0.48% | 0.17% | -2.02% | -5.01% | -7.03% | -6.57% | -4.07% | -1.39% | 0.73% |
The analysis of Datadog Inc.’s profitability ratios over the reported periods reveals a pattern of progressive improvement following a series of years characterized primarily by operational losses.
Gross Profit Margin: The company's gross profit margin has demonstrated a steady upward trajectory, reflecting enhanced efficiency in core operations and cost management. From a margin of 78.29% at June 30, 2020, it increased consistently, reaching approximately 81.52% by June 30, 2024, and further edging upward to 81.20% in September 2024 before slight adjustments in subsequent periods. This trend indicates sustained improvements in gross profitability, suggestive of effective cost control relative to revenue growth.
Operating Profit Margin: In contrast to gross profit margins, the operating profit margin has historically exhibited significant volatility. Early periods show marginally negative margins, with values around -0.43% at June 2020, declining further to as low as -6.48% by June 2023. However, from March 2024 onward, a consistent positive trend emerges, with margins turning positive for the first time since the initial periods. By June 2024, operating margins reached approximately 2.01%, and further improved to approximately 2.86% in September 2024. This indicates a turnaround in operational efficiency, with profitability achieving a positive level after previous losses.
Pretax Margin: Consistent with operational improvements, the pretax margin has transitioned from predominantly negative values, such as -3.68% in December 2020 and as low as -6.79% in June 2021, to sustained positive figures beginning in early 2024. Notably, in December 2023, the pretax margin finally turned positive at 2.83%, and further performances have reflected a strengthening pretax position, reaching above 8% in September 2024. This signifies enhanced profitability before tax obligations, driven by both operating improvements and better financial management.
Net Profit Margin: The net profitability trend mirrors the pretax margin trajectory. Initial reporting periods show negative margins, with the lowest at -7.03% in June 2021, indicative of cumulative operational and non-operational losses. However, beginning in March 2024, net margins turn positive, reaching approximately 5.11%, and progressing further to about 7.58% in September 2024. This shift signifies that Datadog has not only improved operational efficiency but has also achieved sustainable bottom-line profitability.
Summary: Overall, Datadog Inc.’s profitability ratios have undergone a significant transformation from predominantly negative margins in earlier periods to consistently positive margins in recent reporting periods. The gross profit margin’s steady increase suggests ongoing strength in core revenue generation and cost control. Simultaneously, the recent turn to positive operating, pretax, and net profit margins indicates a successful operational turnaround and enhanced profitability, reflecting the company's effective scaling and management strategies.
Return on investment
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 0.50% | 0.94% | 1.57% | 1.09% | 0.33% | -0.85% | -2.70% | -3.71% | -3.07% | -1.51% | -0.08% | 0.91% | 0.39% | -0.80% | -1.67% | -1.97% | -1.56% | -0.73% | -0.39% | -0.12% |
| Return on assets (ROA) | 2.76% | 3.18% | 4.15% | 3.70% | 2.78% | 1.23% | -0.97% | -2.51% | -2.67% | -1.67% | -0.50% | 0.25% | 0.08% | -0.87% | -2.01% | -2.59% | -2.26% | -1.30% | -0.41% | 0.20% |
| Return on total capital | 3.11% | 3.74% | 2.49% | 0.18% | -1.37% | -1.77% | -3.73% | -5.00% | -3.70% | -1.53% | 1.20% | 2.87% | 2.31% | 0.25% | -1.10% | -2.22% | -1.26% | 0.03% | -0.31% | 0.27% |
| Return on equity (ROE) | 5.68% | 6.77% | 7.31% | 6.77% | 5.23% | 2.40% | -1.91% | -5.04% | -5.55% | -3.56% | -1.08% | 0.54% | 0.18% | -1.99% | -4.60% | -5.89% | -5.24% | -2.56% | -0.80% | 0.38% |
The analyzed profitability ratios for Datadog Inc. from June 2020 through March 2025 indicate a trajectory marked initially by significant negative performance followed by a period of recovery and positive returns towards the end of the period.
Operating Return on Assets (Operating ROA):
The company’s Operating ROA was notably negative during the initial period, recording -0.12% on June 30, 2020, and deteriorating further to a low of -3.71% on June 30, 2023. This trend reflects challenges in generating operating profit relative to assets in the early years. However, from late 2023 onward, there is a marked improvement, with Operating ROA turning positive and reaching 1.57% on September 30, 2024, and slightly declining to 0.50% by March 2025. This suggests an enhancement in operational efficiency and profitability relative to assets.
Return on Assets (ROA):
ROA exhibited a similar pattern, starting at 0.20% on June 30, 2020, with persistent negative values through most of 2021 and 2022, reaching -2.67% on March 31, 2023. Subsequent quarters show a substantial turnaround, with the ROA turning positive again, achieving 1.23% on December 31, 2023, and climbing to as high as 4.15% in September 2024 before slightly receding to 2.76% in March 2025. This progression indicates that the company successfully improved its profitability relative to total assets in recent periods after a prolonged phase of losses.
Return on Total Capital:
The Return on Total Capital experienced volatility, with negative values common in the earlier periods. From -2.22% on June 30, 2021, the metric dipped to considerably negative levels, with a nadir of -5.00% on June 30, 2023. Nonetheless, the metric demonstrated a recovery, turning positive again at 2.49% on September 30, 2024, and reaching 3.11% on March 31, 2025. This signifies an improving efficiency in generating returns from the total capital invested, aligning with the company's overall positive trend toward profitability.
Return on Equity (ROE):
ROE's trajectory reveals a sustained period of negative returns from June 2020 through early 2023, with the lowest at -5.55% on March 31, 2023. Over time, the ratio exhibits a significant turnaround, turning positive and reaching 2.40% on December 31, 2023, and further ascending to 7.31% in September 2024. By March 2025, ROE remains robust at 5.68%, underscoring improved net profitability attributable to shareholders.
Summary:
Overall, Datadog Inc.'s profitability ratios reflect a historically challenging period characterized by negative returns, likely due to substantial investments, growth-phase expenses, or market conditions. Recently, however, there is a discernible trend of recovery, with positive and improving profitability metrics across all ratios. The data suggest that the company has managed to enhance operational efficiency and profitability, culminating in positive ROA, operating ROA, ROCE, and ROE in the latest periods. This improvement is indicative of a potential transition from losses to sustainable profitability, aligned with operational scaling and strategic execution.