Datadog(US:DDOG) ZACKSยท2025-05-07 15:40Core Insights - Datadog reported a non-GAAP EPS of 46 cents for Q1 2025, a 4.5% increase year-over-year, exceeding the Zacks Consensus Estimate by 9.52% [1] - The company's net revenues reached $761.6 million, reflecting a year-over-year growth of 24.6% and surpassing the consensus estimate by 3% [1] Customer Metrics - Datadog ended Q1 2025 with 30,500 customers, an increase from approximately 28,000 in the same period last year [2] - The number of customers with an annual run rate (ARR) of $100,000 or more rose to 3,770, up from about 3,340 year-over-year, contributing to 88% of total ARR [2] Product Usage - As of the end of Q1, 83% of customers utilized two or more products, up from 82% in the previous year [3] - 51% of customers used four or more products, an increase from 47% year-over-year [3] - The trailing 12-month net revenue retention percentage remained in the high 0.10% range, consistent with the prior quarter [3] Financial Performance - Datadog's adjusted gross margin contracted by 290 basis points year-over-year to 80.3% [4] - Research and development expenses increased by 32.2% year-over-year to $225.7 million, representing 29.6% of revenues, up 170 basis points [4] - Sales and marketing expenses rose 24.8% year-over-year to $178.4 million, maintaining a flat percentage of revenues at 23.4% [4] - General and administrative expenses increased by 33.7% year-over-year to $41 million, accounting for 5.4% of revenues, up 40 basis points [5] - Non-GAAP operating income was reported at $166.5 million, compared to $164.5 million in the prior year [5] Balance Sheet and Cash Flow - As of March 31, 2025, Datadog had cash and equivalents totaling $4.4 billion, up from $4.2 billion at the end of 2024 [6] - Operating cash flow for the quarter was $272 million, an increase from $265 million in the previous quarter [6] - Free cash flow was reported at $244 million, compared to $241 million in the prior quarter [6] Guidance - For Q2 2025, Datadog expects revenues between $787 million and $791 million, with non-GAAP EPS projected in the range of 40-42 cents [7] - For the full year 2025, the company anticipates revenues between $3.215 billion and $3.235 billion, with non-GAAP EPS expected between $1.67 and $1.71 [8]