Datadog Announces Fourth Quarter and Fiscal Year 2025 Financial Results

Core Insights - Datadog reported a fourth quarter revenue of $953 million, reflecting a 29% year-over-year growth, and a fiscal year revenue of $3.43 billion, up 28% from the previous year [1][6][30] - The company has expanded its customer base significantly, with 603 customers generating over $1 million in annual recurring revenue (ARR), a 31% increase from 462 customers a year ago [6][30] - Datadog launched several new features including Bits AI SRE Agent, Storage Management, Feature Flags, and Data Observability, aimed at enhancing its AI-powered observability and security platform [1][5] Financial Highlights - For Q4 2025, GAAP operating income was $9 million with a GAAP operating margin of 1%, while non-GAAP operating income was $230 million, resulting in a non-GAAP operating margin of 24% [6][30] - The company achieved an operating cash flow of $327 million and free cash flow of $291 million in Q4 2025 [6][30] - For the fiscal year 2025, GAAP operating loss was $(44) million, with a non-GAAP operating income of $768 million, leading to a non-GAAP operating margin of 22% [6][30] Customer Metrics - As of December 31, 2025, Datadog had approximately 4,310 customers with ARR of $100,000 or more, marking a 19% increase from 3,610 customers in the previous year [6][30] - The growth in larger customers indicates strong demand for Datadog's services as organizations migrate to the cloud and adopt next-generation AI technologies [2][6] Strategic Developments - Datadog expanded its collaboration with AWS, introducing new capabilities in AI, observability, and security, including LLM Observability and AI Security for AWS Resources [6][30] - The company is focused on delivering more AI-powered innovations to assist customers with complex challenges in observability, security, software delivery, service management, and product analytics [2][6] Outlook - For Q1 2026, Datadog expects revenue between $951 million and $961 million, with non-GAAP operating income projected between $195 million and $205 million [7][13] - The fiscal year 2026 revenue outlook is between $4.06 billion and $4.10 billion, with non-GAAP operating income anticipated between $840 million and $880 million [7][13]