Cloud monitoring platform Datadog (NASDAQ:DDOG) reported Q4 CY2025 results exceeding the market’s revenue expectations, with sales up 29.2% year on year to $953.2 million. Guidance for next quarter’s revenue was optimistic at $956 million at the midpoint, 2.3% above analysts’ estimates. Its non-GAAP profit of $0.59 per share was 6.3% above analysts’ consensus estimates.
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Datadog (DDOG) Q4 CY2025 Highlights:
- Revenue: $953.2 million vs analyst estimates of $918.2 million (29.2% year-on-year growth, 3.8% beat)
- Adjusted EPS: $0.59 vs analyst estimates of $0.55 (6.3% beat)
- Adjusted Operating Income: $230.1 million vs analyst estimates of $220.2 million (24.1% margin, 4.5% beat)
- Revenue Guidance for Q1 CY2026 is $956 million at the midpoint, above analyst estimates of $934.8 million
- Adjusted EPS guidance for the upcoming financial year 2026 is $2.12 at the midpoint, missing analyst estimates by 9.5%
- Operating Margin: 1%, in line with the same quarter last year
- Free Cash Flow Margin: 30.5%, up from 24.2% in the previous quarter
- Customers: 4,310 customers paying more than $100,000 annually
- Billings: $1.21 billion at quarter end, up 33.5% year on year
- Market Capitalization: $39.98 billion
"We are pleased with our strong execution in fiscal year 2025, with 28% year-over-year revenue growth, $1,050 million in operating cash flow, and $915 million in free cash flow," said Olivier Pomel, co-founder and CEO of Datadog.
Company Overview
Named after a database the founders had to painstakingly look after at their previous company, Datadog (NASDAQ:DDOG) provides a software platform that helps organizations monitor and secure their cloud applications, infrastructure, and services.
Revenue Growth
Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Over the last five years, Datadog grew its sales at an incredible 41.5% compounded annual growth rate. Its growth surpassed the average software company and shows its offerings resonate with customers, a great starting point for our analysis.
We at StockStory place the most emphasis on long-term growth, but within software, a half-decade historical view may miss recent innovations or disruptive industry trends. Datadog’s annualized revenue growth of 26.9% over the last two years is below its five-year trend, but we still think the results suggest healthy demand. 
This quarter, Datadog reported robust year-on-year revenue growth of 29.2%, and its $953.2 million of revenue topped Wall Street estimates by 3.8%. Company management is currently guiding for a 25.5% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 19.3% over the next 12 months, a deceleration versus the last two years. Still, this projection is commendable and suggests the market is baking in success for its products and services.
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Billings
Billings is a non-GAAP metric that is often called “cash revenue” because it shows how much money the company has collected from customers in a certain period. This is different from revenue, which must be recognized in pieces over the length of a contract.
Datadog’s billings punched in at $1.21 billion in Q4, and over the last four quarters, its growth was fantastic as it averaged 28% year-on-year increases. This performance aligned with its total sales growth, indicating robust customer demand. The high level of cash collected from customers also enhances liquidity and provides a solid foundation for future investments and growth. 
Enterprise Customer Base
This quarter, Datadog reported 4,310 enterprise customers paying more than $100,000 annually, an increase of 250 from the previous quarter. That’s quite a bit more contract wins than last quarter and quite a bit above what we’ve observed over the previous year. Shareholders should take this as an indication that Datadog’s go-to-market strategy is working well.
Key Takeaways from Datadog’s Q4 Results
We were impressed by how significantly Datadog blew past analysts’ billings expectations this quarter. We were also happy its revenue outperformed Wall Street’s estimates. On the other hand, its full-year EPS guidance missed and its EPS guidance for next quarter fell short of Wall Street’s estimates. Overall, this was a mixed quarter, but it seems like this quarter was good enough. The stock traded up 8.7% to $124.35 immediately after reporting.
Big picture, is Datadog a buy here and now? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).