Datadog (DDOG) Releases Q2 2025 Results

Datadog, Inc. (NASDAQ:DDOG) is one of the Best Cloud Computing Stocks to Invest in Now. On August 7, the company released its Q2 2025 results, with 28% YoY revenue growth, $200 million in operating cash flow, and $165 million in FCF. As of June 30, 2025, the company had ~3,850 customers with ARR of $100,000 or more, reflecting a rise of 14% from about 3,390 as of June 30, 2024. Datadog, Inc. (NASDAQ:DDOG) sees an overall strong demand environment with an ongoing healthy pace of cloud migration and digital transformation, while churn remained low with gross revenue retention stable in the mid- to high 90s.

Datadog, Inc. (NASDAQ:DDOG) opines that AI is a tailwind as higher cloud consumption fuels increased usage of its platform. Furthermore, next-gen AI brings in new complexity and observability challenges. Datadog, Inc. (NASDAQ:DDOG)’s AI observability products help customers gain visibility and deploy with confidence throughout the entire AI stack, which includes GPU monitoring, LLM observability, AI agent observability, and data observability. For Q3 2025, the company expects revenue in the range of $847 million – $851 million, and non-GAAP operating income of $176 million – $180 million.

Baron Funds, an investment management company, released its Q2 2025 investor letter. Here is what the fund said:

“Within IT, performance was strongest in systems software, driven by Cloudflare, Snowflake, Zscaler, and Datadog, Inc. (NASDAQ:DDOG), and semiconductors led by NVIDIA, Taiwan Semiconductor (TSMC), and indie Semiconductor. Datadog’s shares had a correction of 43% during the first half. At the same time, we judged their reported financial results to be strong and improving. The company demonstrated success expanding into the lucrative enterprise segment with new logo annual contract value up 70% year-on-year and gross retention of existing logos exceeding 99%. Datadog is seeing success with AI native companies, serving 8 of the top 10 AI companies including OpenAI, Anthropic, Cursor, Scale AI, and Replit. Four of these customers tripled spending with Datadog in 2024. Datadog’s innovation velocity helps strengthen its platform, and underpins a long duration of growth, supported by continual annual share gains.”

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Disclosure: None. This article is originally published at Insider Monkey.