Datadog, Inc. reported significant financial growth in its latest 10-Q filing for the third quarter and the nine months ended September 30, 2024. The company achieved revenue of $690.0 million for Q3 2024, marking a 26% increase from $547.5 million in Q3 2023. For the nine-month period, revenue reached $1,946.5 million, a 27% rise from $1,538.7 million in the same period last year. This growth was primarily driven by existing customers, contributing approximately 75% of the revenue increase, while new customers accounted for the remaining 25%.

Gross profit for Q3 2024 was $552.3 million, up from $444.2 million in Q3 2023, with a gross margin slightly decreasing due to increased costs associated with third-party cloud infrastructure. Operating income turned positive at $20.3 million for Q3 2024, compared to an operating loss of $4.2 million in Q3 2023. Net income for the quarter was $51.7 million, a substantial increase from $22.6 million in the prior year.

For the nine months ended September 30, 2024, Datadog reported net income of $138.2 million, a significant turnaround from a net loss of $5.4 million in the same period of 2023. The company’s operating cash flow also improved, totaling $605.4 million, compared to $439.7 million in the previous year.

Datadog's total assets increased to $4.6 billion as of September 30, 2024, up from $3.9 billion at the end of 2023. Cash and cash equivalents stood at $337.4 million, while marketable securities rose to $2.9 billion, reflecting a strong liquidity position. The company’s total stockholders’ equity increased to $2.6 billion, up from $2.0 billion at the end of 2023.

The company continues to invest in its growth, with research and development expenses rising to $127.2 million for the nine months ended September 30, 2024, an 18% increase from the previous year. Sales and marketing expenses also grew by 22% to $548.7 million, driven by increased personnel costs and marketing activities.

Datadog's customer base expanded to approximately 29,200 as of September 30, 2024, up from 26,800 a year earlier. The company reported that 83% of its customers were using more than one product, indicating strong product adoption. However, the dollar-based net retention rate declined slightly, attributed to slower usage growth amid an uncertain macroeconomic environment.

The company plans to continue significant investments in geographic expansion, particularly in EMEA and APAC, despite potential short-term impacts on operating results.