Stock Analysis on Net
Stock Analysis on Net

Datadog Inc. (NASDAQ:DDOG)

Common-Size Income Statement 

Datadog Inc., common-size consolidated income statement

Microsoft Excel
12 months ended: Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Revenue 100.00 100.00 100.00 100.00 100.00
Cost of revenue -19.21 -19.26 -20.70 -22.77 -21.57
Gross profit 80.79% 80.74% 79.30% 77.23% 78.43%
Research and development -42.94 -45.22 -44.91 -40.80 -34.90
Sales and marketing -28.19 -28.63 -29.57 -29.11 -35.41
General and administrative -7.64 -8.47 -8.32 -9.18 -10.40
Operating expenses -78.77% -82.31% -82.80% -79.09% -80.71%
Operating income (loss) 2.02% -1.57% -3.50% -1.86% -2.28%
Interest expense -0.26 -0.30 -0.99 -2.05 -5.04
Interest income 5.79 4.86 2.09 2.08 3.52
Other income (loss), net 0.05 -0.16 0.13 0.04 0.12
Interest income and other income, net 5.84% 4.70% 2.22% 2.12% 3.64%
Other income (loss), net 5.58% 4.40% 1.23% 0.07% -1.40%
Income (loss) before provision for income taxes 7.60% 2.83% -2.27% -1.79% -3.68%
Provision for income taxes -0.75 -0.55 -0.72 -0.23 -0.39
Net income (loss) 6.85% 2.28% -2.99% -2.02% -4.07%

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

Revenue Composition and Gross Profit
The revenue remained constant at 100% throughout the periods. The cost of revenue showed a declining trend from -21.57% in 2020 to -19.21% in 2024, leading to an increase in gross profit from 78.43% to 80.79%. This improvement indicates enhanced efficiency or cost management in generating revenue.
Operating Expenses
Research and development expenses as a percentage of revenue increased steadily from -34.9% in 2020 to a peak of -45.22% in 2023, followed by a slight reduction to -42.94% in 2024. This suggests a significant and sustained investment in innovation or product development over the years.
Sales and marketing expenses decreased from -35.41% in 2020 to -28.19% in 2024, indicating greater cost control or possibly improved marketing efficiency. Similarly, general and administrative expenses declined from -10.4% to -7.64%, reflecting tighter overhead management.
Overall operating expenses fluctuated but showed a downward adjustment from -80.71% in 2020 to -78.77% in 2024. This decline, despite increased R&D spending, was primarily driven by reductions in sales, marketing, and administrative costs.
Operating Income
Operating income remained negative in the initial years, reaching a low of -3.5% in 2022, but improved thereafter to 2.02% by 2024. This upturn reflects enhanced profitability at the operating level driven by improved gross margin and controlled operating expenses.
Interest and Other Income/Expense
Interest expense as a percentage of revenue steadily decreased from -5.04% in 2020 to -0.26% in 2024, indicating reduced debt levels or more favorable financing terms. Concurrently, interest income increased significantly from 3.52% to 5.79%, enhancing net financial income.
Other income showed variability but an overall positive rising trend from -1.4% in 2020 to 5.58% in 2024. Combined interest and other income improved total non-operating gains, contributing positively to pre-tax income.
Income Before Taxes and Net Income
Income before provision for income taxes switched from negative values (-3.68% in 2020) to positive and increasing profitability, reaching 7.6% by 2024. This transition reflects stronger core operations and favorable non-operating financial results.
Provision for income taxes remained relatively low and stable, under 1% throughout the periods, indicating consistent tax planning or effective tax rates.
Net income followed the improvement pattern of operating and pre-tax income, moving from a loss position (-4.07% in 2020) to a strong positive performance at 6.85% in 2024. This recovery marks a substantial shift to profitability over the analyzed period.