--- title: "Datadog: As Reliable as Your Golden Retriever" description: "Datadog's platform transition drives remarkable consistency: 25% YoY growth for 12 straight quarters, 120% net dollar retention recovery, 84% multi-product adoption, \u0026 15 AI native customers \u003e$1M ARR as security suite accelerates to mid-50s% growth." categories: ["AI","observability","cloud"] keywords: ["Datadog earnings","observability platform","net dollar retention","platform adoption","multi-product strategy","AI monitoring","LLM observability","Bits AI","Cloud SIEM","cloud security","APM","SaaS growth consistency","AI native customers"] ai_summary: "Datadog's Q3 2025 earnings demonstrate successful platform transition with 25% YoY growth consistency across 12 quarters, net dollar retention recovery to 120%, 84% multi-product adoption, 15 AI native customers \u003e$1M ARR, \u0026 security suite accelerating to mid-50s% growth." date: 2025-11-10 lastmod: 2026-07-20 canonical_url: https://www.tomtunguz.com/datadog-q3-2025-earnings/ author: "Tomasz Tunguz" --- Datadog is becoming a platform company, & its Q3 2025 results underscore how successful this transition is. If nothing else, the consistency around 25% growth for the last 12 quarters exemplifies this point. {{< email_image src="vrmz5rdmg267lll7zx7d" alt="Datadog revenue growth chart showing quarterly revenue & year-over-year growth rate" width="540" height="304" >}} Net dollar retention underpins this growth, combined with accelerating new customer account acquisition. One of the biggest changes in the last five quarters is terrific cross-selling across an increasingly large product suite. {{< email_image src="esjziusfu2ztdx93exvz" alt="Datadog net dollar retention recovery from 2023 trough to 120% in Q3 2025" width="540" height="304" >}} # Platform Adoption Deepening > At the end of Q3, 84% of customers were using 2 or more products, up from 83% a year ago. 54% of customers were using 4 or more products, up from 49% a year ago. 31% of our customers were using 6 or more products, up from 26% a year ago & 16% of our customers were using 8 or products, up from 12% a year ago. Datadog's platform spans six product categories: - **Digital Experience Monitoring**: RUM/Real User Monitoring, Synthetics, Product Analytics - **Security**: Cloud SIEM, Cloud Security - **Infrastructure Observability**: APM, Log Management, Flex Logs - **Incident Response**: Incident Management, On-Call - **AI Capabilities**: Bits AI, LLM Observability - **Cost Management**: Cloud Cost Management The steady increase in multi-product adoption demonstrates customers consolidating their observability stack onto Datadog, with the highest-tier customers (8+ products) growing 33% year-over-year as a percentage of the base. # New Customer Momentum > New logo annualized bookings more than doubled year-over-year & set a new record driven by an increase in average new logo land size, particularly in enterprise. > The portion of our year-over-year revenue growth that related to new customers was about 25% in Q3, up from 20% in Q2. New customer acquisition is also accelerating. This is in concert with a move-up market into the enterprise. # AI Native Customer Expansion > We also experienced strong revenue growth for our AI native customers & a broadening contribution to growth among those customers. There, too, we saw an acceleration of growth in our AI cohort in Q3 when excluding our largest customer. > This group represented 12% of our revenue, up from 11% last quarter & about 6% in the year ago quarter. The AI native cohort is both growing & maturing. Datadog now has 15 AI native customers spending more than $1 million annually, up from essentially zero a year ago, with over 100 spending more than $100,000. # Revenue Growth > Revenue was $886 million, an increase of 28% year-over-year & above the high end of our guidance range. The combination of these three factors : a broader product suite that is effectively cross-sold, accelerating new customer momentum, & a very fast-growing AI business, has led to outperformance. # Security Suite Accelerating > Security ARR growth was in the mid-50s as a percentage year-over-year in Q3, up from the mid-40s we mentioned last quarter. > We're starting to see success in including Cloud SIEM in larger deals, & we'll get back to that in a bit in our customer examples. And we're seeing positive trends beyond Cloud SIEM, including fast uptake of good security & an increasing number of wins in cloud security. Security is becoming a meaningful growth driver for Datadog, accelerating from mid-40s to mid-50s percentage growth & expanding beyond Cloud SIEM into broader cloud security use cases. # Enterprise Deal Momentum > First, we landed a 7-figure annualized deal with a leading European telco, our largest ever land deal in Europe. [...] They will adopt 11 Datadog products to start. > Next, we landed a 7-figure annualized deal with a Fortune 500 technology hardware company. Both of these data points confirm a significant move-up market. A million-dollar land deal with 11 products confirms that Datadog is truly selling a suite. # Datadog's AI Products In addition to the existing suite, Datadog is pushing heavily into AI with a broader range of AI deployment products. - **[Bits AI SRE Agent](https://www.datadoghq.com/product/platform/bits-ai/)** (Available in preview, [announced June 2025](https://www.datadoghq.com/blog/bits-ai-sre/)) is an autonomous AI agent that investigates alerts & coordinates incident response 24/7, saving customers significant time on mean-time-to-resolution. - **[LLM Experiments & Playgrounds](https://www.datadoghq.com/product/llm-observability/)** ([Generally available, launched 2025](https://www.datadoghq.com/blog/llm-experiments/)) helps teams rapidly iterate on LLM applications by testing prompt changes, model swaps, & application changes against production traces. - **[Custom LLM-as-a-Judge Evaluations](https://www.datadoghq.com/product/llm-observability/)** (Generally available) lets customers write natural language evaluation prompts to assess LLM application quality & safety across traces & spans. - **[Datadog MCP Server](https://docs.datadoghq.com/bits_ai/mcp_server/)** (Available in preview, [announced 2025](https://www.datadoghq.com/blog/datadog-remote-mcp-server/)) bridges Datadog with AI agents like Codex, Claude, Cursor, & GitHub Copilot, providing structured access to metrics, logs, traces, & incidents directly from AI coding environments. - **[TOTO](https://huggingface.co/Datadog/Toto-Open-Base-1.0)**, Datadog's open-source time series forecasting model ([launched 2025](https://www.datadoghq.com/blog/datadog-time-series-foundation-model/)), was trained on 2 trillion data points & became one of Hugging Face's top downloads across all categories. If SaaS companies were dog breeds, many would be temperamental. But Datadog demonstrates continued consistency across a broad range of different businesses.