Datadog, Inc.

Previous wording

Datadog is the observability and security platform for cloud applications.

Current wording

Datadog is the AI-powered observability and security platform for cloud applications.

Previous wording

Our SaaS platform integrates and automates infrastructure monitoring, application performance monitoring, log management, user experience monitoring, cloud security, and many other capabilities to provide unified, real-time observability and security for our customers’ entire technology stack. Datadog is used by organizations of all sizes and across a wide range of industries to enable digital transformation and cloud migration, drive collaboration among development, operations, security and business teams, accelerate time to market for applications, reduce time to problem resolution, secure applications and infrastructure, understand user behavior and track key business metrics.

Current wording

Our SaaS platform integrates and automates infrastructure monitoring, application performance monitoring, log management, user experience monitoring, cloud security, service management, and many other capabilities to provide unified, real-time observability and security for our customers’ entire technology stack. Datadog is used by organizations of all sizes and across a wide range of industries to enable digital transformation and cloud migration, drive collaboration among development, operations, security and business teams, accelerate time to market for applications, reduce time to problem resolution, secure applications and infrastructure, understand user behavior and track key business metrics.

Previous wording

As of September 30, 2025, we had $540.6 million in cash and cash equivalents and $3.6 billion in marketable securities. We generated revenue of $885.7 million and $690.0 million in the three months ended September 30, 2025 and 2024, respectively, representing year-over-year growth of 28%. For the nine months ended September 30, 2025 and 2024, our revenue was $2,474.0 million and $1,946.5 million, respectively, representing year-over-year growth of 27%. Substantially all of our revenue is from subscription software sales. While we have continued to make significant expenditures and investments, including in personnel-related costs, sales and marketing, infrastructure and operations, we generated net income of $33.9 million and $51.7 million for the three months ended September 30, 2025 and 2024, respectively, and $61.2 million and $138.2 million for the nine months ended September 30, 2025 and 2024, respectively. Our operating cash flow was $723.1 million and $605.4 million for the nine months ended September 30, 2025 and 2024, respectively. Our free cash flow was $623.7 million and $534.1 million for the nine months ended September 30, 2025 and 2024, respectively. See the section titled “—Liquidity and Capital Resources—Non-GAAP Free Cash Flow” below.

Current wording

As of March 31, 2026, we had $426.4 million in cash and cash equivalents and $4.3 billion in marketable securities. We generated revenue of $1,006.4 million and $761.6 million in the three months ended March 31, 2026 and 2025, respectively, representing year-over-year growth of 32%. Substantially all of our revenue is from subscription software sales. While we have continued to make significant expenditures and investments, including in personnel-related costs, sales and marketing, infrastructure and operations, we generated net income of $52.6 million and $24.6 million for the three months ended March 31, 2026 and 2025, respectively. Our operating cash flow was $334.6 million and $271.5 million for the three months ended March 31, 2026 and 2025, respectively. Our free cash flow was $289.1 million and $244.4 million for the three months ended March 31, 2026 and 2025, respectively. See the section titled “—Liquidity and Capital Resources—Non-GAAP Free Cash Flow” below.

Previous wording

We believe there is substantial opportunity to continue to grow our customer base. We intend to drive new customer acquisition by continuing to invest significantly in sales and marketing to engage our prospective customers, increase brand awareness and drive adoption of our platform and products. We also plan to continue to invest in building brand awareness within the development and operations communities. As of September 30, 2025, we had approximately 32,000 customers spanning organizations of a broad range of sizes and industries, compared to approximately 29,200 as of September 30, 2024. Our ability to attract new customers will depend on a number of factors, including the effectiveness and pricing of our products, offerings of our competitors and the effectiveness of our marketing efforts.

Current wording

We believe there is substantial opportunity to continue to grow our customer base. We intend to drive new customer acquisition by continuing to invest significantly in sales and marketing to engage our prospective customers, increase brand awareness and drive adoption of our platform and products. We also plan to continue to invest in building brand awareness within the development and operations communities. As of March 31, 2026, we had approximately 33,200 customers spanning organizations of a broad range of sizes and industries, compared to approximately 30,500 as of March 31, 2025. Our ability to attract new customers will depend on a number of factors, including the effectiveness and pricing of our products, offerings of our competitors and the effectiveness of our marketing efforts.

Previous wording

Our base of customers represents a significant opportunity for further sales expansion. As of September 30, 2025, we had approximately 4,060 customers with annual run-rate revenue, or ARR, of $100,000 or more, representing 89% of our ARR, up from 3,490 customers as of September 30, 2024, representing 88% of our ARR. We monitor our number of customers with ARR of $100,000 or more, and believe it is useful to investors, as an indicator of our ability to grow the number of customers that are exceeding this ARR threshold. We define ARR as the annual run-rate revenue of subscription agreements from all customers at a point in time. We calculate ARR by taking the monthly run-rate revenue, or MRR, and multiplying it by 12. MRR for each month is calculated by aggregating, for all customers during that month, monthly revenue from committed contractual amounts, additional usage, usage from subscriptions for a committed contractual amount of usage that is delivered as used and monthly subscriptions. ARR and MRR should be viewed independently of revenue, and do not represent our revenue under GAAP on a monthly or annualized basis, as they are operating metrics that can be impacted by contract start and end dates and renewal rates. ARR and MRR are not intended to be replacements or forecasts of revenue.

Current wording

Our base of customers represents a significant opportunity for further sales expansion. As of March 31, 2026, we had approximately 4,550 customers with annual run-rate revenue, or ARR, of $100,000 or more, representing 90% of our ARR, up from 3,770 customers as of March 31, 2025, representing 88% of our ARR. We monitor our number of customers with ARR of $100,000 or more, and believe it is useful to investors, as an indicator of our ability to grow the number of customers that are exceeding this ARR threshold. We define ARR as the annual run-rate revenue of subscription agreements from all customers at a point in time. We calculate ARR by taking the monthly run-rate revenue, or MRR, and multiplying it by 12. MRR for each month is calculated by aggregating, for all customers during that month, monthly revenue from committed contractual amounts, additional usage, usage from subscriptions for a committed contractual amount of usage that is delivered as used and monthly subscriptions. ARR and MRR should be viewed independently of revenue, and do not represent our revenue under GAAP on a monthly or annualized basis, as they are operating metrics that can be impacted by contract start and end dates and renewal rates. ARR and MRR are not intended to be replacements or forecasts of revenue.

Previous wording

A further indication of the propensity of our customer relationships to expand over time is our dollar-based net retention rate, which compares our ARR from the same set of customers in one period, relative to the year-ago period. As of September 30, 2025, our trailing 12-month dollar-based net retention rate was about 120%. As of September 30, 2024, our trailing 12-month dollar-based net retention rate was mid-110%'s. The increase in our trailing 12-month dollar-based net retention rate was attributable to increased usage growth from existing customers. We calculate dollar-based net retention rate as of a period end by starting with the ARR from the cohort of all customers as of 12 months prior to such period-end, or the Prior Period ARR. We then calculate the ARR from these same customers as of the current period-end, or the Current Period ARR. Current Period ARR includes any expansion and is net of contraction or attrition over the last 12 months but excludes ARR from new customers in the current period. We then divide the total Current Period ARR by the total Prior Period ARR to arrive at the point-in-time dollar-based net retention rate. We then calculate the weighted average of the trailing 12-month point-in-time dollar-based net retention rates, to arrive at the trailing 12-month dollar-based net retention rate.

Current wording

A further indication of the propensity of our customer relationships to expand over time is our dollar-based net retention rate, which compares our ARR from the same set of customers in one period, relative to the year-ago period. As of March 31, 2026, our trailing 12-month dollar-based net retention rate was low-120%'s. As of March 31, 2025, our trailing 12-month dollar-based net retention rate was high-110%'s. The increase in our trailing 12-month dollar-based net retention rate was attributable to increased usage growth from existing customers. We calculate dollar-based net retention rate as of a period end by starting with the ARR from the cohort of all customers as of 12 months prior to such period-end, or the Prior Period ARR. We then calculate the ARR from these same customers as of the current period-end, or the Current Period ARR. Current Period ARR includes any expansion and is net of contraction or attrition over the last 12 months but excludes ARR from new customers in the current period. We then divide the total Current Period ARR by the total Prior Period ARR to arrive at the point-in-time dollar-based net retention rate. We then calculate the weighted average of the trailing 12-month point-in-time dollar-based net retention rates, to arrive at the trailing 12-month dollar-based net retention rate.

Previous wording

Our success is dependent on our ability to sustain innovation and technology leadership in order to maintain our competitive advantage. We believe that we have built a highly differentiated platform that will position us to further extend the adoption of our platform and products. Datadog is frequently deployed across a customer’s entire infrastructure, making it ubiquitous. Datadog is a daily part of the lives of developers, operations engineers and business leaders. We employ a land-and-expand business model centered around offering products that are easy to adopt and have a very short time to value. Our efficient go-to-market model enables us to prioritize significant investment in innovation. We have demonstrated the success of our platform approach, through expansion beyond our initial infrastructure monitoring solution to include over 20 products. Approximately 84% of our customers were using two or more products as of September 30, 2025, consistent with approximately 83% a year earlier. Additionally, as of September 30, 2025, approximately 54% of our customers were using four or more products, up from approximately 49% a year earlier, approximately 31% of our customers were using six or more products, up from 26% a year earlier, and approximately 16% of our customers were using eight or more products, up from 12% a year earlier. We believe these metrics indicate strong expansion of product adoption across our platform.

Current wording

Our success is dependent on our ability to sustain innovation and technology leadership in order to maintain our competitive advantage. We believe that we have built a highly differentiated platform that will position us to further extend the adoption of our platform and products. Datadog is frequently deployed across a customer’s entire infrastructure, making it ubiquitous. Datadog is a daily part of the lives of developers, operations engineers and business leaders. We employ a land-and-expand business model centered around offering products that are easy to adopt and have a very short time to value. Our efficient go-to-market model enables us to prioritize significant investment in innovation. We have demonstrated the success of our platform approach, through expansion beyond our initial infrastructure monitoring solution to include over 20 products. Approximately 85% of our customers were using two or more products as of March 31, 2026, up from approximately 83% a year earlier. Additionally, as of March 31, 2026, approximately 56% of our customers were using four or more products, up from approximately 51% a year earlier, approximately 35% of our customers were using six or more products, up from 28% a year earlier, approximately 20% of our customers were using eight or more products, up from 13% a year earlier; and approximately 11% of our customers were using ten or more products, up from 6% a year earlier. We believe these metrics indicate strong expansion of product adoption across our platform.

Previous wording

We believe there is a significant opportunity to expand usage of our platform outside of North America. Revenue, as determined based on the billing address of our customers, from regions outside of North America was approximately 29% and 30% of our total revenue for the nine months ended September 30, 2025 and 2024, respectively. In addition, we have made and plan to continue to make significant investments to expand geographically, particularly in EMEA and APAC. Although these investments may adversely affect our operating results in the near term, we believe that they will contribute to our long-term growth. Beyond North America, we now have sales presence internationally, primarily in Amsterdam, Dublin, London, Paris, Seoul, Singapore, Sydney, and Tokyo.

Current wording

We believe there is a significant opportunity to expand usage of our platform outside of North America. Revenue, as determined based on the billing address of our customers, from regions outside of North America was approximately 28% and 30% of our total revenue for the three months ended March 31, 2026 and 2025, respectively. In addition, we have made and plan to continue to make significant investments to expand geographically, particularly in EMEA and APAC. Although these investments may adversely affect our operating results in the near term, we believe that they will contribute to our long-term growth. Beyond North America, we now have sales presence internationally, primarily in Amsterdam, Dublin, London, Paris, Seoul, Singapore, Sydney, and Tokyo.

Previous wording

We generate revenue from the sale of subscriptions to customers using our cloud-based platform. The terms of our subscription agreements are primarily monthly, annual or multi-year, with the majority of our revenue coming from annual subscriptions. Our customers can enter into a subscription for a committed contractual amount of usage that is apportioned ratably on a monthly basis over the term of the subscription period, a subscription for a committed contractual amount of usage that is delivered as used, or a monthly subscription based on usage. To the extent that our customers’ usage exceeds the committed contracted amounts under their subscriptions, either on a monthly basis in the case of a ratable subscription or once the entire commitment is used in the case of a delivered-as-used subscription, they are charged for their incremental usage.

Current wording

We generate revenue from the sale of subscriptions to customers using our cloud-based platform. The terms of our subscription agreements are primarily monthly, annual or multi-year, with the majority of our revenue coming from annual subscriptions. Our customers can enter into a subscription for a committed contractual amount of usage that is apportioned ratably on a monthly basis over the term of the subscription period, a subscription for a committed contractual amount of usage that is delivered as used, or a monthly subscription based on usage. To the extent that our customers’ usage exceeds the committed contracted amounts under their subscriptions, either on a monthly basis in the case of a ratable subscription or once the entire commitment is used in the case of a delivered-as-used subscription, they are charged for their incremental usage. Usage is measured on a per-unit basis, with the unit of measure differing for each product, based on the unit that, in working with customers and design partners, best indicates the value we deliver.

Previous wording

Other income, net consists of interest income, primarily due to income earned on money market funds included in cash and cash equivalents and on marketable securities, partially offset by interest expense due on the Notes and amortization of premiums on our marketable securities.

Current wording

Other income, (loss), net consists of interest income, primarily due to income earned on money market funds included in cash and cash equivalents and on marketable securities, partially offset by interest expense on the Notes and amortization of premiums on our marketable securities.

Previous wording

Revenue increased by $195.6 million, or 28%, for thethree months ended September 30, 2025 compared to thethree months ended September 30, 2024. Approximately 75% of the increase in revenue was attributable to growth from existing customers, and the remaining 25% was attributable to growth from new customers.

Current wording

Revenue increased by $244.9 million, or 32%, for thethree months ended March 31, 2026 compared to thethree months ended March 31, 2025. Approximately 75% of the increase in revenue was attributable to growth from existing customers, and the remaining 25% was attributable to growth from new customers.

Previous wording

Cost of revenue increased by $38.7 million, or 28%, for thethree months ended September 30, 2025 compared to the three months ended September 30, 2024. This increase was primarily due to an increase of $31.6 million in third-party cloud infrastructure hosting and software costs and an increase of $5.6 million in personnel costs including allocated overhead costs as a result of increased headcount.

Current wording

Cost of revenue increased by $51.6 million, or 33%, for thethree months ended March 31, 2026 compared to the three months ended March 31, 2025. This increase was primarily due to an increase of $41.8 million in third-party cloud infrastructure hosting and software costs and an increase of $4.3 million in personnel costs including allocated overhead costs as a result of increased headcount.

Previous wording

Research and development expense increased by $110.2 million, or 38%, for thethree months ended September 30, 2025 compared to the three months ended September 30, 2024. This increase was primarily due to an increase of $95.1 million in personnel costs including allocated overhead costs for our engineering, product and design teams as a result of increased headcount and an increase of $11.4 million in cloud infrastructure-related investments.

Current wording

Research and development expense increased by $94.2 million, or 28%, for thethree months ended March 31, 2026 compared to the three months ended March 31, 2025. This increase was primarily due to an increase of $70.3 million in personnel costs including allocated overhead costs for our engineering, product and design teams as a result of increased headcount and an increase of $13.4 million in cloud infrastructure-related investments.

Previous wording

Sales and marketing expense increased by $51.0 million, or 27%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. This increase was primarily due to an increase of $43.2 million in personnel costs including allocated overhead costs for our sales and marketing organization as a result of increased headcount and increased variable compensation for our sales personnel and an increase of $4.3 million in advertising, sales, marketing and promotional activities.

Current wording

Sales and marketing expense increased by $65.5 million, or 31%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. This increase was primarily due to an increase of $53.7 million in personnel costs including allocated overhead costs for our sales and marketing organization as a result of increased headcount and increased variable compensation for our sales personnel and an increase of $8.4 million in advertising, sales, marketing and promotional activities.

Previous wording

Other income, net increased by $22.1 million, or 21%, in the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. This increase was primarily driven by an increase of $34.3 million in interest income, mainly due to income earned from investments in marketable securities. This amount was partially offset by a decrease of $8.2 million in other income mainly due to fluctuations related to foreign currency exchange rates.

Current wording

Other income, net increased by $7.4 million, or 17%, for thethree months ended March 31, 2026 compared to the three months ended March 31, 2025. This increase was primarily driven by an increase of $9.0 million due to fluctuations related to foreign currency exchange rates, partially offset by a $1.5 million decrease in interest income, mainly due to income earned from investments in marketable securities.

Previous wording

Our largest source of operating cash is cash collection from sales of subscriptions to our customers. Our primary uses of cash from operating activities are for personnel expenses, hosting expenses, facility expenses, and marketing expenses. We generated positive cash flows from operations during the nine months ended September 30, 2025 and 2024. When assessing sources of liquidity, we also include cash and cash equivalents of $540.6 million and marketable securities of $3.6 billion as of September 30, 2025. We believe that our existing cash and cash equivalents, marketable securities and cash flow from operations will be sufficient to support our cash requirements for the next 12 months and beyond.

Current wording

Our largest source of operating cash is cash collection from sales of subscriptions to our customers. Our primary uses of cash from operating activities are for personnel expenses, hosting expenses, facility expenses, and marketing expenses. We generated positive cash flows from operations during the three months ended March 31, 2026 and 2025. When assessing sources of liquidity, we also include cash and cash equivalents of $426.4 million and marketable securities of $4.3 billion as of March 31, 2026. We believe that our existing cash and cash equivalents, marketable securities and cash flow from operations will be sufficient to support our cash requirements for the next 12 months and beyond.

Previous wording

We have also issued long-term debt to finance our business. In June 2020 and December 2024, we issued $747.5 million aggregate principal amount of the 2025 Notes and $1.0 billion aggregate principal amount of the 2029 Notes, respectively, in private placements to qual ified institutional buyers pursuant to Rule 144A under the Securities Act. The total net proceeds from the sale of the 2025 Notes and the 2029 Notes, after deducting the initial purchasers’ discounts and debt issuance costs, were approximately $730.2 million and $979.1 million, respectively. We used $196.8 million of the net proceeds from the offering of the 2029 Notes to repurchase approximately $112.0 million in aggregate principal amount of the 2025 Notes, including accrued and unpaid interest, in privately negotiated transactions. In connection with the partial retirement of the 2025 Notes, we entered into a termination agreement relating to a number of options corresponding to the number of 2025 Notes retired. We received approximately $54.7 million in connection with such termination agreements. In addition, we may from time to time seek to retire or purchase the 2029 Notes, through cash purchases and/or exchanges for equity securities, in open market purchases, privately negotiated transactions or otherwise.

Current wording

We have also issued long-term debt to finance our business. In December 2024, we issued$1.0 billion aggregate principal amount of the 2029 Notes in a private placement to qual ified institutional buyers pursuant to Rule 144A under the Securities Act. The total net proceeds from the sale of the 2029 Notes, after deducting the initial purchasers’ discounts and debt issuance costs, were approximately $979.1 million. The principal and future interest payments related to our 2029 Notes are $1.0 billion. We may from time to time seek to retire or purchase the 2029 Notes, through cash purchases and/or exchanges for equity securities, in open market purchases, privately negotiated transactions or otherwise.

Previous wording

Net cash provided by operating activities for the nine months ended September 30, 2025 increased by $117.7 million compared to the nine months ended September 30, 2024, primarily driven by anincrease in non-cash charges of $162.9 million, an increase in accrued expenses and other liabilities of $38.1 million, and an increase in accounts receivable of $27.0 million. The increase in non-cash charges related primarily to an increase of $133.4 million in stock-based compensation as we continued to increase headcount to support the growth of the business. The increase in cash provided by operating activities was partially offset by a decrease in net income of $77.0 million and a decrease in deferred contract costs of $27.2 million.

Current wording

Net cash provided by operating activities for the three months ended March 31, 2026 increased by $63.1 million compared to the three months ended March 31, 2025, primarily driven by anincrease in non-cash charges of $44.8 million, an increase in deferred revenue of$33.5 million, and an increase in accounts payable of $32.2 million. The increase in non-cash charges related primarily to an increase of $32.6 million in stock-based compensation as we continued to increase headcount to support the growth of the business. The increase in cash provided by operating activities was partially offset by a decrease in accounts receivable of $48.4 million and an increase in deferred contract costs of $14.0 million.

Previous wording

Net cash used in investing activities for the nine months ended September 30, 2025 increased by $209.2 million compared to the nine months ended September 30, 2024, primarily driven by an increase of $371.4 million in the purchases of marketable securities and an increase of $116.6 million in cash paid for the acquisition of businesses net of cash acquired. The increase in cash used in investing activities was partially offset by an increase of $293.9 million in proceeds from maturities of marketable securities.

Current wording

Net cash used in investing activities for the three months ended March 31, 2026 decreased by $128.6 million compared to the three months ended March 31, 2025, primarily driven by an increase in proceeds from maturities of marketable securities of $490.5 million. This decrease in cash used in investing activities was partially offset by an increase in purchases of marketable securities of $334.7 million and an increase in capitalized software development costs of $15.8 million.

Previous wording

Net cash (used in) provided by financing activities for the nine months ended September 30, 2025 decreased $630.2 million compared to the nine months ended September 30, 2024, primarily due to the repayment of the 2025 Notes for $635.5 million.

Current wording

Net cash (used in) provided by financing activities for the three months ended March 31, 2026 increased $8.1 million compared to the three months ended March 31, 2025, primarily due to proceeds from the exercise of stock options of $8.0 million.

Previous wording

We report our financial results in accordance with GAAP. To supplement our condensed consolidated financial statements, we provide investors with the amount of free cash flow, which is a non-GAAP financial measure. Free cash flow represents net cash provided by operating activities, reduced by capital expenditures and capitalized software development costs, if any. Free cash flow is a measure used by management to understand and evaluate the strength of our liquidity and future ability to generate cash that can be used for strategic opportunities or investing in our business. The reduction of capital expenditures and amounts capitalized for software development facilitates comparisons of our liquidity on a period-to-period basis and excludes items that we do not consider to be indicative of our liquidity. Nevertheless, our use of free cash flow has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our financial results as reported under GAAP. Further, our definition of free cash flow may differ from the definitions used by other companies and therefore comparability may be limited. You should consider free cash flow alongside our other GAAP-based financial performance measures, such as net cash used in operating activities, and our other GAAP financial results.

Current wording

We report our financial results in accordance with U.S. GAAP. To supplement our condensed consolidated financial statements, we provide investors with the amount of free cash flow, which is a non-GAAP financial measure. Free cash flow represents net cash provided by operating activities, reduced by capital expenditures and capitalized software development costs, if any. Free cash flow is a measure used by management to understand and evaluate the strength of our liquidity and future ability to generate cash that can be used for strategic opportunities or investing in our business. The reduction of capital expenditures and amounts capitalized for software development facilitates comparisons of our liquidity on a period-to-period basis and excludes items that we do not consider to be indicative of our liquidity. Nevertheless, our use of free cash flow has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our financial results as reported under GAAP. Further, our definition of free cash flow may differ from the definitions used by other companies and therefore comparability may be limited. You should consider free cash flow alongside our other GAAP-based financial performance measures, such as net cash used in operating activities, and our other GAAP financial results.

Previous wording

There have been no material changes to our critical accounting policies from those disclosed in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the Annual Report, except as noted below.

Current wording

There have been no material changes to our critical accounting policies from those disclosed in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the Annual Report.