Datadog : 1Q26 Financial Supplemental

Published: 2026-05-07 07:35:08 ET DDOG

Published on 05/07/2026 at 07:35 am EDT

‌The unaudited condensed consolidated financial statements within this document include the accounts of Datadog, Inc. and its wholly-owned subsidiaries ("Datadog" or the "Company"), and have been prepared in accordance with generally accepted accounting principles in the United States ("GAAP").

The Company also discloses the following non-GAAP financial measures within this document: non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses (research and development, sales and marketing and general and administrative), non-GAAP operating income (loss), non-GAAP operating margin, non-GAAP net income (loss), non-GAAP net income (loss) per basic share, non-GAAP net income (loss) per diluted share, free cash flow, and free cash flow margin. Datadog uses each of these non-GAAP financial measures internally to understand and compare operating results across accounting periods, for internal budgeting and forecasting purposes, for short- and long-term operating plans, and to evaluate Datadog's financial performance. Datadog believes they are useful to investors, as a supplement to GAAP measures, in evaluating its operational performance, as further discussed below. Datadog's non-GAAP financial measures may not provide information that is directly comparable to that provided by other companies in its industry, as other companies in its industry may calculate non-GAAP financial results differently, particularly related to non-recurring and unusual items. In addition, there are limitations in using non-GAAP financial measures because the non-GAAP financial measures are not prepared in accordance with GAAP and may be different from non-GAAP financial measures used by other companies and exclude expenses that may have a material impact on Datadog's reported financial results.

Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. A reconciliation of the historical non-GAAP financial measures to their most directly comparable GAAP measures has been provided in the financial statement tables included below in this press release.

Datadog defines non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses (research and development, sales and marketing and general and administrative), non-GAAP operating income (loss), non-GAAP operating margin and non-GAAP net income (loss) as the respective GAAP balances, adjusted for, as applicable: (1) stock-based compensation expense; (2) the amortization of acquired intangibles; (3) employer payroll taxes on employee stock transactions; (4) M&A transaction costs; (5) amortization of issuance costs; and (6) an assumed provision for income taxes based on our long-term projected tax rate. Non-GAAP financial measures prior to April 1, 2025 have not been adjusted for M&A transaction costs, as such costs were not material to our results of operations in such prior periods. Our estimated long-term projected tax rate is subject to change for a variety of reasons, including the rapidly evolving global tax environment, significant changes in Datadog's geographic earnings mix, or other changes to our strategy or business operations. We will re-evaluate our long-term projected tax rate as appropriate.

Datadog defines free cash flow as net cash provided by operating activities, minus capital expenditures and minus capitalized software development costs, if any. Investors are encouraged to review the reconciliation of these historical non-GAAP financial measures to their most directly comparable GAAP financial measures.

Management believes these non-GAAP financial measures are useful to investors and others in assessing Datadog's operating performance due to the following factors:

Stock-based compensation. Datadog utilizes stock-based compensation to attract and retain employees. It is principally aimed at aligning their interests with those of its stockholders and at long-term retention, rather than to address operational performance for any particular period. As a result, stock-based compensation expenses vary for reasons that are generally unrelated to financial and operational performance in any particular period.

Amortization of acquired intangibles. Datadog views amortization of acquired intangible assets as items arising from pre-acquisition activities determined at the time of an acquisition. While these intangible assets are evaluated for impairment regularly, amortization of the cost of acquired intangibles is an expense that is not typically affected by operations during any particular period.

Employer payroll taxes on employee stock transactions. Datadog excludes employer payroll tax expense on equity incentive plans as these expenses are tied to the exercise or vesting of underlying equity awards and the price of Datadog's common stock at the time of vesting or exercise. As a result, these taxes may vary in any particular period independent of the financial and operating performance of Datadog's business.

M&A transaction costs. Datadog views acquisition-related expenses, such as transaction costs, as costs that are not necessarily reflective of operational performance during a period. In particular, Datadog believes the consideration of measures that exclude such expenses can assist in the comparison of operational performance in different periods which may or may not include such expenses.

Amortization of issuance costs. In June 2020 and December 2024, Datadog issued $747.5 million of 0.125% convertible senior notes due 2025 and $1.0 billion of 0.00% convertible senior notes due 2029, respectively. Debt issuance costs, which reduce the carrying value of the convertible debt instrument, are amortized as interest expense over the term. The expense for the amortization of debt issuance costs is a non-cash item, and we believe the exclusion of this interest expense will provide for a more useful comparison of our operational performance in different periods.

Additionally, Datadog's management believes that the non-GAAP financial measure free cash flow is meaningful to investors because it is a measure of liquidity that provides useful information in understanding and evaluating the strength of our liquidity and future ability to generate cash that can be used for strategic opportunities or investing in our business. Free cash flow represents net cash provided by operating activities, reduced by capital expenditures and capitalized software development costs, if any. The reduction of capital expenditures and amounts capitalized for software development facilitates comparisons of Datadog's liquidity on a period-to-period basis and excludes items that management does not consider to be indicative of our liquidity.

Operating Metrics

Datadog's number of customers with ARR of $100,000 or more is based on the ARR of each customer, as of the last month of the quarter.

We define the number of customers as the number of accounts with a unique account identifier for which we have an active subscription in the period indicated. Users of our free trials or tier are not included in our customer count. A single organization with multiple divisions, segments or subsidiaries is generally counted as a single customer. However, in some cases where they have separate billing terms, we may count separate divisions, segments or subsidiaries as multiple customers.

We define ARR as the annualized revenue run-rate of subscription agreements from all customers at a point in time. We calculate ARR by taking the monthly recurring 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.

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. 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.

(In thousands, except per share data; unaudited)

‌Q2 2024

Q3 2024

Q4 2024

Q1 2025

Q2 2025

Q3 2025

Q4 2025

Q1 2026

Revenue $ 645,279 $ 690,016

$ 737,727

$ 761,553 $ 826,760 $ 885,651 $ 953,194 $ 1,006,426

Cost of revenue (1)(2)(3) 123,499 137,756

144,178

157,628 165,978 176,457 186,894 209,228

Gross profit 521,780 552,260

593,549

603,925 660,782 709,194 766,300 797,198

Operating expenses:

Research and development (1)(3) 274,599 291,802

316,314

341,061 387,482 401,982 417,926 435,298

Sales and marketing (1)(2)(3) 187,005 187,772

207,947

214,291 239,026 238,729 264,377 279,823

General and administrative (1)(3)(4) 47,558 52,408

59,896

60,993 69,774 74,292 74,641 74,750

Total operating expenses 509,162 531,982

584,157

616,345 696,282 715,003 756,944 789,871

Operating income (loss) 12,618 20,278

9,392

(12,420) (35,500) (5,809) 9,356 7,327

Other income (loss):

Interest expense (5) (1,477) (1,574)

(2,643)

(2,963) (3,075) (2,421) (2,600) (3,119)

Interest income and other

income, net 36,652 37,432

47,077

47,179 44,663 43,897 46,714 54,722

Other income, net 35,175 35,858

44,434

44,216 41,588 41,476 44,114 51,603

Income before provision for income

taxes 47,793 56,136

53,826

31,796 6,088 35,667 53,470 58,930

Provision for income taxes 3,969 4,439

8,232

7,154 3,441 1,782 6,903 6,356

Net income $ 43,824 $ 51,697

$ 45,594

$ 24,642 $ 2,647 $ 33,885 $ 46,567 $ 52,574

Net income per share - basic $ 0.13 $ 0.15

$ 0.13

$ 0.07 $ 0.01 $ 0.10 $ 0.13 $ 0.15

Net income per share - diluted $ 0.12 $ 0.14

$ 0.13

$ 0.07 $ 0.01 $ 0.10 $ 0.13 $ 0.15

Weighted average shares used in calculating net income per share:

Basic 334,941 337,562

340,320

343,097 346,185 348,645 350,892 353,272

Diluted 356,740 357,635

360,940

363,078 358,725 362,001 365,516 364,731

(1) Includes stock-based compensation expense as follows:

Cost of revenue $ 6,393 $ 6,249

$ 8,052

$ 6,651 $ 6,783 $ 8,038 $ 8,257 $ 8,558

Research and development 87,105 90,507

97,276

105,735 112,445 124,288 127,058 123,671

Sales and marketing 29,201 30,749

33,598

34,125 37,442 41,463 43,442 42,298

General and administrative 11,953 14,685

19,535

17,754 23,792 26,769 26,629 22,314

Total $ 134,652 $ 142,190

$ 158,461

$ 164,265 $ 180,462 $ 200,558 $ 205,386 $ 196,841

(2) Includes amortization of acquired intangibles as follows:

Cost of revenue $ 1,281 $ 1,230

$ 1,104

$ 894 $ 1,518 $ 1,451 $ 1,565 $ 1,282

Sales and marketing 205 208

207

203 188 277 277 358

Total $ 1,486 $ 1,438

$ 1,311

$ 1,097 $ 1,706 $ 1,728 $ 1,842 $ 1,640

(3) Includes employer payroll taxes on employee stock transactions

as follows:

Cost of revenue $ 68 $ 118

$ 68

$ 186 $ 165 $ 169 $ 175 $ 188

Research and development 6,589 6,316

7,410

9,582 11,819 8,177 10,605 11,276

Sales and marketing 608 1,060

873

1,570 1,359 1,480 1,514 1,895

General and administrative 1,521 1,621

1,653

2,225 2,724 1,061 989 3,635

Total $ 8,786 $ 9,115

$ 10,004

$ 13,563 $ 16,067 $ 10,887 $ 13,283 $ 16,994

(4) Includes M&A transaction costs as follows:

General and administrative $ - $ -

$ -

$ - $ 1,373 $ - $ 201 $ 695

Total $ - $ -

$ -

$ - $ 1,373 $ - $ 201 $ 695

(5) Includes amortization of issuance costs as follows:

Interest expense $ 910 $ 912 $ 1,089 $ 1,819 $ 1,691 $ 1,046 $ 1,046 $ 1,047

Total $ 910 $ 912 $ 1,089 $ 1,819 $ 1,691 $ 1,046 $ 1,046 $ 1,047

(In thousands, except per share data; unaudited)

‌Q2 2024

Q3 2024

Q4 2024

Q1 2025

Q2 2025

Q3 2025

Q4 2025

Q1 2026

Revenue

$ 645,279

$ 690,016

$ 737,727

$ 761,553

$ 826,760

$ 885,651

$ 953,194

$ 1,006,426

Cost of revenue

115,757

130,159

134,954

149,897

157,512

166,799

176,897

199,200

Gross profit

529,522

559,857

602,773

611,656

669,248

718,852

776,297

807,226

Operating expenses:

Research and development

180,905

194,979

211,628

225,744

263,218

269,517

280,263

300,351

Sales and marketing

156,991

155,755

173,269

178,393

200,037

195,509

219,144

235,272

General and administrative

34,084

36,102

38,708

41,014

41,885

46,462

46,822

48,106

Total operating expenses

371,980

386,836

423,605

445,151

505,140

511,488

546,229

583,729

Operating income

157,542

173,021

179,168

166,505

164,108

207,364

230,068

223,497

Other income (loss):

Interest expense

(567)

(662)

(1,554)

(1,144)

(1,384)

(1,375)

(1,554)

(2,072)

Interest income and other income, net

36,652

37,432

47,077

47,179

44,663

43,897

46,714

54,722

Other income, net

36,085

36,770

45,523

46,035

43,279

42,522

45,160

52,650

Income before provision for income taxes

193,627

209,791

224,691

212,540

207,387

249,886

275,228

276,147

Provision for income taxes

3,969

4,439

8,232

7,154

3,441

1,782

6,903

6,356

Non-GAAP net income before non-GAAP tax adjustments

189,658

205,352

216,459

205,386

203,946

248,104

268,325

269,791

Income tax effects and adjustments (1)

36,693

39,617

38,953

37,479

40,110

50,694

50,895

51,635

Non-GAAP net income after non-GAAP tax adjustments

$ 152,965

$ 165,735

$ 177,506

$ 167,907

$ 163,836

$ 197,410

$ 217,430

$ 218,156

Non-GAAP net income per share

before non-GAAP tax adjustments -basic

$ 0.57

$ 0.61

$ 0.64

$ 0.60

$ 0.59

$ 0.71

$ 0.76

Non-GAAP net income per share before non-GAAP tax adjustments -diluted

$ 0.53

$ 0.57

$ 0.60

$ 0.57

$ 0.69

$ 0.73

$ 0.74

Non-GAAP net income per share after non-GAAP tax adjustments - basic

$ 0.46

$ 0.49

$ 0.52

$ 0.49

$ 0.47

$ 0.57

$ 0.62

Non-GAAP net income per share after non-GAAP tax adjustments - diluted

$ 0.43

$ 0.46

$ 0.49

$ 0.46

$ 0.55

$ 0.59

$ 0.60

Weighted average shares used in calculating non-GAAP net income per share:

Basic

334,941

337,562

340,320

343,097

346,185

348,645

350,892

353,272

Diluted

356,740

357,635

360,940

363,078

358,725

362,001

365,516

364,731

1) Non-GAAP financial information for the periods shown are adjusted for an assumed provision for income taxes based on our long-term projected tax rate of 21%. Due to the differences in the tax treatment of items excluded from non-GAAP earnings, our estimated tax rate on non-GAAP income may differ from our GAAP tax rate and from our actual tax liabilities.

(In thousands; unaudited)

‌Q2 2024

Q3 2024

Q4 2024

Q1 2025

Q2 2025

Q3 2025

Q4 2025

Q1 2026

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

$ 410,963

$ 337,418

$ 1,246,983

$ 1,079,854

$ 489,030

$ 540,602

$ 401,305

$ 426,360

Marketable securities

2,549,143

2,861,536

2,942,076

3,369,820

3,421,940

3,599,737

4,073,531

4,332,257

Accounts receivable, net

533,292

487,064

598,919

490,172

604,174

549,648

741,262

680,434

Deferred contract costs, current

49,518

52,225

56,095

58,832

62,090

67,201

76,022

81,687

Prepaid expenses and other current assets

49,174

51,191

67,042

77,660

67,442

80,917

90,160

104,468

Total current assets

3,592,090

3,789,434

4,911,115

5,076,338

4,644,676

4,838,105

5,382,280

5,625,206

Property and equipment, net

198,911

215,810

226,970

249,916

283,084

307,609

338,093

378,944

Operating lease assets

166,941

168,610

172,512

203,074

215,626

218,682

214,674

213,260

Goodwill

350,864

352,870

360,381

361,738

530,982

530,043

530,568

540,543

Intangible assets, net

5,804

4,424

3,711

2,626

17,239

16,810

14,968

14,929

Deferred contract costs, non-current

77,040

79,996

86,573

90,501

95,568

105,943

126,708

136,264

Other assets

20,741

20,327

24,077

26,188

35,240

35,278

36,553

42,866

TOTAL ASSETS $ 4,412,391 $ 4,631,471 $ 5,785,339 $ 6,010,381 $ 5,822,415 $ 6,052,470 $ 6,643,844 $ 6,952,012

CURRENT LIABILITIES:

Accounts payable $ 115,991 $ 92,005 $ 107,731 $ 98,442 $ 198,767 $ 135,243 $ 148,791 $ 174,801

Accrued expenses and other current

liabilities 104,791 120,234 127,136 138,238 148,028 175,198 209,595 208,549

Operating lease liabilities, current 24,565 27,342 31,970 34,228 39,955 35,989 39,369 41,401

Convertible senior notes, net,

current 743,970 744,858 634,023 634,780 - - - -

Deferred revenue, current 801,562 795,824 961,853 949,135 966,442 974,264 1,193,646 1,231,152

Total current liabilities 1,790,879 1,780,263 1,862,713 1,854,823 1,353,192 1,320,694 1,591,401 1,655,903

Operating lease liabilities, non-

current

193,835

197,044

196,905

227,974

243,115

260,926

256,187

259,155

Convertible senior notes, net, non-

current - - 979,282 980,314 981,357 982,402 983,449 984,496

Deferred revenue, non-current 14,049 18,404 22,693 21,560 29,866 29,028 68,711 50,918

Total liabilities 2,005,083 2,002,326 3,070,976 3,093,707 2,626,658 2,613,352 2,911,638 2,963,790

Other liabilities 6,320 6,615 9,383 9,036 19,128 20,302 11,890 13,318

Additional paid-in capital 2,484,264 2,632,085 2,689,013 2,860,643 3,130,130 3,335,703 3,579,010 3,801,272

STOCKHOLDERS' EQUITY

Common stock 3 3 3 3 3 3 3 3

Accumulated other comprehensive

190,363

137,789

91,222

57,337

54,690

30,048

(15,546)

(67,243)

(Accumulated deficit) retained

earnings

(loss) income (9,716) 12,603 (4,701) 1,338 8,287 12,190 15,404 (3,416)

Total stockholders' equity 2,407,308 2,629,145 2,714,363 2,916,674 3,195,757 3,439,118 3,732,206 3,988,222

TOTAL LIABILITIES AND

STOCKHOLDERS' EQUITY

$ 4,412,391 $ 4,631,471 $ 5,785,339 $ 6,010,381 $ 5,822,415 $ 6,052,470 $ 6,643,844 $ 6,952,012

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income $ 43,824 $ 51,697

$ 45,594

24,642

2,647

33,885

$ 46,567

$ 52,574

Adjustments to reconcile net income to net cash provided by operating

activities:

Depreciation and amortization 12,440 13,892

15,706

11,255

12,822

15,048

16,631

17,923

Accretion of discounts on marketable

securities (12,569) (12,844)

(12,393)

(10,370)

(10,927)

(10,855)

(12,364)

(11,880)

Amortization of issuance costs 910 912

1,089

1,819

1,691

1,046

1,047

Net loss on conversion inducement

and capped call settlement - -

599

Amortization of deferred contract

costs 12,450 13,474

14,279

14,853

15,977

17,231

18,712

20,325

Stock-based compensation, net of

amounts capitalized 134,652 142,190

158,461

164,265

180,462

200,558

205,386

196,841

Non-cash lease expense 6,781 6,670

7,002

8,389

9,001

9,060

9,001

9,073

Allowance for credit losses on

accounts receivable 3,842 3,800

4,473

4,520

3,895

3,967

4,642

4,953

(Gain) loss on disposal of property

and equipment 300 9

1,308

(145)

977

1,314

(5)

1,134

Changes in operating assets and liabilities:

Accounts receivable, net (86,076) 42,428

(116,327)

104,227

(115,899)

50,559

(196,255)

55,874

Deferred contract costs (19,534) (19,153)

(24,725)

(21,519)

(24,301)

(32,718)

(48,298)

(35,545)

Prepaid expenses and other

current assets 5,632 (1,630)

(16,581)

(10,263)

11,343

(13,116)

(9,263)

(14,445)

Other assets (443) 1,465

(4,639)

(1,217)

(1,821)

(162)

(606)

(522)

Accounts payable 48,692 (22,994)

17,034

(10,712)

96,352

(61,341)

12,329

21,500

Accrued expenses and other

liabilities (8,423) 10,147

4,083

5,648

(3,250)

30,010

20,481

(3,877)

Deferred revenue 21,946 (1,382)

170,265

(13,851)

21,086

6,984

259,065

19,647

Net cash provided by

operating activities 164,424 228,681

265,228

271,541

200,055

251,470

327,069

334,622

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of marketable securities (602,950) (905,632)

(507,309)

(970,302)

(751,477)

(795,593)

(1,082,469)

(1,304,965)

Maturities of marketable securities 564,319 624,402

428,445

555,938

697,172

631,163

603,384

1,046,415

Proceeds from sale of marketable

securities 8 (40)

233

(76)

13,212

(11)

17,979

(57)

Purchases of property and equipment (4,415) (8,385)

(7,761)

(8,748)

(15,152)

(16,786)

(8,892)

(11,358)

Capitalized software development

costs (16,229) (16,692)

(16,495)

(18,402)

(19,550)

(20,732)

(27,156)

(34,173)

Cash paid for acquisition of

businesses, net of cash acquired (444) (210)

(6,477)

(1,818)

(115,272)

(192)

(700)

(10,660)

Net cash used in investing

activities (59,711) (306,557)

(109,364)

(443,408)

(191,067)

(202,151)

(497,854)

(314,798)

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from exercise of stock

options 1,753 1,257

2,243

1,673

1,685

1,271

1,809

9,711

Proceeds for issuance of common stock under the employee stock

purchase plan 22,507 -

21,179

28,578

28,238

Proceeds from issuance of 2029 Convertible Senior Notes, net of

issuance costs - -

978,881

(190)

Proceeds from settlement of capped calls related to 2025 Convertible

Senior Notes - -

54,725

Purchase of capped calls related to

2029 Convertible Senior Notes - -

(100,900)

Repayments of 2025 Convertible

Senior Notes (25) (24)

(196,704)

(20)

(635,527)

Net cash provided by (used in)

financing activities 24,235 1,233

759,424

1,653

(605,454)

1,271

30,047

9,711

Q2 2024

Q3 2024

Q4 2024

Q1 2025

Q2 2025

Q3 2025

Q4 2025

Q1 2026

Effect of exchange rate changes on cash and cash equivalents

(203)

3,098

(5,723)

3,085

5,642

982

1,441

(4,480)

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

128,745

(73,545)

909,565

(167,129)

(590,824)

51,572

(139,297)

25,055

CASH AND CASH EQUIVALENTS -

Beginning of period

282,218

410,963

337,418

1,246,983

1,079,854

489,030

540,602

401,305

CASH AND CASH EQUIVALENTS - End

of period

$ 410,963

$ 337,418 $1,246,983

$1,079,854 $ 489,030 $ 540,602 $ 401,305 $ 426,360

Reconciliation of gross profit and gross margin

Plus: Stock-based compensation

expense

6,393

6,249

8,052

6,651

6,783

8,038

8,257

8,558

Plus: Amortization of acquired

intangibles 1,281 1,230 1,104 894 1,518 1,451 1,565 1,282

188

175

169

165

186

118

Plus: Employer payroll taxes on

employee stock transactions

GAAP gross margin

81 %

80 %

79 %

80 %

79 %

Non-GAAP gross margin

82 %

81 %

82 %

80 %

81 %

80 %

Reconciliation of operating expenses

Non-GAAP gross profit $ 529,522 $ 559,857 $ 602,773 $ 611,656 $ 669,248 $ 718,852 $ 776,297 $ 807,226

GAAP research and development

$ 274,599 $ 291,802 $ 316,314 $ 341,061 $ 387,482 $ 401,982 $ 417,926 $ 435,298

Less: Stock-based compensation expense

(87,105) (90,507) (97,276) (105,735) (112,445) (124,288) (127,058) (123,671)

Less: Employer payroll taxes on employee stock transactions

(6,589) (6,316) (7,410) (9,582) (11,819) (8,177) (10,605) (11,276)

Non-GAAP research and development

$ 180,905 $ 194,979 $ 211,628 $ 225,744 $ 263,218 $ 269,517 $ 280,263 $ 300,351

GAAP sales and marketing

$ 187,005 $ 187,772 $ 207,947

$ 214,291

$ 239,026

$ 238,729

$ 264,377

$ 279,823

Less: Stock-based compensation expense

(29,201) (30,749) (33,598)

(34,125)

(37,442)

(41,463)

(43,442)

(42,298)

Less: Amortization of acquired intangibles

(205) (208) (207)

(203)

(188)

(277)

(358)

Less: Employer payroll taxes on employee stock transactions

(608) (1,060) (873)

(1,570)

(1,359)

(1,480)

(1,514)

(1,895)

Non-GAAP sales and marketing

$ 156,991 $ 155,755 $ 173,269

$ 178,393

$ 200,037

$ 195,509

$ 219,144

$ 235,272

GAAP general and administrative

$ 47,558 $ 52,408 $ 59,896

$ 60,993

$ 69,774

$ 74,292

$ 74,641

$ 74,750

Less: Stock-based compensation expense

(11,953) (14,685) (19,535)

(17,754)

(23,792)

(26,769)

(26,629)

(22,314)

Less: Employer payroll taxes on employee stock transactions

(1,521) (1,621) (1,653)

(2,225)

(2,724)

(1,061)

(989)

(3,635)

Less: M&A transaction costs (1)

- - -

(1,373)

(201)

(695)

Non-GAAP general and administrative

$ 34,084 $ 36,102 $ 38,708

$ 41,014

$ 41,885

$ 46,462

$ 46,822

$ 48,106

Reconciliation of operating (loss) income and operating margin

GAAP operating income (loss) $ 12,618 $ 20,278

$ 9,392

$ (12,420)

$ (35,500)

$ (5,809)

$ 9,356

$ 7,327

Plus: Stock-based compensation

expense 134,652 142,190

158,461

164,265

180,462

200,558

205,386

196,841

Plus: Amortization of acquired

intangibles 1,486 1,438

1,311

1,097

1,706

1,728

1,842

1,640

Plus: Employer payroll taxes on

employee stock transactions 8,786 9,115

10,004

13,563

16,067

10,887

13,283

16,994

Plus: M&A transaction costs (1) - -

1,373

201

695

Non-GAAP operating income $ 157,542 $ 173,021

$ 179,168

$ 166,505

$ 164,108

$ 207,364

$ 230,068

$ 223,497

GAAP operating margin 2 % 3 %

1 %

(2)%

(4)%

(1)%

1 %

Non-GAAP operating margin 24 % 25 %

24 %

22 %

20 %

23 %

24 %

22 %

The three months ended ended June 30, 2025 were adjusted for M&A transaction costs, and these adjustments were applied prospectively, as these costs were not material to the consolidated results of operations in the prior periods.

Q2 2024

Q3 2024

Q4 2024

Q1 2025

Q2 2025

Q3 2025

Q4 2025

Q1 2026

Reconciliation of net income

GAAP net income

$ 43,824

$ 51,697

$ 45,594

$ 24,642

$ 2,647

$ 33,885

$ 46,567

$ 52,574

Plus: Stock-based compensation expense

134,652

142,190

158,461

164,265

180,462

200,558

205,386

196,841

Plus: Amortization of acquired intangibles

1,486

1,438

1,311

1,097

1,706

1,728

1,842

1,640

Plus: Employer payroll taxes on employee stock transactions

8,786

9,115

10,004

13,563

16,067

10,887

13,283

16,994

Plus: M&A transaction costs (1)

1,373

201

695

Plus: Amortization of issuance costs

910

912

1,089

1,819

1,691

1,046

1,047

Non-GAAP net income before non-GAAP tax adjustments

189,658

205,352

216,459

205,386

203,946

248,104

268,325

269,791

Income tax effects and adjustments

(2)

36,693

39,617

38,953

37,479

40,110

50,694

50,895

51,635

Non-GAAP net income after non-GAAP tax adjustments

$ 152,965

$ 165,735

$ 177,506

$ 167,907

$ 163,836

$ 197,410

$ 217,430

$ 218,156

Non-GAAP net income per share

before non-GAAP tax adjustments -basic

$ 0.57

$ 0.61

$ 0.64

$ 0.60

$ 0.59

$ 0.71

$ 0.76

Non-GAAP net income per share before non-GAAP tax adjustments -diluted

$ 0.53

$ 0.57

$ 0.60

$ 0.57

$ 0.69

$ 0.73

$ 0.74

Non-GAAP net income per share after non-GAAP tax adjustments -basic

$ 0.46

$ 0.49

$ 0.52

$ 0.49

$ 0.47

$ 0.57

$ 0.62

Non-GAAP net income per share after non-GAAP tax adjustments -diluted

$ 0.43

$ 0.46

$ 0.49

$ 0.46

$ 0.55

$ 0.59

$ 0.60

Shares used in non-GAAP net income

per share calculations:

Basic

334,941 337,562

340,320

343,097

346,185

348,645

350,892

353,272

Diluted

356,740 357,635

360,940

363,078

358,725

362,001

365,516

364,731

Non-GAAP financial information for the periods shown are adjusted for an assumed provision for income taxes based on our long-term projected tax rate of 21%. Due to the differences in the tax treatment of items excluded from non-GAAP earnings, our estimated tax rate on non-GAAP income may differ from our GAAP tax rate and from our actual tax liabilities.

‌Q2 2024

Q3 2024

Q4 2024

Q1 2025

Q2 2025

Q3 2025

Q4 2025

Q1 2026

Net cash provided by operating activities

$164,424

$228,681

$265,228

$271,541

$200,055

$251,470

$327,069

$334,622

Less: Purchases of property and equipment

(4,415)

(8,385)

(7,761)

(8,748)

(15,152)

(16,786)

(8,892)

(11,358)

Less: Capitalized software development costs

(16,229)

(16,692)

(16,495)

(18,402)

(19,550)

(20,732)

(27,156)

(34,173)

Free cash flow

$143,780 $203,604 $240,972 $244,391 $165,353 $213,952 $291,021 $ 289,091

Free cash flow margin

22 %

30 %

33 %

32 %

20 %

24 %

31 %

29 %

‌Q2 2024

Q3 2024

Q4 2024

Q1 2025

Q2 2025

Q3 2025

Q4 2025

Q1 2026

Net dollar-based retention rate

mid-110%'s

high-110%'s

about 120%

low-120%'s

Total customers

28,700

29,200

30,000

30,500

31,400

32,000

32,700

33,200

Customers with equal or greater than

$1 million ARR

462

603

Customers with equal or greater than

$100,000 ARR

3,390

3,490

3,610

3,770

3,850

4,060

4,310

4,550

Percentage of ARR comprised by

$100k+ customers

87 %

88 %

89 %

90 %

Percentage of customers using 2+ products

83 %

84 %

85 %

Percentage of customers using 4+ products

49 %

50 %

51 %

52 %

54 %

55 %

56 %

Percentage of customers using 6+ products

25 %

26 %

28 %

29 %

31 %

33 %

35 %

Percentage of customers using 8+ products

11 %

12 %

13 %

14 %

16 %

18 %

20 %

Percentage of customers using 10+ products

5 %

6 %

7 %

8 %

9 %

11 %

Contact Information

Yuka Broderick

Datadog Investor Relations [email protected]

Dan Haggerty

Datadog Public Relations [email protected]

Datadog is a registered trademark of Datadog, Inc.

All product and company names herein may be trademarks of their registered owners.

Disclaimer

Datadog Inc. published this content on May 07, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on May 07, 2026 at 11:32 UTC.