Form 8-K

8-K — Datadog, Inc.

Accession: 0001628280-26-053829

Filed: 2026-08-06

Period: 2026-08-06

CIK: 0001561550

SIC: 7372 (SERVICES-PREPACKAGED SOFTWARE)

Item: Results of Operations and Financial Condition

Item: Financial Statements and Exhibits

Documents

8-K — ddog-20260806.htm (Primary)

EX-99.1 (ex-991x20260630x8k.htm)

XML — IDEA: XBRL DOCUMENT (R1.htm)

8-K

8-K (Primary)

Filename: ddog-20260806.htm · Sequence: 1

ddog-20260806

0001561550false00015615502026-08-062026-08-06

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 6, 2026

Datadog, Inc.

(Exact name of Registrant as Specified in Its Charter)

Nevada

001-39051

27-2825503

(State or Other Jurisdiction

of Incorporation)

(Commission

File Number)

(IRS Employer

Identification No.)

620 8th Avenue, 45th Floor

New York, New York 10018

(Address of Principal Executive Offices, including zip code)

(866) 329-4466

(Registrant’s Telephone Number, Including Area Code)

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange

on which registered

Class A Common Stock, par value $0.00001 per share

DDOG

The Nasdaq Stock Market LLC

(Nasdaq Global Select Market)

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition.

On August 6, 2026, Datadog, Inc. (the “Company”) issued a press release announcing its financial results for the quarter ended June 30, 2026. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

The information contained in this Item 2.02, including Exhibit 99.1 hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing made by the Company under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filings, unless expressly incorporated by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.

Description

99.1

Press Release dated August 6, 2026

104

Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Datadog, Inc.

Date: August 6, 2026

By:

/s/ David Obstler

David Obstler

Chief Financial Officer

EX-99.1

Filename: ex-991x20260630x8k.htm · Sequence: 2

Document

Exhibit 99.1

Datadog Announces Second Quarter 2026 Financial Results

August 6, 2026

Second quarter revenue grew 36% year-over-year to $1.12 billion

Robust growth of larger customers, with about 4,720 $100k+ ARR customers, up from about 3,850 a year ago

Launched AI-powered Bits Code, Bits Chat, and Bits Agent Builder for general availability

NEW YORK-- Datadog, Inc. (NASDAQ:DDOG), the leading AI-powered observability and security platform, today announced financial results for its second quarter ended June 30, 2026.

"Datadog delivered a strong quarter, with 36% year-over-year revenue growth, $316 million in operating cash flow, and $279 million in free cash flow," said Olivier Pomel, co-founder and CEO of Datadog. "Our customers are building and deploying with AI, and they are using the Datadog platform to observe, secure, and act on their AI-enabled solutions."

Pomel added, "We are innovating rapidly to help our customers manage rising complexity, and increasingly build autonomy into their operations."

Second Quarter 2026 Financial Highlights:

•Revenue was $1.12 billion, an increase of 36% year-over-year.

•GAAP operating income was $5 million; GAAP operating margin was 0%.

•Non-GAAP operating income was $257 million; non-GAAP operating margin was 23%.

•GAAP net income per diluted share was $0.12; non-GAAP net income per diluted share was $0.65.

•Operating cash flow was $316 million, with free cash flow of $279 million.

•Cash, cash equivalents, and marketable securities were $5.0 billion as of June 30, 2026.

Second Quarter & Recent Business Highlights:

•As of June 30, 2026, we had about 4,720 customers with ARR of $100,000 or more, an increase of 23% from about 3,850 as of June 30, 2025.

•Named a Leader in the Gartner Magic Quadrant for Observability Platforms, 2026. This is the sixth consecutive year Gartner has positioned Datadog as a Leader in the Magic Quadrant.

•Acquired Adaptive ML, a frontier AI startup developing the world’s first Reinforcement Learning Operations platform, to accelerate Datadog AI Research’s investment in world models and agentic LLM post-training for observability—combining Datadog’s access to real-world infrastructure and security data with Adaptive ML’s expertise in building specialized, high-performance AI agents.

•Launched more than 100 new capabilities at DASH 2026 to help customers drive autonomy and manage growing AI and security complexity. Highlights included fully autonomous Bits AI for end-to-end incident detection, investigation, and remediation; AI Guard to protect AI agents from prompt injection and poisoning attacks; Bring Your Own Cloud for deploying Datadog within customer environments; and Bits Agent Builder for creating custom AI agents.

Third Quarter and Full Year 2026 Outlook:

Based on information as of today, August 6, 2026, Datadog is providing the following guidance:

•Third Quarter 2026 Outlook:

◦Revenue between $1.135 billion and $1.145 billion.

◦Non-GAAP operating income between $260 million and $270 million.

◦Non-GAAP net income per share between $0.63 and $0.65, assuming approximately 378 million weighted average diluted shares outstanding.

•Full Year 2026 Outlook:

◦Revenue between $4.45 billion and $4.47 billion.

◦Non-GAAP operating income between $1.01 billion and $1.03 billion.

◦Non-GAAP net income per share between $2.50 and $2.54, assuming approximately 376 million weighted average diluted shares outstanding.

Datadog has not reconciled its expectations as to non-GAAP operating income, or as to non-GAAP net income per share, to their most directly comparable GAAP measure as a result of uncertainty regarding, and the potential variability of, reconciling items such as stock-based compensation and employer payroll taxes on equity incentive plans. Accordingly, reconciliation is not available without unreasonable effort, although it is important to note that these factors could be material to Datadog’s results computed in accordance with GAAP.

Conference Call Details:

•What: Datadog financial results for the second quarter of 2026 and outlook for the third quarter and the full year 2026

•When: August 6, 2026 at 8:00 A.M. Eastern Time (5:00 A.M. Pacific Time)

•Dial in: To access the call in the U.S., please register here. Callers are encouraged to dial into the call 10 to 15 minutes prior to the start to prevent any delay in joining.

•Webcast: https://investors.datadoghq.com (live and replay)

•Replay: A replay of the call will be archived on the investor relations website

About Datadog

Datadog is the leading observability and security platform for the AI era, providing businesses with unified visibility across the technology stack to manage complexity at scale. It brings applications, infrastructure, data, models, and security into one place, using AI to detect and resolve issues before they impact customers. Trusted globally by Fortune 500 companies and high-growth AI leaders, Datadog enables businesses to move faster with clarity and confidence.

Forward-Looking Statements

This press release and the earnings call referencing this press release contain “forward-looking” statements, as that term is defined under the federal securities laws, including but not limited to statements regarding Datadog’s strategy, product and platform capabilities, the growth in and ability to capitalize on long-term market opportunities including the pace and scope of cloud migration, digital transformation and AI deployment, gross margins, operating margins including with respect to sales and marketing, research and development expenses, net interest and other income, cash taxes, capital expenditures and capitalized software, and Datadog’s future financial performance, including its outlook for the third quarter and the full year 2026third quarter and the full year 2026 and related notes and assumptions. These forward-looking statements are based on Datadog’s current assumptions, expectations and beliefs and are subject to substantial risks, uncertainties, assumptions and changes in circumstances that may cause Datadog’s actual results, performance or achievements to differ materially from those expressed or implied in any forward-looking statement.

The risks and uncertainties referred to above include, but are not limited to (1) our recent rapid growth may not be indicative of our future growth; (2) our history of operating losses; (3) our limited operating history; (4) our dependence on existing customers purchasing additional subscriptions and products from us and renewing their subscriptions; (5) our ability to attract new customers; (6) our ability to effectively develop and expand our sales and marketing capabilities; (7) risk of a security breach; (8) risk of interruptions or performance problems associated with our products and platform capabilities; (9) our ability to adapt and respond to rapidly changing technology or customer needs; (10) the competitive markets in which we participate; (11) risks associated with successfully managing our growth; (12) risks associated with changing laws, regulations, and contractual obligations related to data privacy and security and (13) general market, political, economic, and business conditions including concerns about trade policies, tariffs, reduced economic growth and associated decreases in information technology spending. These risks and uncertainties are more fully described in our filings with

the Securities and Exchange Commission (SEC), including in the section entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 18, 2026. Additional information will be made available in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2026 and other filings and reports that we may file from time to time with the SEC. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, we cannot guarantee future results, levels of activity, performance, achievements, or events and circumstances reflected in the forward-looking statements will occur. Forward-looking statements represent our beliefs and assumptions only as of the date of this press release. We disclaim any obligation to update forward-looking statements.

About Non-GAAP Financial Measures

Datadog discloses the following non-GAAP financial measures in this release and the earnings call referencing this press release: 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 diluted share, non-GAAP net income (loss) per basic 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% 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.

Datadog, Inc.

Condensed Consolidated Statements of Operations

(In thousands, except per share data; unaudited)

Three Months Ended

June 30,

Six Months Ended

June 30,

2026

2025

2026

2025

Revenue

1,121,454

826,760

2,127,880

1,588,313

Cost of revenue (1)(2)(3)

240,113

165,978

449,341

323,606

Gross profit

881,341

660,782

1,678,539

1,264,707

Operating expenses:

Research and development (1)(3)

477,968

387,482

913,266

728,543

Sales and marketing (1)(2)(3)

311,519

239,026

591,342

453,317

General and administrative (1)(3)(4)

86,399

69,774

161,149

130,767

Total operating expenses

875,886

696,282

1,665,757

1,312,627

Operating income (loss)

5,455

(35,500)

12,782

(47,920)

Other income:

Interest expense (5)

(3,255)

(3,075)

(6,374)

(6,038)

Interest income and other income, net

49,533

44,663

104,255

91,842

Other income, net

46,278

41,588

97,881

85,804

Income before provision for income taxes

51,733

6,088

110,663

37,884

Provision for income taxes

7,175

3,441

13,531

10,595

Net income

44,558

2,647

97,132

27,289

Net income per share - basic

0.13

0.01

0.27

0.08

Net income per share - diluted

0.12

0.01

0.27

0.08

Weighted average shares used in calculating net income per share:

Basic

356,253

346,185

354,771

344,650

Diluted

371,023

358,725

368,271

361,289

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

Cost of revenue

9,256

6,783

17,815

13,434

Research and development

131,682

112,445

255,353

218,180

Sales and marketing

47,098

37,442

89,396

71,567

General and administrative

32,215

23,792

54,529

41,546

Total

220,251

180,462

417,093

344,727

(2) Includes amortization of acquired intangibles as follows:

Cost of revenue

1,310

1,518

2,592

2,412

Sales and marketing

362

188

719

391

Total

1,672

1,706

3,311

2,803

(3) Includes employer payroll taxes on employee stock transactions as follows:

Cost of revenue

392

165

580

351

Research and development

21,211

11,819

32,487

21,401

Sales and marketing

3,632

1,359

5,527

2,929

General and administrative

2,408

2,724

6,045

4,949

Total

27,643

16,067

44,639

29,630

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

General and administrative

2,010

1,373

2,704

1,373

Total

2,010

1,373

2,704

1,373

(5) Includes amortization of issuance costs as follows:

Interest expense

1,049

1,691

2,096

3,510

Total

1,049

1,691

2,096

3,510

Datadog, Inc.

Condensed Consolidated Balance Sheets

(In thousands; unaudited)

June 30,

2026

December 31,

2025

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

434,957

401,305

Marketable securities

4,550,481

4,073,531

Accounts receivable, net of allowance for credit losses of $24,021 and $19,292 as of June 30, 2026 and December 31, 2025, respectively

827,345

741,262

Deferred contract costs, current

87,350

76,022

Prepaid expenses and other current assets

108,424

90,160

Total current assets

6,008,557

5,382,280

Property and equipment, net

409,634

338,093

Operating lease assets

206,037

214,674

Goodwill

706,721

530,568

Intangible assets, net

23,157

14,968

Deferred contract costs, non-current

145,028

126,708

Other assets

48,541

36,553

TOTAL ASSETS

7,547,675

6,643,844

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:

Accounts payable

313,529

148,791

Accrued expenses and other current liabilities

230,548

209,595

Operating lease liabilities, current

44,218

39,369

Deferred revenue, current

1,286,690

1,193,646

Total current liabilities

1,874,985

1,591,401

Operating lease liabilities, non-current

248,038

256,187

Convertible senior notes, net, non-current

985,545

983,449

Deferred revenue, non-current

50,860

68,711

Other liabilities

21,087

11,890

Total liabilities

3,180,515

2,911,638

STOCKHOLDERS' EQUITY:

Common stock

Additional paid-in capital

4,139,000

3,579,010

Accumulated other comprehensive (loss) income

(6,764)

15,404

Retained earnings

234,921

137,789

Total stockholders’ equity

4,367,160

3,732,206

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

7,547,675

6,643,844

Datadog, Inc.

Condensed Consolidated Statements of Cash Flow

(In thousands; unaudited)

Three Months Ended

June 30,

Six Months Ended

June 30,

2026

2025

2026

2025

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income

44,558

2,647

97,132

27,289

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

19,489

12,822

37,412

24,077

Accretion of discounts on marketable securities

(12,480)

(10,927)

(24,360)

(21,297)

Amortization of issuance costs

1,049

1,691

2,096

3,510

Amortization of deferred contract costs

22,077

15,977

42,402

30,830

Stock-based compensation, net of amounts capitalized

220,251

180,462

417,093

344,727

Non-cash lease expense

9,517

9,001

18,590

17,390

Allowance for credit losses on accounts receivable

5,641

3,895

10,594

8,415

Loss on disposal of property and equipment

534

977

1,668

832

Changes in operating assets and liabilities:

Accounts receivable, net

(151,649)

(115,899)

(95,775)

(11,672)

Deferred contract costs

(36,505)

(24,301)

(72,050)

(45,820)

Prepaid expenses and other current assets

(730)

11,343

(15,175)

1,080

Other assets

(1,955)

(1,821)

(2,477)

(3,038)

Accounts payable

133,620

96,352

155,120

85,640

Accrued expenses and other liabilities

6,975

(3,250)

3,098

2,398

Deferred revenue

55,480

21,086

75,127

7,235

Net cash provided by operating activities

315,872

200,055

650,495

471,596

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of marketable securities

(1,132,495)

(751,477)

(2,437,460)

(1,721,779)

Maturities of marketable securities

598,288

697,172

1,644,703

1,253,110

Proceeds from sale of marketable securities

323,146

13,212

323,089

13,136

Purchases of property and equipment

(9,889)

(15,152)

(21,247)

(23,900)

Capitalized software development costs

(27,279)

(19,550)

(61,452)

(37,952)

Cash paid for acquisition of businesses; net of cash acquired

(101,650)

(115,272)

(112,310)

(117,090)

Net cash used in investing activities

(349,879)

(191,067)

(664,677)

(634,475)

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from exercise of stock options

2,754

1,685

12,465

3,358

Proceeds for issuance of common stock under the employee stock purchase plan

39,067

28,578

39,067

28,578

Proceeds from issuance of 2029 Convertible Senior Notes, net of issuance costs

—

(190)

—

(190)

Repayments of 2025 Convertible Senior Notes

—

(635,527)

—

(635,547)

Net cash provided by (used in) financing activities

41,821

(605,454)

51,532

(603,801)

Effect of exchange rate changes on cash and cash equivalents

783

5,642

(3,698)

8,727

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

8,597

(590,824)

33,652

(757,953)

CASH AND CASH EQUIVALENTS—Beginning of period

426,360

1,079,854

401,305

1,246,983

CASH AND CASH EQUIVALENTS—End of period

434,957

489,030

434,957

489,030

Datadog, Inc.

Reconciliation from GAAP to Non-GAAP Results

(In thousands; unaudited)

Three Months Ended

June 30,

Six Months Ended

June 30,

2026

2025

2026

2025

Reconciliation of gross profit and gross margin

GAAP gross profit

881,341

660,782

1,678,539

1,264,707

Plus: Stock-based compensation expense

9,256

6,783

17,815

13,434

Plus: Amortization of acquired intangibles

1,310

1,518

2,592

2,412

Plus: Employer payroll taxes on employee stock transactions

392

165

580

351

Non-GAAP gross profit

892,299

669,248

1,699,526

1,280,904

GAAP gross margin

79%

80%

79%

80%

Non-GAAP gross margin

80%

81%

80%

81%

Reconciliation of operating expenses

GAAP research and development

477,968

387,482

913,266

728,543

Less: Stock-based compensation expense

(131,682)

(112,445)

(255,353)

(218,180)

Less: Employer payroll taxes on employee stock transactions

(21,211)

(11,819)

(32,487)

(21,401)

Non-GAAP research and development

325,075

263,218

625,426

488,962

GAAP sales and marketing

311,519

239,026

591,342

453,317

Less: Stock-based compensation expense

(47,098)

(37,442)

(89,396)

(71,567)

Less: Amortization of acquired intangibles

(362)

(188)

(719)

(391)

Less: Employer payroll taxes on employee stock transactions

(3,632)

(1,359)

(5,527)

(2,929)

Non-GAAP sales and marketing

260,427

200,037

495,700

378,430

GAAP general and administrative

86,399

69,774

161,149

130,767

Less: Stock-based compensation expense

(32,215)

(23,792)

(54,529)

(41,546)

Less: Employer payroll taxes on employee stock transactions

(2,408)

(2,724)

(6,045)

(4,949)

Less: M&A transaction costs

(2,010)

(1,373)

(2,704)

(1,373)

Non-GAAP general and administrative

49,766

41,885

97,871

82,899

Reconciliation of operating (loss) income and operating margin

GAAP operating income (loss)

5,455

(35,500)

12,782

(47,920)

Plus: Stock-based compensation expense

220,251

180,462

417,093

344,727

Plus: Amortization of acquired intangibles

1,672

1,706

3,311

2,803

Plus: Employer payroll taxes on employee stock transactions

27,643

16,067

44,639

29,630

Plus: M&A transaction costs

2,010

1,373

2,704

1,373

Non-GAAP operating income

257,031

164,108

480,529

330,613

GAAP operating margin

(4)%

(3)%

Non-GAAP operating margin

23%

20%

23%

21%

Datadog, Inc.

Reconciliation from GAAP to Non-GAAP Results

(In thousands, except per share data; unaudited)

Three Months Ended

June 30,

Six Months Ended

June 30,

2026

2025

2026

2025

Reconciliation of net income

GAAP net income

44,558

2,647

97,132

27,289

Plus: Stock-based compensation expense

220,251

180,462

417,093

344,727

Plus: Amortization of acquired intangibles

1,672

1,706

3,311

2,803

Plus: Employer payroll taxes on employee stock transactions

27,643

16,067

44,639

29,630

Plus: M&A transaction costs

2,010

1,373

2,704

1,373

Plus: Amortization of issuance costs

1,049

1,691

2,096

3,510

Non-GAAP net income before non-GAAP tax adjustments

297,183

203,946

566,975

409,332

Income tax effects and adjustments (1)

56,740

40,110

108,374

77,589

Non-GAAP net income after non-GAAP tax adjustments

240,443

163,836

458,601

331,743

Net income per share before non-GAAP tax adjustments - basic

0.83

0.59

1.60

1.19

Net income per share before non-GAAP tax adjustments - diluted

0.80

0.57

1.54

1.13

Net income per share after non-GAAP tax adjustments - basic

0.67

0.47

1.29

0.96

Net income per share after non-GAAP tax adjustments - diluted

0.65

0.46

1.25

0.92

Shares used in non-GAAP net income per share calculations:

Basic

356,253

346,185

354,771

344,650

Diluted

371,023

358,725

368,271

361,289

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.

Datadog, Inc.

Reconciliation of GAAP Cash Flow from Operating Activities to Free Cash Flow

(In thousands; unaudited)

Three Months Ended

June 30,

Six Months Ended

June 30,

2026

2025

2026

2025

Net cash provided by operating activities

315,872

200,055

650,495

471,596

Less: Purchases of property and equipment

(9,889)

(15,152)

(21,247)

(23,900)

Less: Capitalized software development costs

(27,279)

(19,550)

(61,452)

(37,952)

Free cash flow

278,704

165,353

567,796

409,744

Free cash flow margin

25%

20%

27%

26%

Contact Information

Yuka Broderick

Datadog Investor Relations

IR@datadoghq.com

Dan Haggerty

Datadog Public Relations

Press@datadoghq.com

Datadog is a registered trademark of Datadog, Inc.

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

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