Form type: 10-Q
Period end: 2026-03-31
| Three Months Ended March 31, 2026 | Three Months Ended March 31, 2025 | |
|---|---|---|
| Revenue | 1,006,426,000.00 | 761,553,000.00 |
| Total Revenue | ||
| Cost of revenue | 209,228,000.00 | 157,628,000.00 |
| Total COGS | ||
| Gross Profit | ||
| General and administrative | 74,750,000.00 | 60,993,000.00 |
| Income tax expense (benefit) | 6,356,000.00 | 7,154,000.00 |
| Interest expense | 3,119,000.00 | 2,963,000.00 |
| Interest income | -49,229,000.00 | -50,727,000.00 |
| Other nonoperating income (expense), net | -5,493,000.00 | 3,548,000.00 |
| Research and development | 435,298,000.00 | 341,061,000.00 |
| Selling and marketing | 279,823,000.00 | 214,291,000.00 |
| Total Expenses | ||
| Net Income | ||
| Net income (loss) available to common stockholders | ||
| Basic earnings per share |
| March 31, 2026 | December 31, 2025 | |
|---|---|---|
| Assets | ||
| Accounts receivable | 680,434,000.00 | 741,262,000.00 |
| Cash and cash equivalents | 426,360,000.00 | 401,305,000.00 |
| Deferred costs | 218,000,000.00 | 202,700,000.00 |
| Goodwill and intangibles | 540,543,000.00 | 530,568,000.00 |
| Intangible assets, net | 0.00 | 14,968,000.00 |
| Operating lease right-of-use assets | 213,260,000.00 | 214,674,000.00 |
| Other assets (derived) | 14,880,000.00 | 30,000.00 |
| Other noncurrent assets | 42,866,000.00 | 36,553,000.00 |
| Prepaid expenses and other current assets | 104,468,000.00 | 90,160,000.00 |
| Property, plant and equipment | 378,944,000.00 | 338,093,000.00 |
| Short-term investments | 4,332,257,000.00 | 4,073,531,000.00 |
| Total Assets | ||
| Liabilities | ||
| Deferred revenue | 1,231,152,000.00 | 1,193,646,000.00 |
| Deferred revenue, noncurrent | 50,918,000.00 | 68,711,000.00 |
| Long-term debt | 984,496,000.00 | 983,449,000.00 |
| Operating lease liabilities, current | 41,401,000.00 | 39,369,000.00 |
| Operating lease liabilities, noncurrent | 259,155,000.00 | 256,187,000.00 |
| Other accrued liabilities | 51,405,000.00 | 46,896,000.00 |
| Other current liabilities | 208,549,000.00 | 209,595,000.00 |
| Other liabilities (derived) | 72,240,000.00 | 48,961,000.00 |
| Other noncurrent liabilities | 13,318,000.00 | 11,890,000.00 |
| Taxes payable | 51,156,000.00 | 52,934,000.00 |
| Total Liabilities | ||
| Equity | ||
| Stockholders equity | 3,988,222,000.00 | 3,732,206,000.00 |
| Total Equity | ||
| Three Months Ended March 31, 2026 | Three Months Ended March 31, 2025 | |
|---|---|---|
| Operating activities | ||
| Net income | 52,574,000.00 | 24,642,000.00 |
| Depreciation and amortization | 16,300,000.00 | 10,100,000.00 |
| Stock-based compensation | 196,841,000.00 | 164,265,000.00 |
| Changes in operating assets and liabilities, net | 68,907,000.00 | 72,534,000.00 |
| Net cash from operating activities | ||
| Investing activities | ||
| Investing activities, net | -314,798,000.00 | -443,408,000.00 |
| Net cash from investing activities | - | - |
| Financing activities | ||
| Financing activities, net | 9,711,000.00 | 1,653,000.00 |
| Net cash from financing activities | ||
| Effect of exchange rate changes on cash | - | |
| Net change in cash | - | |
| Cash at beginning of period | 1,246,983,000.00 | |
| Cash at end of period | 1,079,854,000.00 | |
| Amount | |
|---|---|
| Balance at beginning of period | 3,732,206,000.00 |
| Net income | 52,574,000.00 |
| Other equity movements | 203,442,000.00 |
| Balance at end of period | 3,988,222,000.00 |
Datadog, Inc. is a public reporting company classified under Services-Prepackaged Software. The accompanying interim condensed financial statements are unaudited and have been prepared from the connected books and records of the Company, and the results of operations for the interim period are not necessarily indicative of the results to be expected for the full year. These unaudited condensed consolidated financial statements and related notes should be read in conjunction with the audited consolidated financial statements and the related notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.
Revenue for the period ended March 31, 2026 was $1,006.4 million, an increase of 32.2% from $761.6 million in the prior-year period, and cost of revenue was $209.2 million, an increase of 32.7% from $157.6 million. Deferred revenue was $1,231.2 million, up 29.7% from $949.1 million, and noncurrent deferred revenue was $50.9 million, up 136.2% from $21.6 million, while deferred costs increased 46.0% to $218.0 million from $149.3 million. Net income for the period was $52.6 million, and basic earnings per share was $0.15 based on weighted-average basic shares outstanding of 353,272,000.
Total debt was $2,963.8 million as of March 31, 2026, consisting principally of long-term debt of $984.5 million, current operating lease liabilities of $41.4 million, and noncurrent operating lease liabilities of $259.2 million. Long-term debt increased 0.4% from $980.3 million in the prior-year period, current operating lease liabilities increased 21.0% from $34.2 million, and noncurrent operating lease liabilities increased 13.7% from $228.0 million. Operating lease right-of-use assets were $213.3 million, an increase of 5.0% from $203.1 million. Interest income was $49.2 million compared to $50.7 million in the prior-year period, and interest expense increased 5.3% to $3.1 million from $3.0 million.
Total stockholders' equity was $3,988.2 million as of March 31, 2026, an increase of 36.7% from $2,916.7 million in the prior-year period. Cash and cash equivalents were $426.4 million as of March 31, 2026, a decrease of 60.5% from $1,079.9 million in the prior-year period, while short-term investments increased 28.6% to $4,332.3 million from $3,369.8 million. The decrease in cash was accompanied by the growth in our short-term investment portfolio, and our combined position of cash, cash equivalents, and short-term investments remains substantial.
| Current | Prior | |
|---|---|---|
| Long-term debt | 984,496,000.00 | 983,449,000.00 |
| Operating lease liabilities, current | 41,401,000.00 | 39,369,000.00 |
| Operating lease liabilities, noncurrent | 259,155,000.00 | 256,187,000.00 |
| Total debt | 1,285,052,000.00 | 1,279,005,000.00 |
| Current | Prior | |
|---|---|---|
| Property, plant and equipment | 378,944,000.00 | 338,093,000.00 |
| Total property and equipment | 378,944,000.00 | 338,093,000.00 |
| Current | Prior | |
|---|---|---|
| Stockholders equity | 3,988,222,000.00 | 3,732,206,000.00 |
| Total stockholders' equity | 3,988,222,000.00 | 3,732,206,000.00 |
Datadog, Inc. is a public reporting company classified under Services-Prepackaged Software, and the following discussion should be read in conjunction with our condensed consolidated financial statements and related notes. Datadog, Inc. is a public reporting company classified under Services-Prepackaged Software. Revenue for the three months ended March 31, 2026 was $1,006.4 million, an increase of $244.9 million, or 32.2%, from $761.6 million in the comparable prior-year period, driven by [COMPLETE: description of revenue drivers, such as growth from existing customers and new customer additions]. Gross profit increased to $797.2 million from $603.9 million in the prior-year period, as cost of revenue increased to $209.2 million from $157.6 million, an increase of 32.7%, primarily attributable to [COMPLETE: description of cost of revenue drivers, such as third-party cloud infrastructure hosting costs].
Research and development expense increased 27.6% to $435.3 million from $341.1 million, selling and marketing expense increased 30.6% to $279.8 million from $214.3 million, and general and administrative expense increased 22.6% to $74.8 million from $61.0 million, in each case primarily reflecting [COMPLETE: description of expense drivers, such as increased personnel and related costs]. Interest income decreased to $49.2 million from $50.7 million, interest expense increased 5.3% to $3.1 million from $3.0 million, and other nonoperating items produced net income of $5.5 million compared to a net expense of $3.5 million in the prior-year period. Income tax expense decreased 11.2% to $6.4 million from $7.2 million. As a result, net income for the three months ended March 31, 2026 was $52.6 million, compared to $24.6 million for the three months ended March 31, 2025, and basic earnings per share was $0.15 based on weighted-average basic shares outstanding of 353,272,000.
As of March 31, 2026, our principal sources of liquidity were cash and cash equivalents of $426.4 million and short-term investments of $4,332.3 million. Cash and cash equivalents decreased 60.5% from $1,079.9 million in the comparable prior-year period, while short-term investments increased 28.6% from $3,369.8 million, reflecting [COMPLETE: description of drivers of the change in cash, such as purchases of investments or acquisitions]. Deferred revenue increased 29.7% to $1,231.2 million and noncurrent deferred revenue increased 136.2% to $50.9 million, accounts receivable increased 38.8% to $680.4 million, and long-term debt was $984.5 million, substantially unchanged from $980.3 million in the prior-year period. Our primary market risk exposure is interest rate risk on cash, cash equivalents, and short-term investments, and we do not have material foreign currency or commodity price exposure. We believe that our existing cash and cash equivalents and short-term investments will be sufficient to meet our working capital and capital expenditure needs for at least the next twelve months.
We are exposed to market risks in the ordinary course of our business, and our primary market risk exposure is interest rate risk on our cash, cash equivalents, and short-term investments, as changes in prevailing interest rates could reduce our investment income or the fair value of our investment portfolio. As of March 31, 2026, we held cash and cash equivalents of $426.4 million, a decline of 60.5% from $1,079.9 million in the prior period, and short-term investments of $4,332.3 million, an increase of 28.6% from $3,369.8 million. The composition of these balances subjects us to reinvestment and valuation risk. Interest income was $49.2 million in the current period compared with $50.7 million in the prior period, a decline of 3.0%, and further declines in interest rates could reduce what has been a meaningful contributor to our results.
We also carry long-term debt of $984.5 million and total liabilities of $2,963.8 million against total stockholders' equity of $3,988.2 million, and our ability to service or refinance these obligations could be affected by market conditions. Interest expense was $3.1 million in the current period compared with $3.0 million in the prior period, an increase of 5.3%. In addition, our accounts receivable increased 38.8% to $680.4 million from $490.2 million, which exposes us to credit risk if customers fail to pay amounts owed on a timely basis.
We do not have material foreign currency or commodity price exposure, although this could change if our operations evolve. We will continue to monitor our exposure to market risks and may take actions in the future to mitigate the impact of changes in interest rates or other market conditions on our financial position and results of operations.
Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Our disclosure controls and procedures are designed to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to management, particularly during the period in which this report is being prepared. Based on that evaluation, management concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of the end of the period covered by this report, March 31, 2026. [COMPLETE: Management to review and adopt this conclusion language prior to filing.]
Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. There were no changes in our internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Accordingly, our controls are designed to provide reasonable assurance regarding the reliability of financial reporting, and management does not expect that our disclosure controls and procedures or internal control over financial reporting will prevent or detect all errors and all fraud.
From time to time, we are involved in legal proceedings arising in the ordinary course of business. The outcome of litigation is inherently uncertain, and any claims or proceedings, regardless of merit, could result in costs and diversion of management attention. Management does not currently believe that any pending matter is material to our financial statements.
Future litigation may be necessary, among other things, to defend ourselves or our customers or to establish or protect our rights, and the results of any such current or future legal proceedings cannot be predicted with certainty. Based on currently available information, we do not believe that the ultimate resolution of any matters currently pending against us will have a material adverse effect on our financial statements.
Datadog, Inc. is a public reporting company classified under Services-Prepackaged Software, and an investment in our securities involves risks and uncertainties that could materially and adversely affect our business, financial condition, results of operations, and prospects. For the quarterly period ended March 31, 2026, we generated revenue of $1,006,426,000 and net income of $52,574,000, and there can be no assurance that we will sustain these levels of revenue growth or profitability in future periods. Our cost of revenue increased 32.7% to $209,228,000, research and development expenses increased 27.6% to $435,298,000, selling and marketing expenses increased 30.6% to $279,823,000, and general and administrative expenses increased 22.6% to $74,750,000 compared with the prior period, and if our expenses continue to grow faster than anticipated or our revenue does not grow commensurately, our operating results could be harmed. In addition to the risk factors described in our prior SEC filings, investors should carefully consider the matters discussed below. [COMPLETE: cross-reference to risk factors in the company's most recent Annual Report on Form 10-K and description of any material changes thereto]
Our primary market risk exposure is interest rate risk on cash, cash equivalents, and short-term investments, and changes in prevailing interest rates could adversely affect the value of, and income generated by, these holdings. As of March 31, 2026, we held cash and cash equivalents of $426,360,000, a decrease of 60.5% from the prior period, and short-term investments of $4,332,257,000. We recorded interest income of $49,229,000 in the current period, down from $50,727,000 in the prior period, and a decline in interest rates could further reduce this income. We also carry long-term debt of $984,496,000 and incurred interest expense of $3,119,000 during the period, and our ability to service this indebtedness depends on our future operating performance. We do not have material foreign currency or commodity price exposure, although this could change as our operations evolve.
Our business also faces risks related to the concentration and timing of customer collections and obligations. Accounts receivable increased 38.8% to $680,434,000, and any deterioration in the creditworthiness of our customers or delays in collections could adversely affect our liquidity and results of operations. Our deferred revenue balances increased to $1,231,152,000 for current deferred revenue and $50,918,000 for noncurrent deferred revenue, representing increases of 29.7% and 136.2%, respectively, and our recognition of this revenue is subject to our continued performance of contractual obligations. We are involved in legal proceedings arising in the ordinary course of business from time to time, and while management does not currently believe any pending matter is material to the financial statements, litigation is inherently unpredictable and an adverse outcome could result in significant costs or liabilities. The occurrence of any of these risks, or of risks not currently known to us or that we currently deem immaterial, could materially harm our business and cause the trading price of our securities to decline.
During the three months ended March 31, 2026, the following disclosure is provided pursuant to Item 408(a) of Regulation S-K regarding Rule 10b5-1 trading arrangements of the directors and officers of Datadog, Inc. [COMPLETE: Rule 10b5-1 trading arrangement adoptions and terminations from the D&O questionnaires]