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What changed in Datadog's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Datadog's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+255 added−254 removedSource: 10-K (2026-02-18) vs 10-K (2025-02-20)

Top changes in Datadog's 2025 10-K

255 paragraphs added · 254 removed · 222 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeCloud Network Monitoring enables the analysis and visualization of the flow of network traffic in on-premise, cloud-based or hybrid environments, helping customers determine when the network is the root cause of an issue. Network Device Monitoring seamlessly consolidates monitoring and troubleshooting of network hardware, such as routers, firewalls, switches, load balancers, and other network devices. • Error Tracking.
Biggest changeBy providing rich debug context, down to lines of code, Error Tracking helps users identify root problems, accelerating incident resolution. • Network Monitoring. Cloud Network Monitoring enables the analysis and visualization of the flow of network traffic in on-premise, cloud-based or hybrid environments, helping customers determine when the network is the root cause of an issue.
We compete on the basis of a number of factors, including: • ability to provide unified, real-time observability of IT environments; • ability to operate in dynamic and elastic environments; • extensibility across the enterprise, including development, operations and business users; • propensity to enable collaboration between development, operations and business users; • ability to monitor any combination of public clouds, private clouds, on-premise and multi-cloud hybrids; • ability to provide advanced analytics and machine learning; • ease of deployment, implementation and use; • breadth of offering and key technology integrations; • performance, security, scalability and reliability; • quality of service and customer satisfaction; • total cost of ownership; and • brand recognition and reputation.
We compete on the basis of a number of factors, including: • ability to provide unified, real-time observability of IT environments; • ability to operate in dynamic and elastic environments; • extensibility across the enterprise, including development, operations and business users; • propensity to enable collaboration between development, operations and business users; • ability to monitor any combination of public clouds, private clouds, on-premise and multi-cloud hybrids; • ability to provide advanced analytics and machine learning; • ease of deployment, implementation and use; 11 • breadth of offering and key technology integrations; • performance, security, scalability and reliability; • quality of service and customer satisfaction; • total cost of ownership; and • brand recognition and reputation.
Sensitive Data Scanner helps businesses meet compliance goals by discovering, classifying, and redacting sensitive data, in real-time and at scale. Datadog scans for patterns of sensitive data upon ingestion and then hashes or redacts it, following built-in or user-defined rules to support compliance with GDPR, HIPAA, CCPA, and more. • CI Visibility.
Sensitive Data Scanner helps businesses meet compliance goals by discovering, classifying, and redacting sensitive data, in real-time and at scale. Datadog scans for patterns of sensitive data upon ingestion and then hashes or redacts it, following built-in or user-defined rules to support compliance with GDPR, HIPAA, CCPA, and more. 10 • CI Visibility.
All infrastructure data is located in one repository with automatic correlation, regardless of environment size or rate of change, to provide a fulsome view of everything that is occurring across the IT ecosystem. 8 • Application Performance Monitoring (APM). APM provides full visibility into the health and functioning of applications regardless of the deployment environment.
All infrastructure data is located in one repository with automatic correlation, regardless of environment size or rate of change, to provide a fulsome view of everything that is occurring across the IT ecosystem. • Application Performance Monitoring (APM). APM provides full visibility into the health and functioning of applications regardless of the deployment environment.
We were the first to combine the “three pillars of observability” - metrics, traces, and logs - into a single end-to-end platform with the introduction of our log management solution in 2018. Today, our platform combines infrastructure monitoring, application performance monitoring, log management, user experience monitoring, security monitoring, cloud service management, and developer-focused monitoring in one integrated data platform.
We were the first to combine the “three pillars of observability” - metrics, traces, and logs - into a single end-to-end platform with the introduction of our log management solution in 2018. Today, our platform combines infrastructure monitoring, application performance monitoring, log management, user experience monitoring, security monitoring, service management, and developer-focused monitoring in one integrated data platform.
From the moment of installation, our platform provides actionable insights through customizable dashboards, predictive analytics, automated correlations, visualizations and alerting. • High Accuracy Machine-Learning Capabilities and Predictive Capabilities Powered by the Network Effect . Our multi-tenant cloud platform analyzes massive data sets ingested across our customers and their IT environments.
From the moment of installation, our platform provides actionable insights through customizable dashboards, predictive analytics, automated correlations, visualizations and alerting. 8 • High Accuracy Machine-Learning Capabilities and Predictive Capabilities Powered by the Network Effect . Our multi-tenant cloud platform analyzes massive data sets ingested across our customers and their IT environments.
Our platform is modular and includes infrastructure monitoring, application performance monitoring, log management, user experience monitoring, network performance monitoring, cloud and application security, developer-focused observability, and cloud service management, as well as a range of shared features such as sophisticated dashboards, advanced analytics, collaboration tools, workflow automation, and alerting capabilities.
Our platform is modular and includes infrastructure monitoring, application performance monitoring, log management, user experience monitoring, network performance monitoring, cloud and application security, developer-focused observability, service management, and product analytics, as well as a range of shared features such as sophisticated dashboards, advanced analytics, collaboration tools, workflow automation, and alerting capabilities.
Our Solution and Key Strengths Datadog was founded on the premise that the old model of siloed developers and IT operations engineers is broken, and that legacy tools used for monitoring static on-premise architectures do not work in modern cloud or hybrid environments.
Our Solution and Key Strengths 5 Datadog was founded on the premise that the old model of siloed developers and IT operations engineers is broken, and that legacy tools used for monitoring static on-premise architectures do not work in modern cloud or hybrid environments.
The information contained on the websites referenced in this Annual Report on Form 10-K is not incorporated by reference into this filing. Further, our references to website URLs are intended to be inactive textual references only. 12
The information contained on the websites referenced in this Annual Report on Form 10-K is not incorporated by reference into this filing. Further, our references to website URLs are intended to be inactive textual references only.
Our Platform 7 Our proprietary platform provides real-time insights into software applications and IT infrastructure performance to enable better user experiences, faster problem detection and resolution and smarter, more impactful business decisions.
Our Platform Our proprietary platform provides real-time insights into software applications and IT infrastructure performance to enable better user experiences, faster problem detection and resolution and smarter, more impactful business decisions.
Datadog is designed to be cloud agnostic and easy to deploy, with hundreds of out-of-the-box integrations, a built-in understanding of modern technology stacks, and extensive customizations. Customers can deploy our platform across their entire infrastructure, making it ubiquitous and a daily part of the lives of developers, operations engineers, security professionals, and business leaders.
Datadog is designed to be cloud agnostic and easy to deploy, with hundreds of out-of-the-box integrations, a built-in understanding of modern technology stacks, and extensive customizations. Customers can deploy our platform across their entire infrastructure, making it ubiquitous and a daily part of the lives of developers, operations engineers, security professionals, product designers, and business leaders.
With our founding goal of breaking down silos between Dev and Ops, we set out in 2010 to build a real-time data integration platform to turn chaos of having uncorrelated data from disparate sources into digestible and actionable insights.
With our founding goal of breaking down silos between Dev and Ops, we set out in 2010 to build a real-time data integration platform to turn the chaos of uncorrelated data from disparate sources into digestible and actionable insights.
Our platform is supported by more than 850 integrations to seamlessly aggregate metrics and events across all of the systems and services that power digital businesses. Our easy-to-use platform is deployed through a self-service installation process. Users can derive value from our platform within minutes without any specialized training or heavy implementation or customization.
Our platform is supported by more than 1,000 integrations to seamlessly aggregate metrics and events across all of the systems and services that power digital businesses. Our easy-to-use platform is deployed through a self-service installation process. Users can derive value from our platform within minutes without any specialized training or heavy implementation or customization.
It uses machine learning to predict and identify sources of performance or availability issues that customers share due to dependencies on common service providers or third-party services. • 850+ Fully Supported Integrations . We offer more than 850 out-of-the-box integrations including public cloud, private cloud, on-premise hardware, databases and third-party software. • Automated Alerts .
It uses machine learning to predict and identify sources of performance or availability issues that customers share due to dependencies on common service providers or third-party services. • 1,000+ Fully Supported Integrations . We offer more than 1,000 out-of-the-box integrations including public cloud, private cloud, on-premise hardware, databases and third-party software. • Automated Alerts .
Item 1. Business Overview Datadog is the observability and security platform for cloud applications. 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.
Item 1. Business Overview Datadog is the AI-powered observability and security platform for cloud applications. 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.
Our proprietary platform combines the power of metrics, traces, logs, user sessions, security signals, and other data from a single agent and over 850 integrations to provide a unified view of infrastructure, application performance and the real-time events impacting performance.
Our proprietary platform combines the power of metrics, traces, logs, user sessions, security signals, and other data from a single agent and over 1,000 integrations to provide a unified view of infrastructure, application performance and the real-time events impacting performance.
Approximately 41% of our full-time employees as of that date were located outside of the United States, 35% of whom were located in France. In countries in which we operate, such as France, we are subject to, and comply with, local labor law requirements, which may automatically make our employees subject to industry-wide collective bargaining agreements.
Approximately 44% of our full-time employees as of that date were located outside of the United States, 34% of whom were located in France. In countries in which we operate, such as France, we are subject to, and comply with, local labor law requirements, which may automatically make our employees subject to industry-wide collective bargaining agreements.
We have over 850 out-of-the-box integrations with technologies to provide significant value to our customers without the need for professional services. Our integrations provide for comprehensive data point aggregation and consistent, up-to-date, high-quality customer experiences across heterogeneous IT environments as they are fully maintained by Datadog. • Powered by robust machine-learning and artificial intelligence .
We have over 1,000 out-of-the-box integrations with technologies to provide significant value to our customers without the need for professional services. Our integrations provide for comprehensive data point aggregation and consistent, up-to-date, high-quality customer experiences across heterogeneous IT environments as they are fully maintained by Datadog. 6 • Powered by robust artificial intelligence and machine learning capabilities .
Our platform empowers customers to better understand the operational needs of their applications and IT environments, enabling greater efficiency in resource allocation and spend on cloud infrastructure. Our Growth Strategies We intend to pursue the following growth strategies: • Expand our customer base by acquiring new customers . Our market penetration is low.
Our platform empowers customers to better understand the operational needs of their applications and IT environments, enabling greater efficiency in resource allocation and spend on cloud infrastructure. Our Growth Strategies We intend to pursue the following growth strategies: • Expand our customer base by acquiring new customers .
Logging Without Limits ® decouples the cost of log ingestion from processing, allowing customers to cost effectively collect a massive volume of logs and selectively process those they need to monitor. Flex Logs decouples storage from query, so customers can adjust their retention and querying capacity independently and serve more use cases within the Datadog platform. • Digital Experience Monitoring.
Logging Without Limits ® decouples the cost of log ingestion from processing, allowing customers to cost effectively collect a massive volume of logs and selectively process those they need to monitor. Flex Logs decouples storage from query, so customers can adjust their retention and querying capacity independently and serve more use cases within the Datadog platform. • Observability Pipelines.
For example, in 2017 we launched APM; in 2018 we launched Log Management; in 2019 we launched Digital Experience Monitoring and Network Performance Monitoring; in 2020 we launched Cloud SIEM, Continuous Profiler and Incident Management; in 2021 we launched Cloud Security Posture Management, Cloud Workload Security, Database Monitoring, and Sensitive Data Scanner; in 2022 we launched Application Security Management, Cloud Security Management, Audit Trail, Observability Pipelines, Cloud Cost Management, and Universal Service Monitoring; in 2023 we launched Application Vulnerability Management, Data Streams Monitoring, and Workflow Automation; and in 2024 we launched Event Management and LLM Observability. • Expand our customer base internationally .
For example, in 2017 we launched APM; in 2018 we launched Log Management; in 2019 we launched Digital Experience Monitoring and Network Performance Monitoring; in 2020 we launched Cloud SIEM, Continuous Profiler and Incident Management; in 2021 we launched Cloud Security Posture Management, Cloud Workload Security, Database Monitoring, and Sensitive Data Scanner; in 2022 we launched Application Security Management, Cloud Security Management, Audit Trail, Observability Pipelines, Cloud Cost Management, and Universal Service Monitoring; in 2023 we launched Application Vulnerability Management, Data Streams Monitoring, and Workflow Automation; in 2024 we launched Event Management and LLM Observability; and in 2025 we launched OnCall, Product Analytics, and Bits AI SRE. • Expand our customer base internationally .
Our base of approximately 30,000 customers as of December 31, 2024 represents a significant opportunity for further sales expansion. We plan to continue to increase sales within our existing customer base through increased usage of our platform and the cross selling of additional products. • Expand our technology leadership through continued investment and new products .
Our base of approximately 32,700 customers as of December 31, 2025 represents a significant opportunity for further sales expansion. We plan to continue to increase sales within our existing customer base through increased usage of our platform and the cross selling of additional products. 7 • Expand our technology leadership through continued investment and new products .
Furthermore, we expect that our industry will continue to attract new companies, including smaller emerging companies, which could introduce new offerings. We may also expand into new markets and encounter additional competitors in such markets. 11 Human Capital Management As of December 31, 2024, we had approximately 6,500 employees operating across 33 countries.
Furthermore, we expect that our industry will continue to attract new companies, including smaller emerging companies, which could introduce new offerings. We may also expand into new markets and encounter additional competitors in such markets. Human Capital Management As of December 31, 2025, we had approximately 8,100 employees operating across 35 countries.
Our API libraries and agent used by customers to send data to our proprietary platform are licensed by us on an open source basis. As of December 31, 2024, we own forty-two patents globally, nine patent applications pending for examination in the United States, three pending PCT applications, and four pending foreign patent applications.
Our API libraries and agent used by customers to send data to our proprietary platform are licensed by us on an open source basis. As of December 31, 2025, we own 43 patents globally, 18 patent applications pending for examination in the United States, 3 pending PCT applications, and 3 pending foreign patent applications.
The pending U.S. patent applications, if issued, would be scheduled to expire between 2039 and 2043. Despite our pending patent applications, there can be no assurance that our patent applications will result in issued patents. As of December 31, 2024, we own nine registered trademarks in the United States and one hundred twenty-four registered trademarks in various non-U.S. jurisdictions.
The pending U.S. patent applications, if issued, would be scheduled to expire between 2043 and 2045. Despite our pending patent applications, there can be no assurance that our patent applications will result in issued patents. As of December 31, 2025, we own 11 registered trademarks in the United States and 127 registered trademarks in various non-U.S. jurisdictions.
Although we rely on intellectual property rights, including patents, copyrights, trademarks and trade secrets, as well as contractual protections to establish and protect our proprietary rights, we believe that factors such as the technological and creative skills of our personnel, creation of new services, features and functionality, and frequent enhancements to our proprietary platform are more essential to establishing and maintaining our technology leadership position.
Although we rely on intellectual property rights, including patents, copyrights, trademarks and trade secrets, as well as contractual protections to establish and protect our proprietary rights, we believe that factors such as the technological and creative skills of our personnel, creation of new services, features and functionality, and frequent enhancements to our proprietary platform are more essential to establishing and maintaining our technology leadership position. 12 We control access to and use of our proprietary technology and other confidential information through the use of internal and external controls, including contractual protections with employees, contractors, customers and partners.
Datadog’s cloud-native platform enables development and operations teams to collaborate, quickly build and improve applications, and drive business performance. Empowered by our out-of-the box functionality and simple, self-service installation, our customers are able to rapidly deploy our platform to provide application- and infrastructure-wide visibility, often within minutes. 5 • Built for dynamic cloud and hybrid infrastructures .
Empowered by our out-of-the box functionality and simple, self-service installation, our customers are able to rapidly deploy our platform to provide application- and infrastructure-wide visibility, often within minutes. • Built for dynamic cloud and hybrid infrastructures .
Cloud Cost Management provides granular visibility into costs across cloud resources, automatically surfacing changes in cloud costs and visualizing cost data alongside metrics, traces, logs, and other data, and making it easy to find and fix cost inefficiencies. 9 • Cloud Security Management.
Cloud Cost Management provides granular visibility into costs across cloud resources, automatically surfacing changes in cloud costs and visualizing cost data alongside metrics, traces, logs, and other data, and making it easy to find and fix cost inefficiencies. • Cloud Security. Cloud Security uses agentless technology to scan customers' infrastructure to identify vulnerabilities, misconfigurations, identity risks, and compliance violations.
LLM Observability seamlessly correlates LLM traces with APM and utilizes cluster visualization to identify drifts, enabling users to swiftly resolve issues and scale AI applications in production, while improving accuracy and reducing privacy risks. • Event Management.
LLM Observability seamlessly correlates LLM traces with APM and utilizes cluster visualization to identify drifts, enabling users to swiftly resolve issues and scale AI applications in production, while improving accuracy and reducing privacy risks. • Error Tracking. Error Tracking reduces noise by intelligently grouping errors into issues across frontend and backend applications.
As of December 31, 2024, we had approximately 3,000 employees in our sales and marketing organization, including sales development, field sales, sales engineering, technical solutions, business development, sales operations, sales strategy, customer success and marketing personnel.
As of December 31, 2025, we had approximately 3,600 employees in our sales and marketing organization, including sales development, field sales, sales engineering, technical solutions, business development, sales operations, sales strategy, customer success and marketing personnel. We intend to continue to invest in our sales and marketing capabilities to capitalize on our market opportunity.
Our platform's Watchdog capabilities feature artificial intelligence and machine learning that can cross-correlate metrics, traces, logs, sessions, security signals, and other data to identify outliers and notify users of potential anomalies; discover and help resolve issues quickly with automated root cause analysis; augment the troubleshooting workflow with contextual insights; and minimize impact on customers. • Scalable .
Our platform features an increasingly broad and deep set of artificial intelligence and machine learning capabilities that can cross-correlate metrics, traces, logs, sessions, security signals, and other data to identify outliers and notify users of potential anomalies; discover and help resolve issues quickly with automated root cause analysis; augment the troubleshooting workflow with contextual insights; and recommend and implement incident resolution actions; all with the goal of improving business outcomes. • Scalable .
Software applications are transforming how organizations engage with customers and operate their businesses. Companies across all industries are re-platforming their businesses to cloud native or hybrid on-premise and cloud infrastructures to enable this digital transformation. Historically, engineering teams have been siloed, making the development of next generation applications in dynamic cloud environments challenging.
Software applications are transforming how organizations engage with customers and operate their businesses. Companies across all industries are re-platforming their businesses to cloud native or hybrid on-premise and cloud infrastructures to enable this digital transformation. And they are increasingly adopting AI capabilities as part of this transformation.
Our Competition The worldwide monitoring and analytics market is and has been highly competitive for decades and is rapidly evolving.
We intend to continue to invest in our research and development capabilities to extend our platform and products. Our Competition The worldwide monitoring and analytics market is and has been highly competitive for decades and is rapidly evolving.
Our SaaS platform is delivered through the cloud. Our platform is massively scalable, currently monitoring trillions of events per hour and millions of servers and containers at any point in time.
Our SaaS platform is delivered through the cloud. Our platform is massively scalable, currently monitoring trillions of events per hour and millions of servers and containers at any point in time. We offer secure, easily accessible data retention at full granularity for extensive periods of time, which can provide customers with a complete view of their historical data.
We intend to continue to invest in our sales and marketing capabilities to capitalize on our market opportunity. 10 Research and Development Our research and development organization is responsible for the design, development, testing and delivery of new technologies, features and integrations of our platform, as well as the continued improvement and iteration of our existing products.
Research and Development Our research and development organization is responsible for the design, development, testing and delivery of new technologies, features and integrations of our platform, as well as the continued improvement and iteration of our existing products. It is also responsible for operating and scaling our platform including the underlying cloud infrastructure.
And while we continue to broaden our capabilities in observability, we have expanded our platform into use cases beyond observability, including cloud security, software delivery, and cloud service management.
Since then, we have continuously pushed to unify separate tools into an integrated monitoring and analytics platform, readily available to everyone who cares about applications and their impact on business. And while we continue to broaden our capabilities in observability, we have expanded our platform into use cases beyond observability, including cloud security, software delivery, and service management.
Our research and development team consists of our software engineering, product management, development and site reliability engineering teams. As of December 31, 2024, we had approximately 3,100 employees in our research and development organization. We intend to continue to invest in our research and development capabilities to extend our platform and products.
Research and development employees are located primarily in our New York and Paris offices, as well as remotely distributed. Our research and development team consists of our software engineering, product management, development and site reliability engineering teams. As of December 31, 2025, we had approximately 3,900 employees in our research and development organization.
Test Visibility auto-instruments every test service to help developers detect and resolve slow, failing, and flaky tests. • LLM Observability. LLM, or Large Language Model, Observability provides end-to-end tracing of LLM chains with visibility into input-output, errors, token usage, and latency at each step.
DJM helps data platform teams and data engineers detect, remediate, and optimize problematic Spark and Databricks jobs. 9 • LLM Observability. LLM, or Large Language Model, Observability provides end-to-end tracing of LLM chains with visibility into input-output, errors, token usage, and latency at each step.
We believe that our platform currently addresses a significant portion of the IT Operations Management market. According to Gartner, the IT Operations Management market represents a $81 billion opportunity in 2028.
Our platform currently addresses the IT Operations Management market. According to Gartner, the IT Operations Management market represents a $82 billion opportunity in 2029. Within the IT Operations Management market, the Gartner Health and Performance Analytics (Observability) market represents a $39 billion opportunity in 2029.
As of December 31, 2024, we had approximately 30,000 customers in over 150 countries. Our platform provides the following key benefits to our customers: • Accelerate digital transformation .
Key Benefits to Our Customers Organizations of all sizes, in all industries, both private and public, purchase our products for a variety of use cases. As of December 31, 2025, we had approximately 32,700 customers in over 160 countries. Our platform provides the following key benefits to our customers: • Accelerate digital transformation .
RUM provides analysis and visualization of the performance of web browser and mobile applications as experienced by all actual users. Session Replay captures and visually replays users' web browser and mobile application experiences to help identify errors, application usage patterns, and design issues. • Continuous Profiler .
RUM provides analysis and visualization of the performance of web browser and mobile applications as experienced by actual users. • Product Analytics.
Digital Experience Monitoring brings visibility up the stack to monitor the digital experience of the user and consists of Synthetics, Real User Monitoring (RUM), and Session Replay. Synthetics provides user-experience monitoring of applications and API endpoints via simulated AI-powered user requests to proactively track application performance and ensure uptime.
Observability Pipelines enables IT and security teams to cost-effectively collect, transform, and route logs, metrics, and traces from any source to any destination at scale. • Synthetics. Synthetics provides user-experience monitoring of applications and API endpoints via simulated AI-powered user requests to proactively track application performance and ensure uptime. • Real User Monitoring (RUM).
Our platform ingests massive amounts of data into our unified data warehouse. We develop actionable insights using our advanced analytics capabilities.
Our platform ingests massive amounts of data, which we correlate and analyze for actionable insights.
Event Management uses AIOps to intelligently aggregate and consolidate alerts into one consistent view to help centralized operations teams discover and resolve issues faster. Event Management helps teams paint a complete picture of incidents and their underlying causes by reducing noise and enriching events with observability context.
Event Management helps teams paint a complete picture of incidents and their underlying causes by reducing noise and enriching events with observability context. • Bits AI SRE. Bits AI SRE is an always-on, AI-enabled SRE agent built to handle complex troubleshooting.
We started Datadog to break this model and facilitate collaboration among development and operations teams, enabling the adoption of DevOps practices. Since then, we have continuously pushed to unify separate tools into an integrated monitoring and analytics platform, readily available to everyone who cares about applications and their impact on business.
Historically, engineering teams and data have been siloed, making the development of next generation applications in dynamic cloud environments challenging. We started Datadog to break this model and facilitate collaboration among development and operations teams, enabling the adoption of DevOps practices.
Incident Management allows users to declare incidents, investigate root cause and dependencies, collaborate around a shared view of the incident, follow to resolution, and auto-generate post-mortem documentations, all within the Datadog platform. • Workflow Automation. Workflow Automation enables customers to easily automate and orchestrate processes across their tech stacks, with hundreds of out-of-the-box actions and dozens of customizable blueprints.
By integrating real-time observability data into the incident response plan, it enables smarter, faster decision making and saves critical remediation time. • Workflow Automation and App Builder. Workflow Automation enables customers to easily automate and orchestrate processes across their tech stacks, with hundreds of out-of-the-box actions and dozens of customizable blueprints.
Removed
In 2024, we launched Event Management to aggregate and consolidate alerts to accelerate remediation, and LLM Observability to help customers investigate how they can safely deploy and manage their models in production.
Added
In 2025, we launched OnCall to create on-call schedules and integrate real-time observability data into customers' incident response plans, Product Analytics to improve business outcomes and product development decisions with quantitative insights into user experiences and behavior, and Bits AI SRE Agent to autonomously investigate alerts, surface root causes, and draft summaries about incidents.
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We believe a large portion of this spend is for legacy on-premise and private cloud environments but does not fully include the opportunity in modern multi-cloud and hybrid cloud environments. Our platform is designed to address both legacy and modern environments.
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Beyond Gartner’s IT Operations Management market, we have also been expanding our platform and product suite into certain segments of Gartner’s Security Software, Application Development, and Analytic Platforms markets. We believe the markets we participate in across Gartner’s IT Operations Management, Security Software, Application Development, and Analytic Platforms market in total represent a $187 billion market opportunity in 2029.
Removed
We offer secure, easily accessible data retention at full granularity for extensive periods of time, which can provide customers with a complete view of their historical data. 6 Key Benefits to Our Customers Organizations of all sizes, in all industries, both private and public, purchase our products for a variety of use cases.
Added
Datadog’s cloud-native platform enables development and operations teams to collaborate, quickly build and improve applications, and drive business performance. In recent years, as the platform has expanded to more use cases, Datadog has additionally enabled security teams, data engineers, product designers, developers, and business users to collaborate and improve outcomes.
Removed
DJM helps data platform teams and data engineers detect, remediate, and optimize problematic Spark and Databricks jobs, • Universal Service Monitoring. Universal Service Monitoring automatically detects all microservices across an organization's environment and provides instant visibility into their health and dependencies—all without any code changes. • Network Monitoring.
Added
Product Analytics provides engineering leaders, product owners, and product managers a complete picture of product, user, and performance data across applications, helping users to take action to improve business outcomes related to higher monthly active users, conversions, or average order value. • Continuous Profiler .
Removed
Error Tracking reduces noise by intelligently grouping errors into issues across frontend and backend applications. By providing rich debug context, down to lines of code, Error Tracking helps users identify root problems, accelerating incident resolution. • Incident Management.
Added
Network Device Monitoring seamlessly consolidates monitoring and troubleshooting of network hardware, such as routers, firewalls, switches, load balancers, and other network devices. • Incident Response. Incident Response unifies monitoring, paging, and incident management into one seamless workflow.
Removed
Workflow Automation enables automated actions based on observability insights for faster incident remediation, proactive prevention, and improved security. • Observability Pipelines. Observability Pipelines enables IT and security teams to cost-effectively collect, transform, and route logs, metrics, and traces from any source to any destination at scale. • Cloud Cost Management.
Added
App Builder provides a low-code solution to rapidly develop and integrate secure customized applications to accelerate remediation at scale. • Event Management. Event Management uses AI and machine learning technologies to intelligently aggregate and consolidate alerts into one consistent view to help centralized operations teams discover and resolve issues faster.
Removed
Cloud Security Management delivers vulnerability management, automated compliance checks, continuous posture management, real-time threat detection, identity risk assessments, and a comprehensive resource inventory across the entire cloud infrastructure, all in a unified platform for seamless collaboration and faster remediation.
Added
Powered by Datadog's vast dataset and developed against thousands of real-world incidents, Bits AI SRE pinpoints root causes quickly, helping teams confidently restore services faster. • Cloud Cost Management.
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With a unified platform and real-time observability context, DevOps and security teams can quickly remediate issues and continuously improve their organization's security posture. • Application Security Management. Application Security Management (ASM) delivers continuous, real-time visibility into attacks that target customers' web applications, serverless applications, and APIs.
Added
Tightly integrated in the Datadog unified platform, Cloud Security allows users to detect, prioritize, and fix security issues faster and more effectively improve their organization's security posture. • Code Security . Code Security delivers runtime-based prioritization of vulnerabilities with a platform approach to remediation, and clear visibility into remediation progress across the software development life cycle.
Removed
ASM is automatically integrated with APM distributed traces and code-level context, empowering Dev, Ops, and security teams to build and run secure applications in production. Application Vulnerability Management continuously monitors customers' production environments for both code-level and open-source vulnerabilities. • Cloud SIEM.
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Code Security capabilities include securing code in development, including first-party code as well as third-party, open-source code and securing code at runtime. • Cloud SIEM.
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Cloud SIEM (Security Information and Event Management) allows customers to detect threats in real time and investigate security signals across metrics, traces, logs, and other data. It provides the engineering organization, including Dev, Ops, and security teams, visibility into common data sources, in order to better operationalize IT security. • Sensitive Data Scanner.
Added
Cloud SIEM (Security Information and Event Management) allows customers to detect and investigate threats across dynamic, cloud-scale environments, and cost-effectively store and analyze operational and security logs in real-time, while using out-of-the-box integrations and detection rules to automatically surface threats and visually investigate them. • Threat Management.
Removed
It is also responsible for operating and scaling our platform including the underlying cloud infrastructure. Our research and development investments seek to drive core technology innovation and bring new products to market. Research and development employees are located primarily in our New York and Paris offices, as well as remotely distributed.
Added
Threat Management includes detecting threats in infrastructure with Workload Protection, and detecting threats in applications with App & API Protection. Workload Protection performs deep, in-kernel analysis of workload activity across hosts and containers to uncover threats. App & API Protection helps teams secure APIs with unified visibility, posture management, and runtime protection. • Sensitive Data Scanner.
Removed
We control access to and use of our proprietary technology and other confidential information through the use of internal and external controls, including contractual protections with employees, contractors, customers and partners.
Added
Test Visibility auto-instruments every test service to help developers detect and resolve slow, failing, and flaky tests.
Added
Our research and development investments seek to drive core technology innovation and bring new products to market. This includes our focus on AI-driven innovation: we have created an AI Research Lab to develop novel solutions, and engineers across our research and development organization are tasked with using AI and developing AI capabilities within their platform and product areas.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

104 edited+14 added−10 removed324 unchanged
Biggest changeWe are required, pursuant to Section 404 of the Sarbanes-Oxley Act, to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting on an annual basis. This assessment must include disclosure of any material weaknesses identified by our management in our internal control over financial reporting.
Biggest changeWe are obligated to develop and maintain proper and effective internal controls over financial reporting, and any failure to maintain the adequacy of these internal controls may adversely affect investor confidence in our company and, as a result, the value of our Class A common stock. 39 We are required, pursuant to Section 404 of the Sarbanes-Oxley Act, to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting on an annual basis.
We compete on the basis of a number of factors, including: • ability to provide unified, real-time observability of IT environments; • ability to operate in dynamic and elastic environments; 23 • extensibility across the enterprise, including development, operations and business users; • propensity to enable collaboration between development, operations and business users; • ability to monitor any combination of public clouds, private clouds, on-premise and multi-cloud hybrids; • ability to provide advanced analytics and machine learning; • ease of deployment, implementation and use; • ability to operate across a broad range of geographies in compliance with local regulations; • breadth of offering and key technology integrations; • performance, security, scalability and reliability; • quality of service and customer satisfaction; • total cost of ownership; and • brand recognition and reputation.
We compete on the basis of a number of factors, including: • ability to provide unified, real-time observability of IT environments; • ability to operate in dynamic and elastic environments; • extensibility across the enterprise, including development, operations and business users; • propensity to enable collaboration between development, operations and business users; • ability to monitor any combination of public clouds, private clouds, on-premise and multi-cloud hybrids; • ability to provide advanced analytics and machine learning; • ease of deployment, implementation and use; • ability to operate across a broad range of geographies in compliance with local regulations; • breadth of offering and key technology integrations; • performance, security, scalability and reliability; • quality of service and customer satisfaction; • total cost of ownership; and • brand recognition and reputation.
In addition, we expect to continue to expend substantial financial and other resources on: • our technology infrastructure, including systems architecture, scalability, availability, performance and security; • our sales and marketing organization to engage our existing and prospective customers, increase brand awareness and drive adoption of our products; • product development, including investments in our product development team and the development of new products and new functionality for our platform as well as investments in further optimizing our existing products and infrastructure; • acquisitions or strategic investments; • international expansion; and • general administration.
In addition, we expect to continue to expend substantial financial and other resources on: 14 • our technology infrastructure, including systems architecture, scalability, availability, performance and security; • our sales and marketing organization to engage our existing and prospective customers, increase brand awareness and drive adoption of our products; • product development, including investments in our product development team and the development of new products and new functionality for our platform as well as investments in further optimizing our existing products and infrastructure; • acquisitions or strategic investments; • international expansion; and • general administration.
The CCPA provides a private right of action and statutory damages for data breaches and may increase our compliance costs and potential liability with respect to other personal information we collect about California residents. In addition, the amendments to the CCPA made by the California Privacy Rights Act, or the CPRA, went into effect on January 1, 2023.
The CCPA provides a private right of action and statutory damages for certain data breaches and may increase our compliance costs and potential liability with respect to other personal information we collect about California residents. In addition, the amendments to the CCPA made by the California Privacy Rights Act, or the CPRA, went into effect on January 1, 2023.
As a result of these and other factors, we may be unable to attract new customers, which may have an adverse effect on our business, financial condition and results of operations. Failure to effectively develop and expand our sales and marketing capabilities could harm our ability to increase our customer base and achieve broader market acceptance of our products.
As a result of these and other factors, we may be unable to attract new customers, which may have an adverse effect on our business, financial condition and results of operations. 16 Failure to effectively develop and expand our sales and marketing capabilities could harm our ability to increase our customer base and achieve broader market acceptance of our products.
If we 33 fail to comply with these licenses, we may be subject to certain requirements, including requirements that we offer our solutions that incorporate the open source software for no cost, that we make available source code for modifications or derivative works we create based upon, incorporating or using the open source software and that we license such modifications or derivative works under the terms of applicable open source licenses.
If we fail to comply with these licenses, we may be subject to certain requirements, including requirements that we offer our solutions that incorporate the open source software for no cost, that we make available source code for modifications or derivative works we create based upon, incorporating or using the open source software and that we license such modifications or derivative works under the terms of applicable open source licenses.
Similarly, our subscription sales could be adversely affected if customers or users within these organizations perceive that features incorporated into competitive products reduce the need for our products or if they prefer to purchase other products that are bundled with solutions offered by other companies that operate in adjacent markets and compete with our 15 products.
Similarly, our subscription sales could be adversely affected if customers or users within these organizations perceive that features incorporated into competitive products reduce the need for our products or if they prefer to purchase other products that are bundled with solutions offered by other companies that operate in adjacent markets and compete with our products.
In addition, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which generally, subject to certain exceptions, prohibits a 38 Delaware corporation from engaging in any of a broad range of business combinations with any “interested” stockholder for a period of three years following the date on which the stockholder became an “interested” stockholder.
In addition, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which generally, subject to certain exceptions, prohibits a Delaware corporation from engaging in any of a broad range of business combinations with any “interested” stockholder for a period of three years following the date on which the stockholder became an “interested” stockholder.
The capped call transactions are generally expected to reduce the potential dilution to our Class A common stock upon any conversion of the Notes and/or offset any cash payments we are required to make in excess of the principal amount of converted Notes, as the case may be, with such reduction and/or offset subject to a cap.
The capped call transactions are generally expected to reduce the potential dilution to our Class A common stock upon any conversion of the 2029 Notes and/or offset any cash payments we are required to make in excess of the principal amount of converted 2029 Notes, as the case may be, with such reduction and/or offset subject to a cap.
Many of the companies with which we compete for experienced personnel have greater resources than we have. If we hire employees from competitors or other companies, their former employers may attempt to assert that these employees or we have breached their legal obligations, resulting in a diversion of our time and 21 resources.
Many of the companies with which we compete for experienced personnel have greater resources than we have. If we hire employees from competitors or other companies, their former employers may attempt to assert that these employees or we have breached their legal obligations, resulting in a diversion of our time and resources.
We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, as described in Note 2 in the Notes to Consolidated Financial Statements included in “Part II, Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.
We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, as described in Note 2 in the Notes to Consolidated Financial Statements included in “Part II, Item 8. Financial Statements and Supplementary Data” of our Annual Report on Form 10-K.
Additionally, from time to time employees or service providers may inadvertently misconfigure resources or misdirect certain communications, leading to security vulnerabilities or incidents that we must then expend effort and incur expenses to correct. We may have contractual and other legal obligations, or we may voluntarily choose, to notify relevant stakeholders of security incidents.
Additionally, from time to time employees or service providers may inadvertently misconfigure resources or misdirect certain communications, leading to security vulnerabilities or incidents that we must then expend effort and incur expenses to correct. 18 We may have contractual and other legal obligations, or we may voluntarily choose, to notify relevant stakeholders of security incidents.
Interruptions or performance problems associated with our products and platform capabilities may adversely affect our business, financial condition and results of operations. Our continued growth depends in part on the ability of our existing and potential customers to access our products and platform capabilities at any time and within an acceptable amount of time.
Interruptions or performance problems associated with our products and platform capabilities may adversely affect our business, financial condition and results of operations. 19 Our continued growth depends in part on the ability of our existing and potential customers to access our products and platform capabilities at any time and within an acceptable amount of time.
Our competitors may more successfully incorporate AI into their products and achieve higher market acceptance of their AI solutions, which could impair our ability to compete effectively and adversely affect our results of operations. 24 We may also encounter new risks, challenges, and unintended consequences as a result of our use of AI.
Our competitors may more successfully incorporate AI into their products and achieve higher market acceptance of their AI solutions, which could impair our ability to compete effectively and adversely affect our results of operations. We may also encounter new risks, challenges, and unintended consequences as a result of our use of AI.
The regulatory framework for and users' expectations around privacy and security issues worldwide is rapidly evolving and as a result, implementation standards and enforcement practices 25 are likely to remain uncertain for the foreseeable future resulting in possible significant operational costs for compliance and risk to our business.
The regulatory framework for and users' expectations around privacy and security issues worldwide is rapidly evolving and as a result, implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future resulting in possible significant operational costs for compliance and risk to our business.
While we utilize a data center in the EEA to maintain certain customer data (which may include personal information) 26 originating from the EEA, we may find it necessary to establish additional systems and processes to maintain such data in the EEA, which may involve substantial expense and distraction from other aspects of our business.
While we utilize a data center in the EEA to maintain certain customer data (which may include personal information) originating from the EEA, we may find it necessary to establish additional systems and processes to maintain such data in the EEA, which may involve substantial expense and distraction from other aspects of our business.
If our quarterly results of operations fall below the expectations of investors and securities 20 analysts who follow our stock, the price of our Class A common stock could decline substantially, and we could face costly lawsuits, including securities class action suits. Seasonality may cause fluctuations in our sales and results of operations.
If our quarterly results of operations fall below the expectations of investors and securities analysts who follow our stock, the price of our Class A common stock could decline substantially, and we could face costly lawsuits, including securities class action suits. Seasonality may cause fluctuations in our sales and results of operations.
These agreements may be breached, and we may not have adequate remedies for any such breach. In order to protect our intellectual property rights, we may be required to spend significant resources to monitor and protect our intellectual property rights. Litigation may be necessary in the future to enforce our intellectual property rights and to protect our trade secrets.
These agreements may be breached, and we may not have adequate remedies for any such breach. 34 In order to protect our intellectual property rights, we may be required to spend significant resources to monitor and protect our intellectual property rights. Litigation may be necessary in the future to enforce our intellectual property rights and to protect our trade secrets.
We and the third-parties with whom we work are subject to stringent and changing laws, regulations, standards, and contractual obligations related to data privacy and security. Actual or perceived failure by us or the third-parties with whom we work providers to comply with such laws, regulations, standards, or contractual obligations could harm our business.
We and the third-parties with whom we work are subject to stringent and changing laws, regulations, standards, and contractual obligations related to data privacy and security. Actual or perceived failure by us or the third-parties with whom we work to comply with such laws, regulations, standards, or contractual obligations could harm our business.
We are subject to anti-corruption, anti-bribery, anti-money laundering, and similar laws, and non-compliance with such laws can subject us to criminal or civil liability and harm our business, financial condition and results of operations. 27 We are subject to the U.S.
We are subject to anti-corruption, anti-bribery, anti-money laundering, and similar laws, and non-compliance with such laws can subject us to criminal or civil liability and harm our business, financial condition and results of operations. We are subject to the U.S.
Further, our efforts to enforce our intellectual property rights may be met with defenses, counterclaims, and countersuits 32 attacking the validity and enforceability of our intellectual property rights, and if such defenses, counterclaims or countersuits are successful, we could lose valuable intellectual property rights.
Further, our efforts to enforce our intellectual property rights may be met with defenses, counterclaims, and countersuits attacking the validity and enforceability of our intellectual property rights, and if such defenses, counterclaims or countersuits are successful, we could lose valuable intellectual property rights.
We 17 could be required to fundamentally change our business activities and practices in response to a security breach or related regulatory actions or litigation, which could have an adverse effect on our business.
We could be required to fundamentally change our business activities and practices in response to a security breach or related regulatory actions or litigation, which could have an adverse effect on our business.
We use open source software in our products, which could negatively affect our ability to sell our services or subject us to litigation or other actions. We use open source software in our products and we expect to continue to incorporate open source software in our services in the future.
We use open source software in our products, which could negatively affect our ability to sell our services or subject us to litigation or other actions. 35 We use open source software in our products and we expect to continue to incorporate open source software in our services in the future.
Our results of operations may be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our results of operations to fall below the expectations of securities analysts and investors, resulting in a decline in the market price of our Class A common stock. 31 Risks Related to Intellectual Property Any failure to obtain, maintain, protect or enforce our intellectual property and proprietary rights could impair our ability to protect our proprietary technology and our brand.
Our results of operations may be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our results of operations to fall below the expectations of securities analysts and investors, resulting in a decline in the market price of our Class A common stock. 33 Risks Related to Intellectual Property Any failure to obtain, maintain, protect or enforce our intellectual property and proprietary rights could impair our ability to protect our proprietary technology and our brand.
If one or more holders elect to convert their Notes, unless we elect to satisfy our conversion obligation by delivering solely shares of our Class A common stock (other than paying cash in lieu of delivering any fractional share), we would be required to settle a portion or all of our conversion obligation through the payment of cash, 39 which could adversely affect our liquidity.
If one or more holders elect to convert their 2029 Notes, unless we elect to satisfy our conversion obligation by delivering solely shares of our Class A common stock (other than paying cash in lieu of delivering any fractional share), we would be required to settle a portion or all of our conversion obligation through the payment of cash, which could adversely affect our liquidity.
The conversion of shares of our Class B common stock into shares of our Class A common stock has had and will continue to have the effect, over time, of increasing the relative voting power of those holders of Class B common stock who retain their Class B shares. 36 In addition, certain index providers have in the past imposed restrictions on including companies with multiple class share structures in certain of their indexes.
The conversion of shares of our Class B common stock into shares of our Class A common stock has had and will continue to have the effect, over time, of increasing the relative voting power of those holders of Class B common stock who retain their Class B shares. 38 In addition, certain index providers have in the past imposed restrictions on including companies with multiple class share structures in certain of their indexes.
The market price of our Class A common stock may be highly volatile and may fluctuate or decline substantially as a result of a variety of factors, some of which are beyond our control, including: • actual or anticipated fluctuations in our financial condition or results of operations; • variance in our financial performance from expectations of securities analysts; • changes in the pricing of subscriptions to our products; • changes in our projected operating and financial results; • changes in laws or regulations applicable to our platform and products; • announcements by us or our competitors of significant business developments, acquisitions, or new offerings; • significant data breaches, disruptions to or other incidents involving our software; • our involvement in litigation; • future sales of our Class A common stock by us or our stockholders; • changes in senior management or key personnel; • the trading volume of our Class A common stock; • changes in the anticipated future size and growth rate of our market; and • general economic and market conditions.
The market price of our Class A common stock may be highly volatile and may fluctuate or decline substantially as a result of a variety of factors, some of which are beyond our control, including: • actual or anticipated fluctuations in our financial condition or results of operations; • variance in our financial performance from expectations of securities analysts or the financial guidance we provide to the public; • changes in the pricing of subscriptions to our products; • changes in our projected operating and financial results; • changes in laws or regulations applicable to our platform and products; • announcements by us or our competitors of significant business developments, acquisitions, or new offerings; • significant data breaches, disruptions to or other incidents involving our software; • our involvement in litigation; • future sales of our Class A common stock by us or our stockholders; • changes in senior management or key personnel; • the trading volume of our Class A common stock; • changes in the anticipated future size and growth rate of our market; and • general economic and market conditions.
Many state legislatures have adopted legislation that regulates how businesses operate online, including measures relating to privacy, data security and data breaches. Laws in all 50 states require businesses to provide notice to customers whose personal information has been disclosed as a result of a data breach.
Many state legislatures have adopted legislation that regulates how businesses operate online, including measures relating to privacy, data security and data breaches. Laws in all 50 states require businesses to provide notice to customers whose personal information has been disclosed as a result of certain data breaches.
Our current and future international business and operations involve a variety of risks, including: • slower than anticipated availability and adoption of cloud and hybrid IT infrastructures by international businesses; • changes in a specific country’s or region’s political or economic conditions; • the need to adapt and localize our products for specific countries; • greater difficulty collecting accounts receivable and longer payment cycles; • potential changes in trade relations, sanctions, regulations, or laws; • unexpected changes in laws, regulatory requirements, or tax laws; • more stringent regulations relating to privacy and data security and the unauthorized use of, or access to, commercial and personal information, particularly in Europe and the United Kingdom; • differing and potentially more onerous labor regulations, especially in Europe, where labor laws are generally more advantageous to employees as compared to the United States, including deemed hourly wage and overtime regulations in these locations; • challenges inherent in efficiently managing, and the increased costs associated with, an increased number of employees over large geographic distances, including the need to implement appropriate systems, policies, benefits, and compliance programs that are specific to each jurisdiction; 34 • potential changes in laws, regulations and costs affecting our U.K. operations and local employees due to Brexit; • difficulties in managing a business in new markets with diverse cultures, languages, customs, legal systems, alternative dispute systems, and regulatory systems; • increased travel, real estate, infrastructure, and legal compliance costs associated with international operations; • currency exchange rate fluctuations and the resulting effect on our revenue and expenses, and the cost and risk of entering into hedging transactions if we chose to do so in the future; • limitations on our ability to reinvest earnings from operations in one country to fund the capital needs of our operations in other countries; • laws and business practices favoring local competitors or general market preferences for local vendors; • limited or insufficient intellectual property protection or difficulties obtaining, maintaining, protecting or enforcing our intellectual property rights, including our trademarks and patents; • political instability, terrorist activities and military conflict, including the war in Ukraine and conflicts in the Middle East; • an outbreak of a contagious disease, which may cause us or our third-party providers and/or customers to temporarily suspend our or their respective operations in the affected city or country; • exposure to liabilities under anti-corruption and anti-money laundering laws, including the FCPA, U.S. bribery laws, the UK Bribery Act, and similar laws and regulations in other jurisdictions; and • adverse tax burdens and foreign exchange controls that could make it difficult to repatriate earnings and cash.
Our current and future international business and operations involve a variety of risks, including: • slower than anticipated availability and adoption of cloud and hybrid IT infrastructures by international businesses; • changes in a specific country’s or region’s political or economic conditions; • the need to adapt and localize our products for specific countries; • greater difficulty collecting accounts receivable and longer payment cycles; • potential changes in trade relations, sanctions, regulations, or laws including changes in trade policies, such as trade wars, tariffs or other trade restrictions or the threat of such actions; • unexpected changes in laws, regulatory requirements, or tax laws; • more stringent regulations relating to privacy and data security and the unauthorized use of, or access to, commercial and personal information, particularly in Europe and the United Kingdom; 36 • differing and potentially more onerous labor regulations, especially in Europe, where labor laws are generally more advantageous to employees as compared to the United States, including deemed hourly wage and overtime regulations in these locations; • challenges inherent in efficiently managing, and the increased costs associated with, an increased number of employees over large geographic distances, including the need to implement appropriate systems, policies, benefits, and compliance programs that are specific to each jurisdiction; • difficulties in managing a business in new markets with diverse cultures, languages, customs, legal systems, alternative dispute systems, and regulatory systems; • increased travel, real estate, infrastructure, and legal compliance costs associated with international operations; • currency exchange rate fluctuations and the resulting effect on our revenue and expenses, and the cost and risk of entering into hedging transactions if we chose to do so in the future; • limitations on our ability to reinvest earnings from operations in one country to fund the capital needs of our operations in other countries; • laws and business practices favoring local competitors or general market preferences for local vendors; • limited or insufficient intellectual property protection or difficulties obtaining, maintaining, protecting or enforcing our intellectual property rights, including our trademarks and patents; • political instability, terrorist activities and military conflict, including the war in Ukraine and conflicts in the Middle East; • an outbreak of a contagious disease, which may cause us or our third-party providers and/or customers to temporarily suspend our or their respective operations in the affected city or country; • exposure to liabilities under anti-corruption and anti-money laundering laws, including the FCPA, U.S. bribery laws, the UK Bribery Act, and similar laws and regulations in other jurisdictions; and • adverse tax burdens and foreign exchange controls that could make it difficult to repatriate earnings and cash.
Despite the security controls we have in place, such attacks are very difficult to avoid. 16 There can be no assurance that any security measures that we or the third-parties with whom we work have implemented will be effective against current or future security threats.
Despite the security controls we have in place, such attacks are very difficult to avoid. 17 There can be no assurance that any security measures that we or the third-parties with whom we work have implemented will be effective against current or future security threats.
We are not restricted under the terms of the indentures governing the Notes, from incurring additional debt, securing existing or future debt, recapitalizing our debt, repurchasing our stock, pledging our assets, making investments, paying dividends, guaranteeing debt or taking a number of other actions that are not limited by the terms of the indentures governing the Notes that could have the effect of diminishing our ability to make payments on the Notes when due.
We are not restricted under the terms of the indenture governing the 2029 Notes, from incurring additional debt, securing existing or future debt, recapitalizing our debt, repurchasing our stock, pledging our assets, making investments, paying dividends, guaranteeing debt or taking a number of other actions that are not limited by the terms of the indenture governing the 2029 Notes that could have the effect of diminishing our ability to make payments on the 2029 Notes when due.
The success of our platform depends, in part, on its ability to be deployed in a self-service installation process. We currently offer more than 850 out-of-the-box integrations to assist customers in deploying Datadog, and we need to continuously modify and enhance our products to adapt to changes and innovation in existing and new technologies to maintain and grow our integrations.
The success of our platform depends, in part, on its ability to be deployed in a self-service installation process. We currently offer more than 1,000 out-of-the-box integrations to assist customers in deploying Datadog, and we need to continuously modify and enhance our products to adapt to changes and innovation in existing and new technologies to maintain and grow our integrations.
Our financial statements could fail to reflect adequate reserves to cover such a contingency. Risks Related to Ownership of Our Class A Common Stock 35 Our stock price may be volatile, and the value of our Class A common stock may decline.
Our financial statements could fail to reflect adequate reserves to cover such a contingency. 37 Risks Related to Ownership of Our Class A Common Stock Our stock price may be volatile, and the value of our Class A common stock may decline.
In addition, the option counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to our Class A common stock and/or purchasing or selling our Class A common stock or other securities of ours in secondary market transactions following the pricing of the applicable series of Notes and prior to the maturity of the applicable series of Notes.
In addition, the option counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to our Class A common stock and/or purchasing or selling our Class A common stock or other securities of ours in secondary market transactions following the pricing of the 2029 Notes and prior to the maturity of the 2029 Notes.
In addition to the other risks described herein, factors that may affect our results of operations include the following: • fluctuations in demand for or pricing of our platform and products; 19 • fluctuations in usage of our platform and products; • our ability to attract new customers; • our ability to retain our existing customers; • customer expansion rates and the pricing and quantity of subscriptions renewed; • the pricing of subscriptions from customers in our cloud-provider marketplaces; • timing and amount of our investments to expand the capacity of our third-party cloud infrastructure providers; • seasonality driven by industry conferences; • the investment in new products and features relative to investments in our existing infrastructure and products; • the timing of our customer purchases; • fluctuations or delays in purchasing decisions in anticipation of new products or enhancements by us or our competitors; • changes in customers’ budgets and in the timing of their budget cycles and purchasing decisions; • our ability to control costs, including our operating expenses; • the amount and timing of payment for operating expenses, particularly research and development and sales and marketing expenses, including commissions; • the amount and timing of non-cash expenses, including stock-based compensation, goodwill impairments and other non-cash charges; • the amount and timing of costs associated with recruiting, training and integrating new employees and retaining and motivating existing employees; • the effects of acquisitions and their integration; • general economic conditions, both domestically and internationally, as well as economic conditions specifically affecting industries in which our customers participate, including those impacted by the war in Ukraine and conflicts in the Middle East; • the effect of other economic factors, including inflation, pricing and currency fluctuations; • the impact of new accounting pronouncements; • changes in regulatory or legal environments that may cause us to incur, among other elements, expenses associated with compliance; • changes in the competitive dynamics of our market, including consolidation among competitors or customers; and • significant security breaches of, technical difficulties with, or interruptions to, the delivery and use of our products and platform capabilities.
In addition to the other risks described herein, factors that may affect our results of operations include the following: • fluctuations in demand for or pricing of our platform and products; • fluctuations in usage of our platform and products; • our ability to attract new customers; • our ability to retain our existing customers; • customer expansion rates and the pricing and quantity of subscriptions renewed; • the pricing of subscriptions from customers in our cloud-provider marketplaces; • timing and amount of our investments to expand the capacity of our third-party cloud infrastructure providers; • seasonality driven by industry conferences; • the investment in new products and features relative to investments in our existing infrastructure and products; • the timing of our customer purchases; • fluctuations or delays in purchasing decisions in anticipation of new products or enhancements by us or our competitors; • changes in customers’ budgets and in the timing of their budget cycles and purchasing decisions; • our ability to control costs, including our operating expenses; • the amount and timing of payment for operating expenses, particularly research and development and sales and marketing expenses, including commissions; • the amount and timing of non-cash expenses, including stock-based compensation, goodwill impairments and other non-cash charges; • the amount and timing of costs associated with recruiting, training and integrating new employees and retaining and motivating existing employees; • the effects of acquisitions and their integration; • general economic conditions, both domestically and internationally, as well as economic conditions specifically affecting regions and industries in which our customers participate, including those impacted by the war in Ukraine and conflicts in the Middle East; • the effects of trade policies, such as trade wars, tariffs or other trade restrictions or the threat of such actions; • the effect of other economic factors, including inflation, pricing and currency fluctuations; • the impact of new accounting pronouncements; • changes in regulatory or legal environments that may cause us to incur, among other elements, expenses associated with compliance; 21 • changes in the competitive dynamics of our market, including consolidation among competitors or customers; and • significant security breaches of, technical difficulties with, or interruptions to, the delivery and use of our products and platform capabilities.
Our effective tax rate or tax liability could change due to several factors, including: • changes in the relative amounts of income before taxes in the various jurisdictions in which we operate that have differing statutory tax rates; • changes in tax laws, tax treaties, and regulations or the interpretation of them, including changes to IRC Section 174 under the U.S.
Our effective tax rate or tax liability could change due to several factors, including: • changes in the relative amounts of income before taxes in the various jurisdictions in which we operate that have differing statutory tax rates; • changes in tax laws, tax treaties, and regulations or the interpretation of them, including changes under the U.S.
Tax Cuts and Jobs Act and the Inflation Reduction Act; • our ability to substantiate and utilize research and development tax credits to offset our future tax liabilities, taking into account any limitations under Section 382; • further implementation of the Organization for Economic Co-operation and Development’s (OECD) international tax framework, including the Pillar Two minimum tax regime; • changes to our assessment about our ability to realize our deferred tax assets that are based on estimates of our future results, the prudence and feasibility of possible tax planning strategies, and the economic and political environments in which we do business; • the outcome of current and future tax audits, examinations, or administrative appeals; and • limitations or adverse findings regarding our ability to do business in some jurisdictions.
Tax Cuts, Jobs Act, the Inflation Reduction Act, and the One Big Beautiful Bill Act OBBBA; • our ability to substantiate and utilize research and development tax credits to offset our future tax liabilities, taking into account any limitations under Section 382 of the Code; • further implementation of the Organization for Economic Co-operation and Development’s (OECD) international tax framework, including the Pillar Two minimum tax regime; • changes to our assessment about our ability to realize our deferred tax assets that are based on estimates of our future results, the prudence and feasibility of possible tax planning strategies, and the economic and political environments in which we do business; • the outcome of current and future tax audits, examinations, or administrative appeals; and • limitations or adverse findings regarding our ability to do business in some jurisdictions.
In connection with establishing their initial hedges of the capped call transactions, the applicable option counterparties or their respective affiliates entered into various derivative transactions with respect to our Class A common stock and/or purchased shares of our Class A common stock concurrently with or shortly after the pricing of the applicable series of Notes, including with certain investors in the applicable series of Notes.
In connection with establishing their initial hedges of the capped call transactions, the option counterparties or their respective affiliates entered into various derivative transactions with respect to our Class A common stock and/or purchased shares of our Class A common stock concurrently with or shortly after the pricing of the 2029 Notes, including with certain investors in the 2029 Notes.
Among other things, our applications, systems, networks, software, other computer assets and physical facilities could be breached or could otherwise malfunction or fail, or the sensitive information that we store could be otherwise compromised due to employee error or malfeasance, if, for example, third parties fraudulently induce our employees or our members to disclose information or user names and/or passwords, or otherwise compromise the security of our networks, systems and/or physical facilities.
Among other things, our applications, systems, networks, software, other computer assets and physical facilities have been and in the future could be breached or could otherwise malfunction or fail, or the sensitive information that we store could be otherwise compromised due to employee error or malfeasance, if, for example, third parties fraudulently induce our employees or our members to disclose information or user names and/or passwords, or otherwise compromise the security of our networks, systems and/or physical facilities.
We offer free trials and a free tier of our platform to drive developer awareness of our products, and encourage usage and adoption. If these marketing strategies fail to lead to customers purchasing paid subscriptions, our ability to grow our revenue will be adversely affected.
If these marketing strategies fail to lead to customers purchasing paid subscriptions, our ability to grow our revenue will be adversely affected. To encourage awareness, usage, familiarity and adoption of our platform and products, we offer free trials and a free tier of our platform.
Revenue, as determined based on the billing address of our customers, from regions outside of North America was 30% for the year ended December 31, 2024. Beyond North America, we now have sales presence internationally, including in Amsterdam, Dublin, London, Paris, Seoul, Singapore, Sydney, and Tokyo.
Revenue, as determined based on the billing address of our customers, from regions outside of North America was 29% for the year ended December 31, 2025. Beyond North America, we now have sales presence internationally, including in Amsterdam, Dublin, London, Paris, Seoul, Singapore, Sydney, and Tokyo.
They are likely to do so during any observation period related to a conversion of each series of Notes, or, to the extent we exercise the relevant election under the capped call transactions following any repurchase or redemption of the Notes.
They are likely to do so during any observation period related to a conversion of the 2029 Notes, or, to the extent we exercise the relevant election under the capped call transactions following any repurchase or redemption of the 2029 Notes.
If we fail to protect our intellectual property rights adequately, our competitors may gain access to our proprietary technology and develop and commercialize substantially identical products, services or technologies, our business, financial condition, results of operations or prospects may be harmed. In addition, defending our intellectual property rights might entail significant expense.
If we fail to protect our intellectual property rights adequately, our competitors may develop and commercialize substantially identical products, services or technologies, our business, financial condition, results of operations or prospects may be harmed. In addition, defending our intellectual property rights might entail significant expense.
Unfavorable conditions in the economy both in the United States and abroad, including conditions resulting from changes in gross domestic product growth in the United States or abroad, financial and credit market fluctuations, fluctuating inflation and interest rates, international trade relations, political turmoil, natural catastrophes, outbreaks of contagious diseases, warfare and terrorist attacks on the United States, Europe, the Asia Pacific region or elsewhere, such as the war in Ukraine and conflicts in the Middle East, could cause a decrease in business investments, including spending on information technology, disrupt the timing and cadence of key industry events, and negatively affect the growth of our business and our results of operations.
Unfavorable conditions in the economy both in the United States and abroad, including conditions resulting from changes in gross domestic product growth in the United States or abroad, changes in trade policies, such as trade wars, tariffs or other trade restrictions or the threat of such actions, financial and credit market fluctuations, fluctuating inflation and interest rates, international trade relations, political turmoil, natural catastrophes, outbreaks of contagious diseases, warfare and terrorist attacks on the United States, Europe, the Asia Pacific region or elsewhere, such as the conflicts in Ukraine and the Middle East, could cause a decrease in business investments, including spending on information technology, disrupt the timing and cadence of key industry events, and negatively affect the growth of our business and our results of operations.
The CPRA amends the CCPA to give California residents the ability to limit the use of their sensitive personal information, provide additional penalties for CPRA violations concerning California residents under the age of 16, and establish a new California Privacy Protection Agency to implement and enforce the law.
The CPRA amended the CCPA to give California residents the ability to limit the use of their sensitive personal information, provide additional penalties for CPRA violations concerning California residents under the age of 16, and established a new California Privacy Protection Agency to implement and enforce the law.
Our rapid growth also makes it difficult to evaluate our future prospects and may increase the risk that we will not be successful. Our revenue was $2,684.3 million, $2,128.4 million and $1,675.1 million for the years ended December 31, 2024, 2023 and 2022, respectively.
Our rapid growth also makes it difficult to evaluate our future prospects and may increase the risk that we will not be successful. Our revenue was $3,427.2 million, $2,684.3 million and $2,128.4 million for the years ended December 31, 2025, 2024 and 2023, respectively.
For example, if we elect to settle our conversion obligation under our 0.125% Convertible Senior Notes due 2025, or our 2025 Notes, or our 0.00% Convertible Senior Notes due 2029, or the 2029 Notes and together with the 2025 Notes, the Notes, in each case, in shares of our Class A common stock or a combination of cash and shares of our Class A common stock, the issuance of such Class A common stock may dilute the ownership interests of our stockholders and sales in the public market could adversely affect prevailing market prices.
For example, if we elect to settle our conversion obligation under our 0.00% Convertible Senior Notes due 2029, or the 2029 Notes, in shares of our Class A common stock or a combination of cash and shares of our Class A common stock, the issuance of such Class A common stock may dilute the ownership interests of our stockholders and sales in the public market could adversely affect prevailing market prices.
Overall growth of our revenue depends on a number of factors, including our ability to: • price our products effectively so that we are able to attract new customers and expand sales to our existing customers; • expand the functionality and use cases for the products we offer on our platform; • maintain and expand the rates at which customers purchase and renew subscriptions to our platform; • provide our customers with support that meets their needs; • continue to introduce our products to new markets outside of the United States; • successfully identify and acquire or invest in businesses, products or technologies that we believe could complement or expand our platform; and • increase awareness of our brand on a global basis and successfully compete with other companies. 13 Additional factors that may impact the growth of our revenue are described under Part I — Item 1.
Overall growth of our revenue depends on a number of factors, including our ability to: • price our products effectively so that we are able to attract new customers and expand sales to our existing customers; • expand the functionality and use cases for the products we offer on our platform; • maintain and expand the rates at which customers purchase and renew subscriptions to our platform; • provide our customers with support that meets their needs; • continue to introduce our products to new markets outside of the United States; • successfully identify and acquire or invest in businesses, products or technologies that we believe could complement or expand our platform; and • increase awareness of our brand on a global basis and successfully compete with other companies.
Our Class B common stock has ten votes per share and our Class A common stock has one vote per share. As of December 31, 2024, our outstanding shares of Class B common stock represented approximately 44% of the voting power of our outstanding capital stock.
Our Class B common stock has ten votes per share and our Class A common stock has one vote per share. As of December 31, 2025, our outstanding shares of Class B common stock represented approximately 43% of the voting power of our outstanding capital stock.
In the event that our service agreements with our third-party hosting services are terminated, or there is a lapse of service, elimination of services or features that we utilize, interruption of internet service provider connectivity or damage to such facilities, we could experience interruptions in access to our platform as well as significant delays and additional expense in arranging or creating new facilities and services and/or re-architecting our cloud solution for deployment on a different cloud infrastructure service provider, which could adversely affect our business, financial condition and results of operations.
In the event that our service agreements with our third-party hosting services are terminated, or there is a lapse of service, elimination of services or features that we utilize, interruption of internet service provider connectivity or damage to such facilities, we could experience interruptions in access to our platform as well as significant delays and additional expense in arranging or creating new facilities and services and/or re-architecting our cloud solution for deployment on a different cloud infrastructure service provider, which could adversely affect our business, financial condition and results of operations. 20 We offer free trials and a free tier of our platform to drive developer awareness of our products, and encourage usage and adoption.
The conditional conversion feature of the Notes may adversely affect our financial condition and operating results. Each series of Notes is convertible at the option of its holders prior to their scheduled maturity in the event one or more of the conditional conversion features of such series of Notes are triggered.
The conditional conversion feature of the 2029 Notes may adversely affect our financial condition and operating results. The 2029 Notes are convertible at the option of their holders prior to their scheduled maturity in the event one or more of the conditional conversion features of the 2029 Notes are triggered.
For all of these reasons, we may not be able to compete successfully against our current or future competitors, and this competition could result in the failure of our platform to continue to achieve or maintain market acceptance, any of which would harm our business, results of operations, and financial condition.
For all of these reasons, we may not be able to compete successfully against our current or future competitors, and this competition could result in the failure of our platform to continue to achieve or maintain market acceptance, any of which would harm our business, results of operations, and financial condition. 25 The market for our solutions may develop more slowly or differently than we expect.
Risks Related to Our Outstanding Notes We may not have sufficient cash flow from our business to make payments on our significant debt when due, and we may incur additional indebtedness in the future. We issued the 2025 Notes and the 2029 Notes in private placements in June 2020 and December 2024, respectively.
Risks Related to Our Outstanding Notes We may not have sufficient cash flow from our business to make payments on our significant debt when due, and we may incur additional indebtedness in the future. We issued the 2029 Notes in a private placement in December 2024.
If adequate funds are not available on acceptable terms, we may be unable to invest in future growth opportunities, which could harm our business, operating results, and financial condition.
Additional financing may not be available on terms favorable to us, if at all. If adequate funds are not available on acceptable terms, we may be unable to invest in future growth opportunities, which could harm our business, operating results, and financial condition.
There is an increasing focus from regulators, certain investors and other stakeholders concerning environmental, social, and governance, or ESG, matters, both in the United States and internationally. In response, we are in the process of evaluating and developing our ESG practices.
There continues to be a focus from certain regulators, investors and other stakeholders concerning environmental, social, and governance, or ESG, matters, both in the United States and internationally. In response, we are in the process of evaluating and developing our ESG practices.
The capped call transactions cover, subject to customary adjustments (which, in the case of the capped call transactions entered into in connection with the 2029 Notes, are substantially similar to those applicable to the 2029 Notes), the number of shares of our Class A common stock that initially underlie the applicable series of Notes.
In connection with the pricing of the 2029 Notes, we entered into capped call transactions with the option counterparties. The capped call transactions cover, subject to customary adjustments substantially similar to those applicable to the 2029 Notes, the number of shares of our Class A common stock that initially underlie the 2029 Notes.
For example, in prior periods customers in our cloud-native cohort, and more recently larger customers in our AI-native cohort, which cohort represented approximately five percentage points of our year-over-year revenue growth for the quarter ended December 31, 2024, have rapidly increased their usage of our product and then optimized or may in the future optimize their usage.
For example, in prior periods customers in our cloud-native cohort, and more recently larger customers in our AI-native cohort, which cohort includes our largest customer and represented approximately seven percentage points of our year-over-year revenue growth for the quarter ended December 31, 2025, have rapidly increased their usage of our product and then optimized or may in the future optimize their usage or fail to renew their subscriptions.
In addition, Europe and other jurisdictions have enacted data localization laws and cross-border personal data transfer laws. For example, the European Economic Area (EEA) and the United Kingdom have significantly restricted the transfer of personal data to the United States and other countries whose privacy laws it generally believes are inadequate.
For example, the European Economic Area (EEA) and the United Kingdom have significantly restricted the transfer of personal data to the United States and other countries whose privacy laws it generally believes are inadequate.
The global economy, including credit and financial markets, has experienced extreme volatility and disruptions, including severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates, fluctuating inflation and interest rates, and uncertainty about economic stability.
The global economy, including credit and financial markets, has experienced periods of volatility and disruptions, including periods of diminished liquidity and credit availability, changes in consumer confidence, fluctuations in economic growth, volatility in unemployment rates, fluctuating inflation and interest rates, and uncertainty about economic stability.
In addition, our independent registered public accounting firm is required to attest to the effectiveness of our internal control over financial reporting. Our compliance with Section 404 requires that we incur substantial expenses and expend significant management efforts.
This assessment must include disclosure of any material weaknesses identified by our management in our internal control over financial reporting. In addition, our independent registered public accounting firm is required to attest to the effectiveness of our internal control over financial reporting. Our compliance with Section 404 requires that we incur substantial expenses and expend significant management efforts.
In addition, to the extent that we do not effectively address capacity constraints, upgrade our systems as needed and continually develop our technology and network architecture to accommodate actual and anticipated changes in technology, our business, financial condition and results of operations may be adversely affected. 18 We may not be able to successfully manage our growth, and if we are not able to grow efficiently, our business, financial condition and results of operations could be harmed.
In addition, to the extent that we do not effectively address capacity constraints, upgrade our systems as needed and continually develop our technology and network architecture to accommodate actual and anticipated changes in technology, our business, financial condition and results of operations may be adversely affected.
To encourage awareness, usage, familiarity and adoption of our platform and products, we offer free trials and a free tier of our platform. These strategies may not be successful in leading customers to purchase our products, as users of our free tier may not lead to them or others within their organization purchasing and deploying our platform.
These strategies may not be successful in leading customers to purchase our products, as users of our free tier may not lead to them or others within their organization purchasing and deploying our platform.
The OECD's Pillar Two model rules introduced a global minimum tax of 15%. These model rules have been adopted by various governments around the world, some of which are effective for tax periods beginning on or after December 31, 2023. There is no material impact on our financial statements for the tax period ending December 31, 2024.
The OECD's Pillar Two model rules introduced a global minimum tax of 15%. These model rules have been adopted by various governments around the world, some of which are effective for tax periods beginning on or after December 31, 2024.
The imposition by state governments or local governments of sales tax collection obligations on out-of-state sellers could also create additional administrative burdens for us, put us at a competitive disadvantage if they do not impose similar obligations on our competitors, and decrease our future sales, which could have a material adverse effect on our business and results of operations. 29 Our ability to use our net operating losses to offset future taxable income may be subject to certain limitations.
The imposition by state governments or local governments of sales tax collection obligations on out-of-state sellers could also create additional administrative burdens for us, put us at a competitive disadvantage if they do not impose similar obligations on our competitors, and decrease our future sales, which could have a material adverse effect on our business and results of operations.
As of December 31, 2024, approximately 41% of our full-time employees were located outside of the United States, 35% of whom were located in France.
As of December 31, 2025, approximately 44% of our full-time employees were located outside of the United States, 34% of whom were located in France.
Risks Associated with our Growth Unfavorable conditions in our industry or the global economy, or reductions in information technology spending, could limit our ability to grow our business and negatively affect our results of operations.
Risks Associated with our Growth Unfavorable conditions in our industry or the global economy, or reductions in information technology spending, could limit our ability to grow our business and negatively affect our results of operations. 13 Our results of operations may vary based on the impact of unfavorable changes in our industry or the global economy on us or our customers and potential customers.
The market for our solutions may develop more slowly or differently than we expect. It is difficult to predict customer adoption rates and demand for our products, the entry of competitive products or the future growth rate and size of the cloud-based software and SaaS business software markets.
It is difficult to predict customer adoption rates and demand for our products, the entry of competitive products or the future growth rate and size of the cloud-based software and SaaS business software markets.
In addition, even if holders do not elect to convert their Notes, we could be required under applicable accounting rules to reclassify the outstanding principal of the applicable series of Notes as a current rather than long-term liability, which would result in a material reduction of our net working capital.
In addition, even if holders do not elect to convert their 2029 Notes, we could be required under applicable accounting rules to reclassify the outstanding principal of the 2029 Notes as a current rather than long-term liability, which would result in a material reduction of our net working capital. 41 The capped call transactions may affect the value of the 2029 Notes and the market price of our Class A common stock.
The CCPA, which became effective on January 1, 2020, gives California residents (including consumers, employees, job applicants and business representatives) expanded rights to access and delete their personal information, opt out of the sale of personal information, and receive detailed information about how their personal information is used.
States are also constantly amending existing laws, requiring attention to frequently changing legal requirements. 28 The CCPA, which became effective on January 1, 2020, gives California residents (including consumers, employees, job applicants and business representatives) expanded rights to access and delete their personal information, opt out of the sale of personal information, and receive detailed information about how their personal information is used.
Additionally, other countries outside of Europe have enacted or are considering enacting similar cross-border data transfer restrictions and laws requiring local data residency, and strict limitations to the processing of personal information, which could increase the cost and complexity of delivering our services and operating our business.
Additionally, the EU Data Act introduces new obligations related to data portability and services switching, which introduces operational complexities and infrastructure, and may increase our compliance and operational costs. 27 Additionally, other countries outside of Europe have enacted or are considering enacting similar cross-border data transfer restrictions and laws requiring local data residency, and strict limitations to the processing of personal information, which could increase the cost and complexity of delivering our services and operating our business.
To increase our revenue, we must continue to attract new customers. Our success will depend to a substantial extent on the widespread adoption of our platform and products as an alternative to existing solutions.
If we are unable to attract new customers, our business, financial condition and results of operations will be adversely affected. To increase our revenue, we must continue to attract new customers. Our success will depend to a substantial extent on the widespread adoption of our platform and products as an alternative to existing solutions.
Business in this Annual Report on Form 10-K. We may not successfully accomplish any of these objectives, and as a result, it is difficult for us to forecast our future results of operations.
Additional factors that may impact the growth of our revenue are described under Part I — Item 1. Business in this Annual Report on Form 10-K. We may not successfully accomplish any of these objectives, and as a result, it is difficult for us to forecast our future results of operations.
If our customers do not purchase additional subscriptions and products from us, fail to renew their subscriptions or renew on different terms, our revenue may decline and our business, financial condition and results of operations may be harmed. If we are unable to attract new customers, our business, financial condition and results of operations will be adversely affected.
If our customers do not purchase additional subscriptions and products from us, reduce their usage, fail to renew their subscriptions or renew on different terms, our revenue and dollar-based net retention may decline and our business, financial condition and results of operations may be harmed.
Our ability to make scheduled payments of the principal of, to pay interest on or to refinance our indebtedness, including the Notes, depends on our future performance, which is subject to economic, financial, competitive and other factors beyond our control.
We may be required to use a substantial portion of our cash flows from operations to pay principal on our indebtedness. Our ability to make scheduled payments of the principal of or to refinance our indebtedness, including the 2029 Notes, depends on our future performance, which is subject to economic, financial, competitive and other factors beyond our control.
Detecting, investigating, and resolving actual or alleged violations of anti-corruption laws can require a significant diversion of time, resources, and attention from senior management.
As we increase our international sales and business, our risks under these laws may increase. Detecting, investigating, and resolving actual or alleged violations of anti-corruption laws can require a significant diversion of time, resources, and attention from senior management.
For example, the European Union's Artificial Intelligence Act, which would apply beyond the European Union’s borders, came into effect in August 2024. It contains numerous requirements regarding the development and use of AI and imposes significant monetary fines.
For example, the European Union's Artificial Intelligence Act, which would apply beyond the European Union’s borders, came into effect in August 2024. It contains numerous requirements regarding the development and use of AI and imposes significant monetary fines. Further, countries and states are applying their data and consumer protection laws to AI technologies, and particularly generative AI and interactive chatbots.
Our success and future growth depend largely upon the continued services of our executive officers, particularly Olivier Pomel, our co-founder and Chief Executive Officer, Alexis Lê-Quôc, our co-founder and Chief Technology Officer, and David Obstler, our Chief Financial Officer, as well as our other key employees in the areas of research and development and sales and marketing functions.
If we fail to retain and motivate members of our management team or other key employees, or fail to attract additional qualified personnel to support our operations, our business and future growth prospects would be harmed. 22 Our success and future growth depend largely upon the continued services of our executive officers, particularly Olivier Pomel, our co-founder and Chief Executive Officer, Alexis Lê-Quôc, our co-founder and Chief Technology Officer, and David Obstler, our Chief Financial Officer, as well as our other key employees in the areas of research and development and sales and marketing functions.
We are evaluating the impact of any Section 382 limitation on our utilization of these acquired NOLs. Unused U.S. federal NOLs for taxable years beginning before January 1, 2018, may be carried forward to offset future taxable income, if any, until such unused NOLs expire.
Unused U.S. federal NOLs for taxable years beginning before January 1, 2018, may be carried forward to offset future taxable income, if any, until such unused NOLs expire.
Any failure of our products to operate effectively with future infrastructure platforms and technologies could reduce the demand for our products. If we are unable to respond to these changes in a cost-effective manner, our products may become less marketable and less competitive or obsolete, and our business, financial condition and results of operations could be adversely affected.
If we are unable to respond to these changes in a cost-effective manner, our products may become less marketable and less competitive or obsolete, and our business, financial condition and results of operations could be adversely affected. 24 The markets in which we participate are competitive, and if we do not compete effectively, our business, financial condition and results of operations could be harmed.
For example, Brazil enacted the General Data Protection Law, New Zealand enacted the New Zealand Privacy Act, China enacted its Personal Information Protection Law, Canada introduced the Digital Charter Implementation Act and India enacted the Information Technology Act.
For example, Brazil enacted the General Data Protection Law, New Zealand enacted the New Zealand Privacy Act, Australia enacted the Australia Privacy Act, China enacted its Personal Information Protection Law, Canada has enacted the Personal Information Protection and Electronic Documents Act, and various related provincial laws and India enacted the Information Technology Act.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe believe these members of our executive team have the appropriate expertise, background, and experience to manage risks arising from cybersecurity threats. Alexis Lê-Quôc is one of the co-founders of our company and has served as our Chief Technology Officer and a member of our board of directors since June 2010. Mr.
Biggest changeAlexis Lê-Quôc is one of the co-founders of our company and has served as our Chief Technology Officer and a member of our board of directors since June 2010. Mr. Lê-Quôc has extensive knowledge and experience from building and leading the development of our technology and from his decades of experience in the technology industry. Prior to co-founding Datadog, Mr.
In addition, certain Datadog products are subject to specific compliance requirements and standards, including, as applicable, ISO 27001, SOC 2, PCI, and FedRAMP (Low and Moderate), and are tested and evaluated by third-party auditors against those applicable compliance requirements and standards.
In addition, certain Datadog products are subject to specific compliance requirements and standards, including, as applicable, ISO 27001, SOC 2, PCI, and FedRAMP (Moderate), and are tested and evaluated by third-party auditors against those applicable compliance requirements and standards.
For example, our Chief Information Security Officer receives regular reports on identified cybersecurity risks and progress toward remediation from our security teams and both our Chief Information Security Officer and Chief Technology Officer are notified of cybersecurity incidents and the management of such incidents in accordance with the escalation procedures of our incident response plan.
For example, our Chief Information Security Officer receives regular reports on identified cybersecurity risks and progress toward remediation from our security teams and both our Chief Information Security Officer and Chief Technology Officer are notified of cybersecurity incidents and the management of such incidents in accordance with the escalation procedures of our incident response plan. 43 We believe these members of our executive team have the appropriate expertise, background, and experience to manage risks arising from cybersecurity threats.
In addition, we maintain third-party vendor management standards that are used to evaluate cybersecurity risks associated with our third-party service providers, and we assess information technology and software vendors to determine their security posture and maturity.
In addition, we maintain cybersecurity insurance, however, the costs related to cybersecurity threats or disruptions may not be fully insured. 42 In addition, we maintain third-party vendor management standards that are used to evaluate cybersecurity risks associated with our third-party service providers, and we assess information technology and software vendors to determine their security posture and maturity.
Escobar has worked at large enterprises, medium-sized companies, and governmental organizations. Previously, Mr. Escobar served as the Vice President of Information Security for Hulu, where he played a pivotal role in setting up key security functions. Prior to that, Mr. Escobar worked for PlayStation, where he built and ran the software security teams. Mr.
Emilio Escobar has served as our Chief Information Security Officer since September 2020. With two decades of experience in information security and compliance, Mr. Escobar has worked at large enterprises, medium-sized companies, and governmental organizations. Previously, Mr. Escobar served as the Vice President of Information Security for Hulu, where he played a pivotal role in setting up key security functions.
We have established an incident response plan that addresses our response to cybersecurity incidents, and we require periodic training for 40 our employees on cybersecurity threats. In addition, we maintain cybersecurity insurance, however, the costs related to cybersecurity threats or disruptions may not be fully insured.
We have established an incident response plan that addresses our response to cybersecurity incidents, and we require periodic training for our employees on cybersecurity threats.
Lê-Quôc held engineering positions at a number of technology and software companies, including IBM Research and France Télécom S.A. Mr. Lê-Quôc received his M.S. in Computer Science from CentraleSupélec. Emilio Escobar has served as our Chief Information Security 41 Officer since September 2020. With two decades of experience in information security and compliance, Mr.
Lê-Quôc worked at Wireless Generation from March 2004 to December 2010, where he most recently served as Director of Live Operations. Previously, Mr. Lê-Quôc held engineering positions at a number of technology and software companies, including IBM Research and France Télécom S.A. Mr. Lê-Quôc received his M.S. in Computer Science from CentraleSupélec.
Escobar holds a BS in Computer Science from the University of Puerto Rico.
Prior to that, Mr. Escobar worked for PlayStation, where he built and ran the software security teams. Mr. Escobar holds a BS in Computer Science from the University of Puerto Rico.
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Lê-Quôc has extensive knowledge and experience from building and leading the development of our technology and from his decades of experience in the technology industry. Prior to co-founding Datadog, Mr. Lê-Quôc worked at Wireless Generation from March 2004 to December 2010, where he most recently served as Director of Live Operations. Previously, Mr.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe lease all of our facilities and do not own any real property. We intend to procure additional space in the future as we continue to add employees and expand geographically. We believe our facilities are adequate and suitable for our current needs.
Biggest changeWe lease other offices around the world for our employees, including in Boston, Denver, San Francisco, Paris, Dublin, Amsterdam, Sydney, Tokyo, Singapore and Seoul. We lease all of our facilities and do not own any real property. We intend to procure additional space in the future as we continue to add employees and expand geographically.
Item 2. Properties Our current principal executive office is located in New York, New York and, as of December 31, 2024, it consists of approximately 301,000 square feet of space under leases that expire in June 2033. We lease other offices around the world for our employees, including in Boston, Denver, San Francisco, Paris, Dublin, Amsterdam, Sydney, Tokyo, and Singapore.
Item 2. Properties Our current principal executive office is located in New York, New York and, as of December 31, 2025, it consists of approximately 395,000 square feet of space under leases that expire in June 2033.
Added
We believe our facilities are adequate and suitable for our current needs.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeThe results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. Item 4. Mine Safety Disclosures Not applicable. 42 PART II
Biggest changeThe results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. Item 4. Mine Safety Disclosures Not applicable. 44 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeStock Performance Graph The graph below shows a comparison, from September 19, 2019 (the date our Class A common stock commenced trading on Nasdaq) through December 31, 2024, of the cumulative total return to stockholders of our Class A common stock relative to the Nasdaq-100 Index, or the Nasdaq 100, and the Nasdaq Computer Index, or the Nasdaq Computer. 43 The graph assumes that $100 was invested in each of our Class A common stock, the Nasdaq 100 and the Nasdaq Computer at their respective closing prices on September 19, 2019 and assumes reinvestment of gross dividends.
Biggest changeStock Performance Graph The graph below shows a comparison, from September 19, 2019 through December 31, 2025, of the cumulative total return to stockholders of our Class A common stock relative to the Standard & Poor's 500 Stock Index (S&P 500), and the Nasdaq Computer Index, or the Nasdaq Computer. 45 The graph assumes that $100 was invested in each of our Class A common stock, the S&P 500 and the Nasdaq Computer at their respective closing prices on September 19, 2019 and assumes reinvestment of gross dividends.
Recent Sales of Unregistered Equity Securities During the year ended December 31, 2024, we issued 40,577 shares of Class A common stock as consideration in acquisitions. The issuance was deemed exempt from registration under the Securities Act pursuant to the exemption provided by Section 4(a)(2) of the Securities Act as a transaction by an issuer not involving a public offering.
Recent Sales of Unregistered Equity Securities During the year ended December 31, 2025, we issued 771,355 shares of Class A common stock as consideration in acquisitions. The issuance was deemed exempt from registration under the Securities Act pursuant to the exemption provided by Section 4(a)(2) of the Securities Act as a transaction by an issuer not involving a public offering.
As of February 6, 2025, there were 41 holders of record of our Class A common stock and 24 holders of record of our Class B common stock. Dividend Policy We have never declared or paid any dividends on our Class A common stock or Class B common stock.
As of February 5, 2026, there were 54 holders of record of our Class A common stock and 30 holders of record of our Class B common stock. Dividend Policy We have never declared or paid any dividends on our Class A common stock or Class B common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeWe recorded a full valuation allowance on our federal and state deferred tax assets as we have concluded that it is not more likely than not that the deferred tax assets will be realized. 48 Results of Operations The following table sets forth our consolidated statements of operations data for the periods indicated: Year Ended December 31, 2024 2023 2022 (in thousands) Revenue $ 2,684,275 $ 2,128,359 $ 1,675,100 Cost of revenue (1)(2)(3) 515,531 409,908 346,743 Gross profit 2,168,744 1,718,451 1,328,357 Operating expenses: Research and development (1)(3) 1,152,703 962,447 752,351 Sales and marketing (1)(2)(3) 756,605 609,276 495,288 General and administrative (1)(3) 205,152 180,192 139,413 Total operating expenses 2,114,460 1,751,915 1,387,052 Operating income (loss) 54,284 (33,464) (58,695) Other income: Interest expense (4) (7,068) (6,302) (16,535) Interest income and other income, net 156,724 100,001 37,160 Other income, net 149,656 93,699 20,625 Income (loss) before provision for income taxes 203,940 60,235 (38,070) Provision for income taxes 20,194 11,667 12,090 Net income (loss) $ 183,746 $ 48,568 $ (50,160) ____________________ (1) Includes stock-based compensation expense as follows: Year Ended December 31, 2024 2023 2022 (in thousands) Cost of revenue $ 26,221 $ 17,578 $ 10,827 Research and development 363,301 313,096 237,120 Sales and marketing 122,079 101,937 76,735 General and administrative 58,735 49,689 38,472 Total $ 570,336 $ 482,300 $ 363,154 ____________________ (2) Includes amortization of acquired intangibles expense as follows: Year Ended December 31, 2024 2023 2022 (in thousands) Cost of revenue $ 5,642 $ 8,041 $ 6,750 Sales and marketing 825 825 825 Total $ 6,467 $ 8,866 $ 7,575 _____________________ (3) Includes employer payroll taxes on employee stock transactions as follows: 49 Year Ended December 31, 2024 2023 2022 (in thousands) Cost of revenue $ 446 $ 364 $ 266 Research and development 31,134 21,449 10,384 Sales and marketing 4,694 5,917 2,766 General and administrative 6,852 4,811 830 Total $ 43,126 $ 32,541 $ 14,246 ____________________ (4) Includes amortization of issuance costs as follows: Year Ended December 31, 2024 2023 2022 (in thousands) Interest expense $ 3,761 $ 3,388 $ 3,369 The following table sets forth our consolidated statements of operations data expressed as a percentage of revenue for the periods indicated: Year Ended December 31, 2024 2023 2022 (as a percentage of total revenue (1) ) Revenue 100 % 100 % 100 % Cost of revenue 19 19 21 Gross profit 81 81 79 Operating expenses: Research and development 43 45 45 Sales and marketing 28 29 30 General and administrative 8 8 8 Total operating expenses 79 82 83 Operating income (loss) 2 (2) (4) Other income: Interest expense — — (1) Interest income and other income, net 6 5 2 Other income, net 6 4 1 Income (loss) before provision for income taxes 8 3 (2) Provision for income taxes 1 1 1 Net income (loss) 7 % 2 % (3) % _____________________ (1) Certain items may not total due to rounding.
Biggest changeWe recorded a full valuation allowance on our federal and state deferred tax assets as we have concluded that it is not more likely than not that the deferred tax assets will be realized. 50 Results of Operations The following table sets forth our consolidated statements of operations data for the periods indicated: Year Ended December 31, 2025 2024 2023 (in thousands) Revenue $ 3,427,158 $ 2,684,275 $ 2,128,359 Cost of revenue (1)(2)(3) 686,957 515,531 409,908 Gross profit 2,740,201 2,168,744 1,718,451 Operating expenses: Research and development (1)(3) 1,548,451 1,152,703 962,447 Sales and marketing (1)(2)(3) 956,423 756,605 609,276 General and administrative (1)(3)(4) 279,700 205,152 180,192 Total operating expenses 2,784,574 2,114,460 1,751,915 Operating (loss) income (44,373) 54,284 (33,464) Other income: Interest expense (5) (11,059) (7,068) (6,302) Interest income and other income, net 182,453 156,724 100,001 Other income, net 171,394 149,656 93,699 Income before provision for income taxes 127,021 203,940 60,235 Provision for income taxes 19,280 20,194 11,667 Net income $ 107,741 $ 183,746 $ 48,568 ____________________ (1) Includes stock-based compensation expense as follows: Year Ended December 31, 2025 2024 2023 (in thousands) Cost of revenue $ 29,729 $ 26,221 $ 17,578 Research and development 469,526 363,301 313,096 Sales and marketing 156,472 122,079 101,937 General and administrative 94,944 58,735 49,689 Total $ 750,671 $ 570,336 $ 482,300 ____________________ (2) Includes amortization of acquired intangibles expense as follows: Year Ended December 31, 2025 2024 2023 (in thousands) Cost of revenue $ 5,428 $ 5,642 $ 8,041 Sales and marketing 945 825 825 Total $ 6,373 $ 6,467 $ 8,866 _____________________ (3) Includes employer payroll taxes on employee stock transactions as follows: 51 Year Ended December 31, 2025 2024 2023 (in thousands) Cost of revenue $ 695 $ 446 $ 364 Research and development 40,183 31,134 21,449 Sales and marketing 5,923 4,694 5,917 General and administrative 6,998 6,852 4,811 Total $ 53,799 $ 43,126 $ 32,541 ___________________ (4) Includes M&A transaction costs as follows: Year Ended December 31, 2025 2024 2023 (in thousands) General and administrative $ 1,574 $ — $ — ____________________ (5) Includes amortization of issuance costs as follows: Year Ended December 31, 2025 2024 2023 (in thousands) Interest expense $ 5,602 $ 3,761 $ 3,388 The following table sets forth our consolidated statements of operations data expressed as a percentage of revenue for the periods indicated: Year Ended December 31, 2025 2024 2023 (as a percentage of total revenue (1) ) Revenue 100 % 100 % 100 % Cost of revenue 20 19 19 Gross profit 80 81 81 Operating expenses: Research and development 45 43 45 Sales and marketing 28 28 29 General and administrative 8 8 8 Total operating expenses 81 79 82 Operating (loss) income (1) 2 (2) Other income: Interest expense — — — Interest income and other income, net 5 6 5 Other income, net 5 6 4 Income before provision for income taxes 4 8 3 Provision for income taxes 1 1 1 Net income 3 % 7 % 2 % _____________________ (1) Certain items may not total due to rounding.
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.
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 .
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 .
We intend to continue to invest additional resources in our platform infrastructure and our customer support and success organizations to expand the capability of our platform and ensure that our customers are realizing the full benefit of our 47 platform and products. The level, timing and relative investment in our infrastructure could affect our cost of revenue in the future.
We intend to continue to invest additional resources in our platform infrastructure and our customer support and success organizations to expand the capability of our platform and ensure that our customers are realizing the full benefit of our platform and products. The level, timing and relative investment in our infrastructure could affect our cost of revenue in the future.
Operating Expenses Our operating expenses consist of research and development, sales and marketing, and general and administrative expenses. Personnel costs are the most significant component of operating expenses and consist of salaries, benefits, bonuses, stock-based compensation expense and sales commissions. Operating expenses also include overhead costs for facilities and shared IT-related expenses, including depreciation expense.
Operating Expenses 49 Our operating expenses consist of research and development, sales and marketing, and general and administrative expenses. Personnel costs are the most significant component of operating expenses and consist of salaries, benefits, bonuses, stock-based compensation expense and sales commissions. Operating expenses also include overhead costs for facilities and shared IT-related expenses, including depreciation expense.
We believe these metrics indicate strong expansion of product adoption across our platform. 46 We intend to continue to invest in building additional products, features and functionality that expand our capabilities and facilitate the extension of our platform to new use cases.
We believe these metrics indicate strong expansion of product adoption across our platform. We intend to continue to invest in building additional products, features and functionality that expand our capabilities and facilitate the extension of our platform to new use cases.
For committed contractual amount of usage that is delivered as used, a monthly subscription based on usage, or usage in excess of a ratable subscription, we recognize revenue as the services are rendered. 54 Internal-Use Software Development Costs We capitalize certain costs related to the development of our platform and other software applications for internal-use.
For committed contractual amount of usage that is delivered as used, a monthly subscription based on usage, or usage in excess of a ratable subscription, we recognize revenue as the services are rendered. 56 Internal-Use Software Development Costs We capitalize certain costs related to the development of our platform and other software applications for internal-use.
We stop capitalizing these costs when the software is substantially complete and ready for its intended use, including the completion of all significant testing. These costs are amortized on a straight-line basis over the estimated useful life of the related asset, generally estimated to be two years.
We stop capitalizing these costs when the software is substantially complete and ready for its intended use, including the completion of all significant testing. These costs are amortized on a straight-line basis over the estimated useful life of the related asset, generally estimated to be three years.
In accordance with authoritative guidance, we begin to capitalize our costs to develop software when preliminary development efforts are successfully completed, management has authorized and committed project funding, and it is probable that the project will be completed and the software will be used as intended.
In accordance with authoritative guidance, we begin to capitalize our costs to develop software when preliminary development efforts are successfully completed, management with the relevant authority has authorized and committed to funding the project, and it is probable that the project will be completed and the software will be used as intended.
Our primary uses of cash from operating activities are for personnel expenses, hosting expenses, facility expenses, and marketing expenses. We have generated positive cash flows from operations during the years ended December 31, 2024, 2023, and 2022.
Our primary uses of cash from operating activities are for personnel expenses, hosting expenses, facility expenses, and marketing expenses. We have generated positive cash flows from operations during the years ended December 31, 2025, 2024, and 2023.
This section of our Annual Report on Form 10-K discusses our financial condition and results of operations for the fiscal years ended December 31, 2024 and 2023, and year-to-year comparisons between fiscal 2024 and fiscal 2023.
This section of our Annual Report on Form 10-K discusses our financial condition and results of operations for the fiscal years ended December 31, 2025 and 2024, and year-to-year comparisons between fiscal 2025 and fiscal 2024.
A discussion of our financial condition and results of operations for the fiscal year ended December 31, 2022 and year-to-year comparisons between fiscal 2023 and fiscal 2022 that are not included in this Annual Report on Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed on February 24, 2023.
A discussion of our financial condition and results of operations for the fiscal year ended December 31, 2023 and year-to-year comparisons between fiscal 2024 and fiscal 2023 that are not included in this Annual Report on Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed on February 20, 2025.
Expanding Internationally 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 30% of our total revenue for each of the years ended December 31, 2024 and 2023.
Expanding Internationally 48 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% of our total revenue for each of the years ended December 31, 2025 and 2024.
Non-cancelable purchase commitments for business operations and operating lease obligations total $1.4 billion and $365.6 million, respectively, as of December 31, 2024, due primarily over the next five years. Purchase commitments for business operations are primarily related to cloud hosting and other software-based services. We have also issued long-term debt to finance our business.
Non-cancelable purchase commitments for business operations and operating lease obligations total $1.4 billion and $375.2 million, respectively, as of December 31, 2025, due primarily over the next five years. Purchase commitments for business operations are primarily related to cloud hosting and other software-based services. We have also issued long-term debt to finance our business.
Overview Datadog is the observability and security platform for cloud applications. 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 44 and security for our customers’ entire technology stack.
Overview Datadog is the AI-powered observability and security platform for cloud applications. 46 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.
As of December 31, 2023, 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.
As of December 31, 2024, 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.
When assessing sources of liquidity, we also include cash and cash equivalents of $1.2 billion and marketable securities of $2.9 billion as of December 31, 2024. 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.
When assessing sources of liquidity, we also include cash and cash equivalents of $0.4 billion and marketable securities of $4.1 billion as of December 31, 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.
As of December 31, 2024, we had approximately 462 customers with annual run-rate revenue, or ARR, of $1.0 million or more, up from 396 as of December 31, 2023.
As of December 31, 2025, we had approximately 603 customers with annual run-rate revenue, or ARR, of $1.0 million or more, up from 462 as of December 31, 2024.
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 December 31, 2024, our trailing 12-month dollar-based net retention rate was high-110%'s.
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 December 31, 2025, our trailing 12-month dollar-based net retention rate was about 120%.
Substantially all of our revenue is from subscription software sales. We have continued to make significant expenditures and investments, including in personnel-related costs, sales and marketing, infrastructure and operations, and have incurred net income (losses) of $183.7 million, $48.6 million and $(50.2) million for the fiscal years ended December 31, 2024, 2023 and 2022, respectively.
Substantially all of our revenue is from subscription software sales. We have continued to make significant expenditures and investments, including in personnel-related costs, sales and marketing, infrastructure and operations, and have generated net income of $107.7 million, $183.7 million and $48.6 million for the fiscal years ended December 31, 2025, 2024 and 2023, respectively.
This increase was primarily due to an increase of $158.9 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 $30.4 million in cloud infrastructure-related investments.
This increase was primarily due to an increase of $324.4 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 $60.0 million in cloud infrastructure-related investments.
We have grown rapidly in recent periods, with revenues for the fiscal years ended December 31, 2024, 2023 and 2022 of $2,684.3 million, $2,128.4 million, and $1,675.1 million, respectively, representing year-over-year growth of 26% from the fiscal year ended December 31, 2023 to the fiscal year ended December 31, 2024 and 27% from the fiscal year ended December 31, 2022 to the fiscal year ended December 31, 2023.
We have grown rapidly in recent periods, with revenues for the fiscal years ended December 31, 2025, 2024 and 2023 of $3,427.2 million, $2,684.3 million, and $2,128.4 million, respectively, representing year-over-year growth of 28% from the fiscal year ended December 31, 2024 to the fiscal year ended December 31, 2025 and 26% from the fiscal year ended December 31, 2023 to the fiscal year ended December 31, 2024.
Our operating cash flow was $870.6 million, $660.0 million and $418.4 million for the years ended December 31, 2024, 2023 and 2022, respectively. Our free cash flow was $775.1 million, $597.5 million and $353.5 million for the years ended December 31, 2024, 2023 and 2022, respectively. See the section titled “—Liquidity and Capital Resources—Non-GAAP Free Cash Flow” below.
Our operating cash flow was $1,050.1 million, $870.6 million and $660.0 million for the years ended December 31, 2025, 2024 and 2023, respectively. Our free cash flow was $914.7 million, $775.1 million and $597.5 million for the years ended December 31, 2025, 2024 and 2023, respectively. See the section titled “—Liquidity and Capital Resources—Non-GAAP Free Cash Flow” below.
The following table presents a reconciliation of free cash flow to net cash provided by operating activities, the most directly comparable financial measure calculated in accordance with GAAP, for each of the periods indicated: 53 Year Ended December 31, 2024 2023 2022 (in thousands) Net cash provided by operating activities $ 870,603 $ 659,954 $ 418,407 Less: Purchases of property and equipment (34,719) (27,586) (35,261) Less: Capitalized software development costs (60,781) (34,820) (29,628) Free cash flow $ 775,103 $ 597,548 $ 353,518 Critical Accounting Estimates Our financial statements are prepared in accordance with GAAP.
The following table presents a reconciliation of free cash flow to net cash provided by operating activities, the most directly comparable financial measure calculated in accordance with GAAP, for each of the periods indicated: 55 Year Ended December 31, 2025 2024 2023 (in thousands) Net cash provided by operating activities $ 1,050,135 $ 870,603 $ 659,954 Less: Purchases of property and equipment (49,578) (34,719) (27,586) Less: Capitalized software development costs (85,840) (60,781) (34,820) Free cash flow $ 914,717 $ 775,103 $ 597,548 Critical Accounting Estimates Our financial statements are prepared in accordance with GAAP.
We may from time to time seek to retire or purchase our 2025 Notes or the 2029 Notes, through cash purchases and/or exchanges for equity securities, in open market purchases, privately negotiated transactions or otherwise.
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.
This increase was primarily driven by an increase of $51.9 million in interest income, mainly due to income earned from investments in marketable securities. Liquidity and Capital Resources Our largest source of operating cash is cash collection from sales of subscriptions to our customers.
This increase was primarily driven by an increase of $39.1 million in interest income, mainly due to income earned from investments in marketable securities, offset by $14.0 million due to fluctuations related to foreign currency exchange rates. Liquidity and Capital Resources Our largest source of operating cash is cash collection from sales of subscriptions to our customers.
Consequently, any decreases in new subscriptions or renewals in any one period may not be immediately reflected as a decrease in revenue for that period, but could negatively affect our revenue in future quarters.
As a result, much of our revenue is generated from subscriptions entered into during previous periods. Consequently, any decreases in new subscriptions or renewals in any one period may not be immediately reflected as a decrease in revenue for that period, but could negatively affect our revenue in future quarters.
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.
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.
Research and Development Year Ended December 31, 2024 2023 Change % Change (dollars in thousands) Research and development $ 1,152,703 $ 962,447 $ 190,256 20 % Percentage of revenue 43 % 45 % Research and development expense increased by $190.3 million, or 20%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Research and Development Year Ended December 31, 2025 2024 Change % Change (dollars in thousands) Research and development $ 1,548,451 $ 1,152,703 $ 395,748 34 % Percentage of revenue 45 % 43 % Research and development expense increased by $395.7 million, or 34%, for the year ended December 31, 2025 compared to the year ended December 31, 2024.
This increase was primarily due to an increase of $115.2 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 $27.9 million in advertising, sales, marketing and promotional activities. 51 General and Administrative Year Ended December 31, 2024 2023 Change % Change (dollars in thousands) General and administrative $ 205,152 $ 180,192 $ 24,960 14 % Percentage of revenue 8 % 8 % General and administrative expense increased by $25.0 million, or 14%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
This increase was primarily due to an increase of $165.4 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 $26.3 million in advertising, sales, marketing and promotional activities. 53 General and Administrative Year Ended December 31, 2025 2024 Change % Change (dollars in thousands) General and administrative $ 279,700 $ 205,152 $ 74,548 36 % Percentage of revenue 8 % 8 % General and administrative expense increased by $74.5 million, or 36%, for the year ended December 31, 2025 compared to the year ended December 31, 2024.
This increase was primarily due to an increase of $24.3 million in personnel costs and other related costs as a result of increased headcount.
This increase was primarily due to an increase of $58.2 million in personnel costs and other related costs as a result of increased headcount, and an increase of $10.4 million in legal and other professional services expenses.
The increase in cash provided by financing activities was partially offset by repayments of the 2025 Notes of $196.8 million and purchases of Capped Calls related to the 2029 Notes of $100.9 million. Non-GAAP Free Cash Flow We report our financial results in accordance with U.S. GAAP.
The decrease in cash provided by financing activities was partially offset by the absence of purchases of Capped Calls related to the 2029 Notes of $100.9 million and proceeds from the issuance of common stock under the employee stock purchase plan of $13.1 million. Non-GAAP Free Cash Flow We report our financial results in accordance with U.S. GAAP.
Our gross margin remained flat for the year ended December 31, 2024 compared to the year ended December 31, 2023, primarily as the result of revenue growing in proportion to the growth of third-party cloud infrastructure provider costs.
Our gross margin decreased by 1% for the year ended December 31, 2025 compared to the year ended December 31, 2024, primarily as the result of increased in third-party cloud infrastructure provider costs.
This increase was primarily due to an increase of $78.5 million in third-party cloud infrastructure hosting and software costs and an increase of $19.3 million in personnel costs and other related costs as a result of increased headcount.
This increase was primarily due to an increase of $149.8 million in third-party cloud infrastructure hosting and software costs and an increase of $18.2 million in personnel costs including allocated overhead costs as a result of increased headcount.
Sales and Marketing Year Ended December 31, 2024 2023 Change % Change (dollars in thousands) Sales and marketing $ 756,605 $ 609,276 $ 147,329 24 % Percentage of revenue 28 % 29 % Sales and marketing expense increased by $147.3 million, or 24%, for the year ended December 31, 2024 compared to the year ended December 31, 2023 .
Sales and Marketing Year Ended December 31, 2025 2024 Change % Change (dollars in thousands) Sales and marketing $ 956,423 $ 756,605 $ 199,818 26 % Percentage of revenue 28 % 28 % Sales and marketing expense increased by $199.8 million, or 26%, for the year ended December 31, 2025 compared to the year ended December 31, 2024 .
Cost of Revenue and Gross Margin Year Ended December 31, 2024 2023 Change % Change (dollars in thousands) Cost of revenue $ 515,531 $ 409,908 $ 105,623 26 % Gross margin 81 % 81 % Cost of revenue increased by $105.6 million, or 26%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Cost of Revenue and Gross Margin Year Ended December 31, 2025 2024 Change % Change (dollars in thousands) Cost of revenue $ 686,957 $ 515,531 $ 171,426 33 % Gross margin 80 % 81 % Cost of revenue increased by $171.4 million, or 33%, for the year ended December 31, 2025 compared to the year ended December 31, 2024.
Financing Activities Net cash provided by financing activities for the year ended December 31, 2024 increased by $728.8 million compared to the year ended December 31, 2023, primarily due to proceeds from the issuance of the 2029 Notes of $978.9 million and proceeds from the termination of Capped Calls related to the 2025 Notes of $54.7 million.
Financing Activities Net cash provided by financing activities for the year ended December 31, 2025 decreased by $1,359.6 million compared to the year ended December 31, 2024, primarily due to the absence of proceeds from the issuance of the 2029 Notes of $979.1 million, higher repayments of the 2025 Notes of $438.8 million, and the absence of proceeds from the termination of Capped Calls related to the 0.125% Convertible Senior Notes 2025 (the "2025 Notes"), together with the 2029 Notes, (the "Notes") of $54.7 million.
Additionally, as of December 31, 2024, approximately 50% of our customers were using more than four products, up from approximately 47% a year earlier, and approximately 26% of our customers were using more than six products, up from approximately 22% a year earlier.
Additionally, as of December 31, 2025, approximately 55% of our customers were using four or more products, up from approximately 50% a year earlier; approximately 33% of our customers were using six or more products, up from approximately 26% a year earlier; approximately 18% of our customers were using eight or more products, up from approximately 13% a year earlier; and approximately 9% of our customers were using ten or more products, up from 5% a year earlier.
Comparison of the Years Ended December 31, 2024 and 2023 Revenue Year Ended December 31, 2024 2023 Change % Change Revenue $ 2,684,275 $ 2,128,359 $ 555,916 26 % 50 Revenue increased by $555.9 million or 26%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Comparison of the Years Ended December 31, 2025 and 2024 Revenue 52 Year Ended December 31, 2025 2024 Change % Change Revenue $ 3,427,158 $ 2,684,275 $ 742,883 28 % Revenue increased by $742.9 million or 28%, for the year ended December 31, 2025 compared to the year ended December 31, 2024.
Other Income, Net Year Ended December 31, 2024 2023 Change % Change (dollars in thousands) Other income, net $ 149,656 $ 93,699 $ 55,957 60 % Percentage of revenue 6 % 4 % Other income, net increased by $56.0 million, or 60% for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Other Income, Net Year Ended December 31, 2025 2024 Change % Change (dollars in thousands) Other income, net $ 171,394 $ 149,656 $ 21,738 15 % Percentage of revenue 5 % 6 % Other income, net increased by $21.7 million, or 15% for the year ended December 31, 2025 compared to the year ended December 31, 2024.
Cash Flows The following table shows a summary of our cash flows for the periods presented: 52 Year Ended December 31, 2024 2023 (in thousands) Cash provided by operating activities $ 870,603 $ 659,954 Cash used in investing activities (736,840) (731,365) Cash provided by financing activities 787,083 58,279 Operating Activities Net cash provided by operating activities for the year ended December 31, 2024 increased $210.6 million compared to the year ended December 31, 2023, primarily driven by an increase in non-cash charges of $106.8 million, an increase in accrued expenses and other liabilities of $38.9 million, and a decrease in accounts receivable of $17.2 million.
Cash Flows The following table shows a summary of our cash flows for the periods presented: 54 Year Ended December 31, 2025 2024 (in thousands) Cash provided by operating activities $ 1,050,135 $ 870,603 Cash used in investing activities (1,334,480) (736,840) Cash (used in) provided by financing activities (572,483) 787,083 Operating Activities Net cash provided by operating activities for the year ended December 31, 2025 increased $179.5 million compared to the year ended December 31, 2024, primarily driven by an increase in non-cash charges of $215.4 million, an increase in deferred revenue of $75.7 million, and a increase in accrued expenses and other liabilities of $54.5 million.
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 45 awareness within the development and operations communities.
Factors Affecting Our Performance Acquiring New Customers 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.
Expanding Within Our Existing Customer Base Our base of customers represents a significant opportunity for further sales expansion. As of December 31, 2024, we had approximately 3,610 customers with annual run-rate revenue, or ARR, of $100,000 or more, representing 88% of our ARR, up from 3,190 as of December 31, 2023, representing 86% of our ARR.
As of December 31, 2025, we had approximately 4,310 customers with annual run-rate revenue, or ARR, of $100,000 or more, representing 90% of our ARR, up from 3,610 as of December 31, 2024, representing 88% of our ARR.
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 qualified institutional buyers pursuant to Rule 144A under the Securities Act.
In December 2024, we issued $1.0 billion aggregate principal amount of the 2029 Notes in a private placement to qualified 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.
As of December 31, 2024, we had approximately 30,000 customers spanning organizations of a broad range of sizes and industries, compared to approximately 27,300 as of December 31, 2023.
We also plan to continue to invest in building brand awareness within the development and operations communities. As of December 31, 2025, we had approximately 32,700 customers spanning organizations of a broad range of sizes and industries, compared to approximately 30,000 as of December 31, 2024.
As of December 31, 2024, we had $1,247.0 million in cash and cash equivalents and $2,942.1 million in marketable securities.
As of December 31, 2025, we had $401.3 million in cash and cash equivalents and $4,073.5 million in marketable securities.
The increase in non-cash charges related primarily to an increase of $88.0 million in stock-based compensation as we continued to increase headcount to support the growth of the business.
The increase in non-cash charges related primarily to an increase of $180.3 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 an increase in accounts receivable of $52.9 million and an increase in deferred contract costs of $50.8 million.
In the case of subscriptions for committed contractual amounts of usage, revenue is recognized ratably over the term of the subscription agreement, generally beginning on the date that our platform is made available to a customer. As a result, much of our revenue is generated from subscriptions entered into during previous periods.
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, In the case of subscriptions for committed contractual amounts of usage, revenue is recognized ratably over the term of the subscription agreement, generally beginning on the date that our platform is made available to a customer.
Unfavorable conditions in the economy both in the United States and abroad may negatively affect the growth of our business and our results of operations. For example, macroeconomic events including fluctuating inflation and interest rates, the Russian invasion of Ukraine, and the conflicts in the Middle East have led to economic uncertainty.
Unfavorable conditions in the economy both in the United States and abroad may negatively affect the growth of our business and our results of operations.
Investing Activities Net cash used in investing activities for the year ended December 31, 2024 increased by $5.5 million compared to the year ended December 31, 2023, primarily driven by an increase in the purchases of marketable securities of $95.2 million, a decrease in proceeds from the sale of marketable securities of $36.8 million, an increase in the capitalization of software development costs of $26.0 million, partially offset by an increase in proceeds from maturities of marketable securities of $154.3 million.
Investing Activities Net cash used in investing activities for the year ended December 31, 2025 increased by $597.6 million compared to the year ended December 31, 2024, primarily driven by an increase in the purchases of marketable securities of $946.6 million, an increase in cash paid for acquisition of businesses, net of cash acquired of $110.9 million, an increase in capitalized software development costs of $25.1 million, and an increase in purchases of property and equipment of $14.9 million.
As of each of the years ended December 31, 2024 and 2023, approximately 83% of our customers were using more than one product.
Approximately 84% of our customers were using two or more products as of December 31, 2025, consistent with approximately 83% a year earlier.
Removed
Convertible Senior Notes In December 2024, we completed a private offering of $1.0 billion aggregate principal amount of the 2029 Notes. The total proceeds from the 2029 Notes offering were approximately $979.1 million, net of $20.9 million of debt issuance costs.
Added
For example, macroeconomic events including changes in trade policies, such as trade wars, tariffs or other trade restrictions or the threat of such actions, fluctuating inflation and interest rates, and the conflicts in Ukraine and the Middle East have led to economic uncertainty.
Removed
We used a portion of the net proceeds from the offering (i) to pay the $100.9 million cost of the privately negotiated capped call transactions relating to the 2029 Notes, or the Capped Calls and (ii) to repurchase for $196.8 million in privately negotiated transactions approximately $112.0 million in aggregate principal amount of the 2025 Notes, including accrued and unpaid interest.
Added
However, in some cases where they have separate billing terms, we may count separate divisions, segments or subsidiaries as multiple customers. 47 Expanding Within Our Existing Customer Base Our base of customers represents a significant opportunity for further sales expansion.
Removed
Refer to Note 8, Convertible Senior Notes , to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for further details. Factors Affecting Our Performance Acquiring New Customers We believe there is substantial opportunity to continue to grow our customer base.
Added
These increases were partially offset by an increase in proceeds from maturities of marketable securities of $468.8 million and an increase in proceeds from the sale of marketable securities of $30.9 million.
Removed
Usage is measured primarily by the number of hosts or by the volume of data indexed. A host is generally defined as a server, either in the cloud or on-premise. Our infrastructure monitoring, APM and network performance monitoring products are priced per host, our logs product is priced primarily per log events indexed and secondarily by events ingested.
Added
In January 2025, the Company completed an assessment of the useful life of its capitalized software development costs, resulting in an increase in the estimated useful life of capitalized software development costs from two to three years. This change in accounting estimate was effective beginning fiscal year 2025.
Removed
Customers also have the option to purchase additional products, such as additional container or serverless monitoring, custom metrics packages, anomaly detection, synthetic monitoring and app analytics.
Removed
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. The principal and future interest payments related to our 2025 Notes and 2029 Notes are $635.9 million and $1.0 billion, respectively.
Removed
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.
Removed
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.
Removed
The increase in cash provided by operating activities was partially offset by a decrease in deferred revenue of $33.4 million, a decrease in accounts payable of $32.2 million, and an increase in prepaid expenses and other current assets of $13.1 million.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

7 edited+1 added−0 removed3 unchanged
Biggest changeTo date, we have not entered into any hedging arrangements with respect to foreign currency risk or other derivative financial instruments, although we may choose to do so in the future. A hypothetical 10% increase or decrease in the relative value of the U.S. dollar to other currencies would not have a material effect on our operating results. 56
Biggest changeA hypothetical 10% increase or decrease in the relative value of the U.S. dollar to other currencies would not have a material effect on our operating results. 58
All of our sales are denominated in U.S. dollars, and therefore our revenue is not currently subject to significant foreign currency risk. Our operating expenses are denominated in the currencies of the countries in which our operations are located, which are primarily in the United States, France, Ireland, and the United Kingdom.
All of our sales are denominated in U.S. dollars, and therefore our revenue is not currently subject to significant foreign currency risk. Our operating expenses are denominated in the currencies of the countries in which our operations are located, which are primarily in the United States, France, and Ireland.
Additionally, we carry the Notes at face value less unamortized issuance costs on our balance sheet, and we present the fair value for required disclosure purposes only. 55 Foreign Currency Exchange Risk Our reporting currency and the functional currency of our wholly owned foreign subsidiaries is the U.S. dollar.
Additionally, we carry the 2029 Notes at face value less unamortized issuance costs on our balance sheet, and we present the fair value for required disclosure purposes only. Foreign Currency Exchange Risk Our reporting currency and the functional currency of our wholly owned foreign subsidiaries is the U.S. dollar.
The interest and market value changes affect the fair value of the Notes but do not impact our financial position, cash flows, or results of operations due to the fixed nature of the debt obligation.
The interest and market value changes affect the fair value of the 2029 Notes but do not impact our 57 financial position, cash flows, or results of operations due to the fixed nature of the debt obligation.
The fair value of the Notes are subject to interest rate risk, market risk and other factors due to the conversion feature. The fair value of the Notes will generally increase as our Class A common stock price increases and will generally decrease as our Class A common stock price declines.
The fair value of the 2029 Notes is subject to interest rate risk, market risk and other factors due to the conversion feature. The fair value of the 2029 Notes will generally increase as our Class A common stock price increases and will generally decrease as our Class A common stock price declines.
Our market risk exposure is primarily the result of fluctuations in interest rates and foreign currency exchange rates. Interest Rate Risk As of December 31, 2024, we had $1.2 billion in cash equivalents, and $2.9 billion in marketable securities, which consisted of corporate debt securities, commercial paper, certificates of deposit, U.S. government treasury securities, and U.S. government agency securities.
Our market risk exposure is primarily the result of fluctuations in interest rates and foreign currency exchange rates. Interest Rate Risk As of December 31, 2025, we had $0.3 billion in cash equivalents, and $4.1 billion in marketable securities, which consisted of corporate debt securities, commercial paper, certificates of deposit, U.S. government treasury securities, and U.S. government agency securities.
As of December 31, 2024, a hypothetical 10% relative change in interest rates would not have a material impact on our consolidated financial statements. In June 2020 and December 2024, we issued $747.5 million and $1.0 billion aggregate principal amount of the 2025 Notes and 2029 Notes, respectively.
As of December 31, 2025, a hypothetical 10% relative change in interest rates would not have a material impact on our consolidated financial statements. In December 2024, we issued $1.0 billion aggregate principal amount of the 2029 Notes.
Added
For the fiscal year 2025, we have not entered into any hedging arrangements with respect to foreign currency risk or other derivative financial instruments, although we may choose to do so in the future.