In Q4 2023, the jump in operating cash flow was driven by several key factors. **Non-cash charges** saw a substantial increase—most notably, **stock-based compensation** rose by **$119.1 million**. In addition, **deferred revenue** grew by **$62.3 million** due to strengthened customer commitments, and **accounts payable** increased by **$59.1 million**, which together helped boost cash flow. Moreover, effective **cost management and optimization efforts** further enhanced the cash flow efficiency during this period.  **[0001561550-24-000009_ddog-20231231.htm:103]** **[DDOG_3373058_6]** **[0001561550-24-000009_ddog-20231231.htm:92]** 

Why did operating cash flow jump in Q4 2023?

The significant increase in **operating cash flow** for **FY 2023** was primarily driven by an increase in **non-cash charges** (including a **$119.1 million** rise in stock-based compensation contributing to an overall **$104.6 million** increase), a **$62.3 million** uptick in **deferred revenue** from higher customer prepayments, and a **$59.1 million** increase in **accounts payable**, which were partly offset by a **$78.1 million** decrease in accrued expenses and other liabilities.  **[0001561550-24-000009_ddog-20231231.htm:92]** 

What drove the increase in operating cash flow in FY 2023?

The documents do not provide specific reasons for the higher capital expenditures in Q1 2024. They only indicate that Purchases of property and equipment increased from **$8,739 thousand** in Q1 2023 to **$14,158 thousand** in Q1 2024, without any additional context or commentary on the factors driving this change.  **[20240507NY06290:7]** **[0001561550-24-000048_ex-991x20240331x8k.htm:9]** **[0001561550-24-000051_ddog-20240331.htm:35]** 

Why were capital expenditures significantly higher in Q1 2024?

The dip in operating cash flow in Q2 2024 was mainly due to **negative working capital changes**. Although there was an increase in non‑cash charges (driven predominantly by a **$38.6 million increase in stock‑based compensation**) and a **$28.2 million rise in accrued expenses and other current liabilities**, these were offset by **a significant $90.7 million increase in accounts receivable**, along with a **$10.4 million decrease in deferred revenue** and a **$8.4 million increase in prepaid expenses and other current assets**.  **[0001561550-24-000112_ddog-20240630.htm:40]** 

What contributed to the dip in operating cash flow in Q2 2024?

The documents do not provide **specific reasons** for the massive loss on disposal of property and equipment in **Q2 2024**. It is generally noted, however, that such losses typically arise when assets are disposed of at values **lower than their book values**. Other potential factors mentioned include a **change in the number of disposals**, differences in asset management, or **higher residual values** of disposed assets, but no definitive causal details are provided.  **[0001561550-24-000109_ex-991x20240630x8k.htm:9]** 

What caused the massive loss on disposal of property and equipment in Q2 2024?

25b925127e09ef2916966c969e0e6184eaca219c30f63aa01e8ea81f54e472f4

The **Cash and Cash Equivalents** decreased to **282,218 thousand USD in Q1 2024** because, although Datadog generated **212,270 thousand USD** from operating activities and **2,191 thousand USD** from financing activities, it used **261,208 thousand USD** in investing activities—primarily for purchases of marketable securities—which resulted in the net decline in cash balances.  **[0001561550-24-000051_ddog-20240331.htm:4]** **[0001561550-24-000048_ex-991x20240331x8k.htm:6]** **[0001561550-24-000051_ddog-20240331.htm:34]** 

Why did Cash and cash equivalents drop to 282,218 in Q1 2024?

The jump to **410,963 thousand** in Q2 2024 was primarily driven by a significant boost in **operating activities**, which provided **376,694 thousand** in net cash. This increase was largely due to higher non-cash charges like stock-based compensation and increases in accrued expenses and other current liabilities. In addition, a reduction in investing outflows from decreased purchases of marketable securities (net cash used of **320,919 thousand**) and positive financing inflows of **26,426 thousand** also helped contribute to this increase.  **[0001561550-24-000112_ddog-20240630.htm:40]** 

What drove the jump in Cash and cash equivalents to 410,963 in Q2 2024?

The increase in total assets to **4,631,471** in Q3 2024 was driven by several factors. **Marketable securities** saw a significant rise from **2,252,559** to **2,861,536**, substantially boosting the asset base. Additionally, **property and equipment, net** increased from **171,872** to **215,810**, and **operating lease assets** grew from **126,562** to **168,610**, indicating investments in both physical assets and lease agreements. Moreover, there was growth in **deferred contract costs**, with current deferred contract costs rising from **44,938** to **52,225** and non-current deferred contract costs increasing from **73,728** to **79,996**, reflecting higher costs associated with securing contracts.  **[0001561550-24-000171_ex-991x20240930x8k.htm:7]** **[0001561550-24-000175_ddog-20240930.htm:4]** 

What factors contributed to Total Assets reaching 4,631,471 in Q3 2024?

The **Convertible senior notes** were reclassified from non-current to current liabilities because they are approaching their maturity in **2025**. This reclassification moved them onto the current liabilities section, resulting in the recorded amount of **$743,970 thousand** for **Q2 2024**.  **[0001561550-24-000112_ddog-20240630.htm:15]** **[20240808NY78822:6]** 

Why were Convertible senior notes introduced at 743,970 in Q2 2024?

The drop in intangible assets to **$4,424 thousand in Q3 2024** was primarily driven by significant **amortization of intangible assets**, which led to a reduction in the net carrying amounts. Specifically, Datadog recorded an amortization expense of approximately **$1.4 million** for Q3 2024, and there were no significant additions during the period to counteract this impact. Furthermore, the net carrying value of **developed technology** decreased from **$8,567 thousand to $3,991 thousand** and **customer relationships** dropped from **$1,050 thousand to $433 thousand**, which contributed to the overall decrease in total intangible assets.  **[0001561550-24-000175_ddog-20240930.htm:11]** 

What caused the drop in Intangible assets to 4,424 in Q3 2024?

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The turnaround in Q4 2023 was driven by **strong revenue growth**—with revenue up **26% year-over-year** to **$589.6 million**—along with **effective cost management** and operational improvements that boosted operating margins (GAAP margin of **5%** and non-GAAP margin of **28%**). These factors helped offset the increase in operating expenses, resulting in the shift from an operating loss to an operating income of **$27.7 million**.  **[DDOG_3373058_6]** **[0001561550-24-000004_ex-991x20231231x8k.htm:0]** **[0001561550-24-000004_ex-991x20231231x8k.htm:7]** 

What drove the turnaround in Operating Income in Q4 2023?

The spike in the provision for income taxes in **Q4 2023** was primarily due to a dramatic shift in the company's financial performance. **Datadog's income before income taxes increased significantly**, moving from a loss in previous periods to a profit of **$60,235 thousand**, which substantially increased its taxable income. Additionally, the impact of **foreign taxes**, which contributed **$9,377 thousand**, and the decision to record a **full valuation allowance on its deferred tax assets**—reflecting uncertainties about the future realization of these benefits—further intensified the tax provision. While **U.S. R&D tax credits** reduced the provision by **$(2,973) thousand**, this benefit was not enough to offset the overall increase in the tax liability.  **[0001561550-24-000009_ddog-20231231.htm:88]** **[0001561550-24-000009_ddog-20231231.htm:100]** **[0001561550-24-000009_ddog-20231231.htm:131]** **[0001561550-24-000051_ddog-20240331.htm:21]** 

Why did the Provision for Income Taxes spike in Q4 2023?

The **jump in Net Income for Q4 2023** was largely driven by a combination of factors including **strong revenue growth** (with revenues up **26% year-over-year** reaching **$590 million**), **improved operating margins** (reflected by a GAAP Operating Income of **$27.7 million** and a Non-GAAP Operating Margin that increased from **18% to 28%**), and enhanced financial benefits from **other income** such as **higher interest income** on marketable securities. Additionally, the reduction in customer optimization efforts and gains from favorable foreign exchange and marketable securities adjustments further contributed to this significant improvement.  **[DDOG_3373058_1]** **[0001561550-24-000004_ex-991x20231231x8k.htm:0]** **[DDOG_3373058_5]** **[DDOG_3373058_6]** **[0001561550-24-000004_ex-991x20231231x8k.htm:11]** **[0001561550-24-000009_ddog-20231231.htm:91]** 

What contributed to the jump in Net Income in Q4 2023?

The revenue growth in Q3 2024 was primarily fueled by **growth from existing customers (accounting for about 75% of the increase)** and **new customer acquisitions (contributing the remaining 25%)**. Additional drivers included the **adoption of AI and newer product offerings**, which saw a broader impact on the revenue mix, along with **strong growth among enterprise customers (with notable increases in high ARR customers)**, and overall **platform expansion** marked by increased multi-product usage by customers.  **[0001561550-24-000175_ddog-20240930.htm:37]** **[DDOG_3406594_4]** **[DDOG_3406594_1]** **[0001561550-24-000171_ex-991x20240930x8k.htm:0]** 

What fueled the Revenue growth in Q3 2024?

192fb37ef5dde8f4ac849e13bdf13784be31ba7a3e06c30511f288ede5ed006f

e340e6117fc70c25d00f29a2379edd5eaa98fd715e68a9e40c128a5e6a69b126

Revenue (USD, thousands)

Cost of revenue (USD, thousands)

Gross profit (USD, thousands)

Research and development expenses (USD, thousands)

Sales and marketing expenses (USD, thousands)

General and administrative expenses (USD, thousands)

Total operating expenses (USD, thousands)

Operating income (loss) (USD, thousands)

Interest expense (USD, thousands)

Interest income and other income, net (USD, thousands)

Other income, net (USD, thousands)

Income (loss) before provision for income taxes (USD, thousands)

Provision for income taxes (USD, thousands)

Net income (loss) (USD, thousands)

0f353b23b5a3a9d8875d2a10fd2b85ba763395950c3269cbd2de4341e9ad1bba

5cd58ee1a562666761a967b8ca207b93884d9f4ce29253b9eb03c46fa7e0ca94

Current Assets (USD, thousands)

Cash and Cash Equivalents (USD, thousands)

Accounts Receivable (USD, thousands)

Inventory (USD, thousands)

Non-Current Assets (USD, thousands)

Property, Plant, and Equipment (PP&E) (USD, thousands)

Goodwill (USD, thousands)

Intangible Assets (USD, thousands)

Current Liabilities (USD, thousands)

Accounts Payable (USD, thousands)

Short-term Debt (USD, thousands)

Accrued Expenses (USD, thousands)

Non-Current Liabilities (USD, thousands)

Long-term Debt (USD, thousands)

Lease Liabilities (USD, thousands)

Deferred Tax Liabilities (USD, thousands)

Shareholders' Equity (USD, thousands)

Retained Earnings (USD, thousands)

Common Stock (USD, thousands)

Additional Paid-in Capital (USD, thousands)

187a26e49cfab39cf7e1e19484399041abd93370955c8881d5e76ea3c3875adc

Total Revenue (USD, thousands)

Cost of Goods Sold (COGS) (USD, thousands)

SG&A (USD, thousands)

Research and Development (R&D) (USD, thousands)

Depreciation and Amortization (D&A) (USD, thousands)

Interest Expense (USD, thousands)

Operating Income (EBIT) (USD, thousands)

Net Income (USD, thousands)

EPS - Basic (USD)

EPS - Diluted (USD)

7b8caa608134745959244d54279ea8e4d94f8fd7bb27d52dfb5b2b4fb293d750

Adjustments for Non-Cash Items (USD, thousands)

Stock-Based Compensation (USD, thousands)

Changes in Working Capital (USD, thousands)

Capital Expenditures (CapEx) (USD, thousands)

Proceeds from / Repayments of Debt (USD, thousands)

Share Repurchases (USD, thousands)

Dividend Payments (USD, thousands)

Net Change in Cash (USD, thousands)

29f0e96f12afedc871a266bbb5178071691313c34975ec18f5f1aea2b46d8c0d

North America

- United States

International

Total Revenue

ac254b9ba742640ba43a236c122aded76b20fe5cbdd60f7d1f3ce76988493617

Number of customers (count)

Number of customers with ARR of $100,000 or more (count)

Percentage of ARR from customers with ARR of $100,000 or more (percentage)

Percentage of customers using more than one product (percentage)

Percentage of customers using more than four products (percentage)

Percentage of customers using more than six products (percentage)

Percentage of customers using more than eight products (percentage)

dcf1b85a1bd0f6ca083733cd9d2a2d29d3b49a67b8cb0a2ac7ed57047726ff5f

Datadog (DDOG)

Financials