Datadog, Inc.

Datadog operates in the IT Operations Management market, which according to Gartner represents an $82 billion ¹ opportunity in 2029. Within this market, the Gartner Health and Performance Analytics (Observability) market represents a $39 billion ² opportunity in 2029. The company has also expanded its platform into certain segments of Gartner's Security Software, Application Development, and Analytic Platforms markets, and believes the markets it participates in across these categories in total represent a $187 billion ³ market opportunity in 2029. Datadog's 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 customers' entire technology stack.

Datadog competes with diversified technology companies and systems management vendors including IBM, Microsoft Corporation, and SolarWinds Corporation in on-premise infrastructure monitoring; with Cisco Systems, Inc., New Relic, Inc., and Dynatrace Software Inc. in APM; with Cisco Systems, Inc. and Elastic N.V. in Log Management; and with native solutions from cloud providers such as Amazon Web Services, Microsoft Azure, and Google Cloud Platform in cloud monitoring. The company also competes with home-grown and open-source technologies. As of December 31, 2025, Datadog had approximately 32,700 ⁴ customers in over 160 ⁵ countries, and approximately 4,310 ⁶ customers with annual run-rate revenue of $100,000 or more, representing 90% ⁷ of its ARR, up from 3,610 ⁸ as of December 31, 2024, representing 88% ⁹ of its ARR. As of December 31, 2025, approximately 84% ¹⁰ of customers were using two or more products, approximately 55% ¹¹ were using four or more products, approximately 33% ¹² were using six or more products, approximately 18% ¹³ were using eight or more products, and approximately 9% ¹⁴ were using ten or more products.

Datadog generates revenue from the sale of subscriptions to customers using its cloud-based platform. The terms of its subscription agreements are primarily monthly or annual, with some quarterly, semiannual and multi-year. Customers can enter into a subscription for a committed contractual amount of usage that is apportioned ratably on a monthly basis, a subscription for a committed contractual amount of usage that is delivered as used, or a monthly subscription based on usage. The company employs a land-and-expand business model centered around offering products that are easy to adopt with a very short time to value, and customers can expand their footprint on a self-service basis. Substantially all of the company's revenue is from subscription software sales, and professional services revenue has been immaterial to date.

Datadog's platform includes Infrastructure Monitoring, which provides real-time monitoring of IT infrastructure across public cloud, private cloud and hybrid environments; Application Performance Monitoring (APM), which provides full visibility into the health and functioning of applications with code-level distributed tracing; Log Management, which ingests data, creates indexes and enables querying of logs with visualizations and alerting; and Observability Pipelines, which enables IT and security teams to collect, transform, and route logs, metrics, and traces at scale. The platform also includes Synthetics for user-experience monitoring via simulated AI-powered user requests; Real User Monitoring (RUM) for analysis of web browser and mobile application performance; Product Analytics, which provides a complete picture of product, user, and performance data; Continuous Profiler for code level performance measurement; Database Monitoring for viewing query metrics and explain plans; Data Observability consisting of Data Streams Monitoring and Data Jobs Monitoring; LLM Observability for end-to-end tracing of LLM chains; Error Tracking for intelligently grouping errors; Network Monitoring for analyzing network traffic flow; Incident Response for unifying monitoring, paging, and incident management; Workflow Automation and App Builder for automating processes; Event Management for aggregating and consolidating alerts using AI; Bits AI SRE, an always-on AI-enabled SRE agent; Cloud Cost Management for granular visibility into costs; Cloud Security for agentless infrastructure scanning; Code Security for runtime-based vulnerability prioritization; Cloud SIEM for detecting and investigating threats; Threat Management including Workload Protection and App & API Protection; Sensitive Data Scanner for discovering and redacting sensitive data; and CI Visibility for insight into CI environment health and performance.

In 2025, Datadog 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. During the year ended December 31, 2025, the company entered into three purchase agreements for acquisitions of businesses, with a total purchase price in aggregate of $178.4 million ¹⁵ consisting of $109.3 million ¹⁶ in cash payments, net of cash acquired, $16.1 million ¹⁷ of deferred acquisition holdback payments and the issuance of 770,044 ¹⁸ restricted shares of Class A common stock. In connection with the maturity of the 2025 Notes, the company issued 1,354,569 ¹⁹ shares to holders that converted prior to maturity and received 1,360,738 ²⁰ shares from the relevant option counterparties upon settlement of the Capped Calls. As of December 31, 2025, the company owned 43 ²¹ patents globally, had 18 ²² patent applications pending for examination in the United States, 3 ²³ pending PCT applications, and 3 ²⁴ pending foreign patent applications, and owned 11 ²⁵ registered trademarks in the United States and 127 ²⁶ registered trademarks in various non-U.S. jurisdictions.

Revenue for the fiscal year ended December 31, 2025 was $3,427.2 million ²⁷, compared to $2,684.3 million ²⁸ for the fiscal year ended December 31, 2024, representing year-over-year growth of 28% ²⁹. Net income was $107.7 million ³⁰ for fiscal 2025, compared to $183.7 million ³¹ for fiscal 2024. Operating cash flow was $1,050.1 million ³² for fiscal 2025, compared to $870.6 million ³³ for fiscal 2024. Free cash flow was $914.7 million ³⁴ for fiscal 2025, compared to $775.1 million ³⁵ for fiscal 2024. Gross margin was 80% ³⁶ for fiscal 2025, compared to 81% ³⁷ for fiscal 2024. As of December 31, 2025, the company had $401.3 million ³⁸ in cash and cash equivalents and $4,073.5 million ³⁹ in marketable securities.

Datadog intends to expand its customer base by acquiring new customers through expanded sales and marketing efforts in the markets it serves. The company also plans to expand within its existing customer base through broader deployments, new use cases and new product adoption, noting its base of approximately 32,700 ⁴⁰ customers as of December 31, 2025 represents a significant opportunity for further sales expansion. The company intends to continue to invest in expanding the functionality of its current platform and adding capabilities that address new market opportunities, citing a history of continued innovation with product launches including OnCall, Product Analytics, and Bits AI SRE in 2025.

Datadog plans to expand its customer base internationally, believing there is a significant opportunity to continue to expand usage of its platform outside of the United States as international markets have increased the shift of their IT spend to the cloud. Revenue from regions outside of North America was approximately 29% ⁴¹ of total revenue for each of the years ended December 31, 2025 and 2024. The company has made and plans to continue to make significant investments to expand geographically, particularly in EMEA and APAC, and has a sales presence internationally in Amsterdam, Dublin, London, Paris, Seoul, Singapore, Sydney, and Tokyo.

The filing does not contain specific margin trajectory or efficiency targets for the upcoming period.

The filing does not contain a specific operational outlook regarding supply chain, manufacturing capacity, or headcount strategy for the upcoming period.

The company intends to continue to invest in research and development to extend its platform and products, and in sales and marketing to capitalize on its market opportunity. As of December 31, 2025, the company had approximately 3,900 ⁴² employees in its research and development organization and approximately 3,600 ⁴³ employees in its sales and marketing organization. The filing does not provide specific R&D spending levels, capital expenditure plans, share repurchase authorization amounts, or dividend policy for the upcoming period.

The filing identifies several headwinds and constraints, including unfavorable conditions in the industry or global economy and reductions in information technology spending that could limit the company's ability to grow. The company notes that its recent rapid growth may not be indicative of future growth and that its revenue growth rate is expected to decline in the future as a result of factors including the maturation of its business. The filing also notes that certain customers and cohorts, particularly in the AI-native cohort which included the company's largest customer and represented approximately seven percentage points ⁴⁴ of year-over-year revenue growth for the quarter ended December 31, 2025, have rapidly increased usage and then optimized or may in the future optimize their usage or fail to renew subscriptions.

The filing identifies structural headwinds including the impact of macroeconomic events such as changes in trade policies, tariffs, fluctuating inflation and interest rates, and conflicts in Ukraine and the Middle East, which have led to economic uncertainty and could cause businesses to slow spending on information technology. The company also notes that interest rates remain elevated, which may dampen economic growth and cause companies to moderate spending on information technology.

The company's business depends on existing customers purchasing additional subscriptions and renewing, and if customers do not renew or expand their subscriptions, or decrease their spend, future operating results would be harmed. The filing notes that customers in the AI-native cohort, which included the company's largest customer and represented approximately seven percentage points ⁴⁵ of year-over-year revenue growth for the quarter ended December 31, 2025, have rapidly increased usage and then optimized or may in the future optimize their usage or fail to renew. The company has a history of operating losses and may not sustain profitability in the future, having incurred a net loss of $(50.2) million ⁴⁶ in the year ended December 31, 2022. The company relies upon third-party providers of cloud-based infrastructure to host its products, and any disruption in the operations of these providers could adversely affect the business. The company faces intense competition from diversified technology companies including IBM, Microsoft Corporation, SolarWinds Corporation, Cisco Systems, Inc., New Relic, Inc., Dynatrace Software Inc., Elastic N.V., and native solutions from cloud providers such as AWS, Microsoft Azure, and GCP.

Management's message emphasizes that Datadog is the AI-powered observability and security platform for cloud applications, and that the company was founded to break down silos between Dev and Ops. The filing highlights that in 2025, the company launched OnCall, Product Analytics, and Bits AI SRE Agent. Management's strategic priorities for the period ahead include expanding the customer base by acquiring new customers, expanding within the existing customer base through broader deployments and new product adoption, expanding technology leadership through continued investment and new products, and expanding the customer base internationally.