Technology

Datadog Announces Second Quarter 2024 Financial Results

Published

2 years ago

August 8, 2024

Second quarter revenue grew 27% year-over-year to $645 million

Strong growth of larger customers, with about 3,390 $100k+ ARR customers, up from about 2,990 a year ago

Announced general availability of LLM Observability

Announced innovations for Generative AI, Observability, Cloud Security, Product Analytics, Software Delivery, and Cloud Service Management at DASH 2024

NEW YORK, Aug. 8, 2024 /PRNewswire/ — Datadog, Inc. (NASDAQ:DDOG), the monitoring and security platform for cloud applications, today announced financial results for its second quarter ended June 30, 2024.

“Datadog executed well in the second quarter, with 27% year-over-year revenue growth, continued customer growth, and expanding multi-product adoption across our platform,” said Olivier Pomel, co-founder and CEO of Datadog.

Pomel added, “At our DASH 2024 user conference, we announced dozens of new products and capabilities, delivering innovations to help our customers observe their environments, secure their infrastructures and workloads, and act to remediate problems before they affect users.”

Second Quarter 2024 Financial Highlights:

Revenue was $645 million, an increase of 27% year-over-year.GAAP operating income was $13 million; GAAP operating margin was 2%.Non-GAAP operating income was $158 million; non-GAAP operating margin was 24%.GAAP net income per diluted share was $0.12; non-GAAP net income per diluted share was $0.43.Operating cash flow was $164 million, with free cash flow of $144 million.Cash, cash equivalents, and marketable securities were $3.0 billion as of June 30, 2024.

Second Quarter & Recent Business Highlights:

As of June 30, 2024, we had about 3,390 customers with ARR of $100,000 or more, an increase of 13% from about 2,990 as of June 30, 2023.Announced that Yanbing Li joined as Chief Product Officer. Li has more than 25 years of product, technology and engineering experience, having led global engineering, operations and infrastructure teams at Aurora, Google and VMware.Announced that David Galloreese joined as Chief People Officer. Galloreese has more than 20 years of human resources experience at tech companies and large-scale, high visibility brands, like Figma, Wells Fargo, and Walmart.Announced new additions to our security product portfolio, including Agentless Scanning, Data Security and Code Security, which allow security teams to easily secure their code, cloud environments and production applications.Announced the launch of Live Debugger, a new tool that enables developers to step through code in production environments and find the exact root cause of coding errors.Announced a unified experience integrating the Datadog Agent and OpenTelemetry Collector. With this announcement, customers can use Datadog’s fully supported Agent while accessing the complete capabilities of the OpenTelemetry Collector; onboard quickly using the existing collector configuration; and centralize the management of collectors remotely – all while benefiting from Datadog’s reliability and global support team.Announced Log Workspaces, a suite of capabilities in a powerful, collaborative space that allows analysts and engineers from all teams in an organization to connect logs and other datasets, and build multi-stage queries that allow for sophisticated analytics to answer complex questions on business, securities and application issues.Announced Datadog On-Call, a modern on-call experience with observability-enriched paging and seamless incident management workflows.Announced the general availability of LLM Observability, which allows AI application developers and machine learning engineers to efficiently monitor, improve and secure large language model applications.Announced Datadog Kubernetes Autoscaling, a set of capabilities that intelligently automates resource optimization and can automatically scale customers’ Kubernetes environments based on real-time and historical utilization metrics.Announced the general availability of Data Jobs Monitoring, a new product that helps data platform teams and data engineers detect problematic Spark and Databricks jobs anywhere in their data pipelines, remediate failed and long-running-jobs faster, and optimize over-provisioned compute resources to reduce costs.Announced the general availability of Datadog App Builder, a low-code development tool that helps teams rapidly create self-service applications and integrate them securely into their monitoring stacks.Released its State of Cloud Costs 2024 report. The report found organizations that use graphics processing unit (GPU) instances have increased their average spending on those instances by 40% in the last year.

Third Quarter and Full Year 2024 Outlook:

Based on information as of today, August 8, 2024, Datadog is providing the following guidance:

Third Quarter 2024 Outlook:Revenue between $660 million and $664 million.Non-GAAP operating income between $146 million and $150 million.Non-GAAP net income per share between $0.38 and $0.40, assuming approximately 360 million weighted average diluted shares outstanding.Full Year 2024 Outlook:Revenue between $2.62 billion and $2.63 billion.Non-GAAP operating income between $620 million and $630 million.Non-GAAP net income per share between $1.62 and $1.66, assuming approximately 360 million weighted average diluted shares outstanding.

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

Conference Call Details:

What: Datadog financial results for the second quarter of 2024 and outlook for the third quarter and the full year 2024When: August 8, 2024 at 8:00 A.M. Eastern Time (5:00 A.M. Pacific Time)Dial in: To access the call in the U.S., please register here. Callers are encouraged to dial into the call 10 to 15 minutes prior to the start to prevent any delay in joining.Webcast: https://investors.datadoghq.com (live and replay)Replay: A replay of the call will be archived on the investor relations website

About Datadog

Datadog is the 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. Datadog is used by organizations of all sizes and across a wide range of industries to enable digital transformation and cloud migration, drive collaboration among development, operations, security and business teams, accelerate time to market for applications, reduce time to problem resolution, secure applications and infrastructure, understand user behavior, and track key business metrics.

Forward-Looking Statements

This press release and the earnings call referencing this press release contain “forward-looking” statements, as that term is defined under the federal securities laws, including but not limited to statements regarding Datadog’s strategy, product and platform capabilities, the growth in and ability to capitalize on long-term market opportunities including the pace and scope of cloud migration and digital transformation, gross margins and operating margins including with respect to sales and marketing, research and development expenses, net interest and other income, cash taxes, investments and capital expenditures, and Datadog’s future financial performance, including its outlook for the third quarter and the full year 2024 and related notes and assumptions. These forward-looking statements are based on Datadog’s current assumptions, expectations and beliefs and are subject to substantial risks, uncertainties, assumptions and changes in circumstances that may cause Datadog’s actual results, performance or achievements to differ materially from those expressed or implied in any forward-looking statement.

The risks and uncertainties referred to above include, but are not limited to (1) our recent rapid growth may not be indicative of our future growth; (2) our history of operating losses; (3) our limited operating history; (4) our dependence on existing customers purchasing additional subscriptions and products from us and renewing their subscriptions; (5) our ability to attract new customers; (6) our ability to effectively develop and expand our sales and marketing capabilities; (7) risk of a security breach; (8) risk of interruptions or performance problems associated with our products and platform capabilities; (9) our ability to adapt and respond to rapidly changing technology or customer needs; (10) the competitive markets in which we participate; (11) risks associated with successfully managing our growth; and (12) general market, political, economic, and business conditions including concerns about reduced economic growth and associated decreases in information technology spending. These risks and uncertainties are more fully described in our filings with the Securities and Exchange Commission (SEC), including in the section entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 24, 2024. Additional information will be made available in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2024 and other filings and reports that we may file from time to time with the SEC. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, we cannot guarantee future results, levels of activity, performance, achievements, or events and circumstances reflected in the forward-looking statements will occur. Forward-looking statements represent our beliefs and assumptions only as of the date of this press release. We disclaim any obligation to update forward-looking statements.

About Non-GAAP Financial Measures

Datadog discloses the following non-GAAP financial measures in this release and the earnings call referencing this press release: non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses (research and development, sales and marketing and general and administrative), non-GAAP operating income (loss), non-GAAP operating margin, non-GAAP net income (loss), non-GAAP net income (loss) per diluted share, non-GAAP net income (loss) per basic share, free cash flow and free cash flow margin. Datadog uses each of these non-GAAP financial measures internally to understand and compare operating results across accounting periods, for internal budgeting and forecasting purposes, for short- and long-term operating plans, and to evaluate Datadog’s financial performance. Datadog believes they are useful to investors, as a supplement to GAAP measures, in evaluating its operational performance, as further discussed below. Datadog’s non-GAAP financial measures may not provide information that is directly comparable to that provided by other companies in its industry, as other companies in its industry may calculate non-GAAP financial results differently, particularly related to non-recurring and unusual items. In addition, there are limitations in using non-GAAP financial measures because the non-GAAP financial measures are not prepared in accordance with GAAP and may be different from non-GAAP financial measures used by other companies and exclude expenses that may have a material impact on Datadog’s reported financial results.

Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. A reconciliation of the historical non-GAAP financial measures to their most directly comparable GAAP measures has been provided in the financial statement tables included below in this press release.

Datadog defines non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses (research and development, sales and marketing and general and administrative), non-GAAP operating income (loss), non-GAAP operating margin and non-GAAP net income (loss) as the respective GAAP balances, adjusted for, as applicable: (1) stock-based compensation expense; (2) the amortization of acquired intangibles; (3) employer payroll taxes on employee stock transactions; (4) amortization of issuance costs; and (5) an assumed provision for income taxes based on our long-term projected tax rate. Our estimated long-term projected tax rate is subject to change for a variety of reasons, including the rapidly evolving global tax environment, significant changes in Datadog’s geographic earnings mix, or other changes to our strategy or business operations. We will re-evaluate our long-term projected tax rate as appropriate. Datadog defines free cash flow as net cash provided by operating activities, minus capital expenditures and minus capitalized software development costs, if any. Investors are encouraged to review the reconciliation of these historical non-GAAP financial measures to their most directly comparable GAAP financial measures.

Management believes these non-GAAP financial measures are useful to investors and others in assessing Datadog’s operating performance due to the following factors:

Stock-based compensation. Datadog utilizes stock-based compensation to attract and retain employees. It is principally aimed at aligning their interests with those of its stockholders and at long-term retention, rather than to address operational performance for any particular period. As a result, stock-based compensation expenses vary for reasons that are generally unrelated to financial and operational performance in any particular period.

Amortization of acquired intangibles. Datadog views amortization of acquired intangible assets as items arising from pre-acquisition activities determined at the time of an acquisition. While these intangible assets are evaluated for impairment regularly, amortization of the cost of acquired intangibles is an expense that is not typically affected by operations during any particular period.

Employer payroll taxes on employee stock transactions. Datadog excludes employer payroll tax expense on equity incentive plans as these expenses are tied to the exercise or vesting of underlying equity awards and the price of Datadog’s common stock at the time of vesting or exercise. As a result, these taxes may vary in any particular period independent of the financial and operating performance of Datadog’s business.

Amortization of issuance costs. In June 2020, Datadog issued $747.5 million of convertible senior notes due 2025, which bear interest at an annual fixed rate of 0.125%. Debt issuance costs, which reduce the carrying value of the convertible debt instrument, are amortized as interest expense over the term. The expense for the amortization of debt issuance costs is a non-cash item, and we believe the exclusion of this interest expense will provide for a more useful comparison of our operational performance in different periods.

Additionally, Datadog’s management believes that the non-GAAP financial measure free cash flow is meaningful to investors because it is a measure of liquidity that provides useful information in understanding and evaluating the strength of our liquidity and future ability to generate cash that can be used for strategic opportunities or investing in our business. Free cash flow represents net cash provided by operating activities, reduced by capital expenditures and capitalized software development costs, if any. The reduction of capital expenditures and amounts capitalized for software development facilitates comparisons of Datadog’s liquidity on a period-to-period basis and excludes items that management does not consider to be indicative of our liquidity.

Operating Metrics

Datadog’s number of customers with ARR of $100,000 or more is based on the ARR of each customer, as of the last month of the quarter.

We define the number of customers as the number of accounts with a unique account identifier for which we have an active subscription in the period indicated. Users of our free trials or tier are not included in our customer count. A single organization with multiple divisions, segments or subsidiaries is generally counted as a single customer. However, in some cases where they have separate billing terms, we may count separate divisions, segments or subsidiaries as multiple customers.

We define ARR as the annualized revenue run-rate of subscription agreements from all customers at a point in time. We calculate ARR by taking the monthly recurring revenue, or MRR, and multiplying it by 12. MRR for each month is calculated by aggregating, for all customers during that month, monthly revenue from committed contractual amounts, additional usage, usage from subscriptions for a committed contractual amount of usage that is delivered as used, and monthly subscriptions. ARR and MRR should be viewed independently of revenue, and do not represent our revenue under GAAP on a monthly or annualized basis, as they are operating metrics that can be impacted by contract start and end dates and renewal rates. ARR and MRR are not intended to be replacements or forecasts of revenue.

Datadog, Inc.

Condensed Consolidated Statements of Operations

(In thousands, except per share data; unaudited)

Three Months Ended

June 30,

Six Months Ended

June 30,

2024

2023

2024

2023

Revenue

$ 645,279

$ 509,460

$ 1,256,532

$ 991,174

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

123,499

101,846

233,597

201,760

Gross profit

521,780

407,614

1,022,935

789,414

Operating expenses:

Research and development (1)(3)

274,599

239,494

544,587

468,972

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

187,005

147,455

360,886

292,426

General and administrative (1)(3)

47,558

42,671

92,848

84,992

Total operating expenses

509,162

429,620

998,321

846,390

Operating income (loss)

12,618

(22,006)

24,614

(56,976)

Other income (loss):

Interest expense (4)

(1,477)

(1,526)

(2,851)

(3,707)

Interest income and other income, net

36,652

22,624

72,215

39,351

Other income, net

35,175

21,098

69,364

35,644

Income (loss) before provision for income taxes

47,793

(908)

93,978

(21,332)

Provision for income taxes

3,969

3,061

7,523

6,723

Net income (loss)

$ 43,824

$ (3,969)

$ 86,455

$ (28,055)

Net income (loss) per share – basic

$ 0.13

$ (0.01)

$ 0.26

$ (0.09)

Net income (loss) per share – diluted

$ 0.12

$ (0.01)

$ 0.24

$ (0.09)

Weighted average shares used in calculating net income (loss) per share:

Basic

334,941

322,215

333,373

320,788

Diluted

356,740

322,215

356,650

320,788

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

Cost of revenue

$ 6,393

$ 4,157

$ 11,920

$ 7,882

Research and development

87,105

75,730

175,518

150,433

Sales and marketing

29,201

25,884

57,732

48,898

General and administrative

11,953

12,566

24,515

23,852

Total

$ 134,652

$ 118,337

$ 269,685

$ 231,065

(2) Includes amortization of acquired intangibles as follows:

Cost of revenue

$ 1,281

$ 2,064

$ 3,308

$ 4,080

Sales and marketing

205

206

410

409

Total

$ 1,486

$ 2,270

$ 3,718

$ 4,489

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

Cost of revenue

$ 68

$ 109

$ 260

$ 169

Research and development

6,589

5,360

17,408

9,953

Sales and marketing

608

1,253

2,761

2,028

General and administrative

1,521

1,143

3,578

2,108

Total

$ 8,786

$ 7,865

$ 24,007

$ 14,258

(4) Includes amortization of issuance costs as follows:

Interest expense

$ 910

$ 846

$ 1,760

$ 1,691

Total

$ 910

$ 846

$ 1,760

$ 1,691

Datadog, Inc.

Condensed Consolidated Balance Sheets

(In thousands; unaudited)

June 30,
2024

December 31,
2023

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

$ 410,963

$ 330,339

Marketable securities

2,549,143

2,252,559

Accounts receivable, net of allowance for credit losses of $12,902 and $12,096 as
of June 30, 2024 and December 31, 2023, respectively

533,292

509,279

Deferred contract costs, current

49,518

44,938

Prepaid expenses and other current assets

49,174

41,022

Total current assets

3,592,090

3,178,137

Property and equipment, net

198,911

171,872

Operating lease assets

166,941

126,562

Goodwill

350,864

352,694

Intangible assets, net

5,804

9,617

Deferred contract costs, non-current

77,040

73,728

Other assets

20,741

23,462

TOTAL ASSETS

$ 4,412,391

$ 3,936,072

LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES:

Accounts payable

$ 115,991

$ 87,712

Accrued expenses and other current liabilities

104,791

127,631

Operating lease liabilities, current

24,565

21,974

Convertible senior notes, net, current

743,970

—

Deferred revenue, current

801,562

765,735

Total current liabilities

1,790,879

1,003,052

Operating lease liabilities, non-current

193,835

138,128

Convertible senior notes, net, non-current

—

742,235

Deferred revenue, non-current

14,049

21,210

Other liabilities

6,320

6,093

Total liabilities

2,005,083

1,910,718

STOCKHOLDERS’ EQUITY:

Common stock

Additional paid-in capital

2,484,264

2,181,267

Accumulated other comprehensive loss

(9,716)

(2,218)

Accumulated deficit

(67,243)

(153,698)

Total stockholders’ equity

2,407,308

2,025,354

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$ 4,412,391

$ 3,936,072

Datadog, Inc.

Condensed Consolidated Statements of Cash Flow

(In thousands; unaudited)

Three Months Ended

June 30,

Six Months Ended

June 30,

2024

2023

2024

2023

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income (loss)

$ 43,824

$ (3,969)

$ 86,455

$ (28,055)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization

12,440

10,550

25,335

20,825

(Accretion) amortization of (discounts) premiums on marketable securities

(12,569)

(8,096)

(26,695)

(13,291)

Amortization of issuance costs

910

846

1,760

1,691

Amortization of deferred contract costs

12,450

9,348

24,294

17,996

Stock-based compensation, net of amounts capitalized

134,652

118,337

269,685

231,065

Non-cash lease expense

6,781

6,252

13,591

12,196

Allowance for credit losses on accounts receivable

3,842

2,579

6,574

6,311

Loss on disposal of property and equipment

300

333

343

421

Changes in operating assets and liabilities:

Accounts receivable, net

(86,076)

31,366

(30,586)

60,139

Deferred contract costs

(19,534)

(15,868)

(32,170)

(27,618)

Prepaid expenses and other current assets

5,632

(1,013)

(8,443)

(16,823)

Other assets

(443)

2,077

2,171

2,241

Accounts payable

48,692

6,352

31,570

24,897

Accrued expenses and other liabilities

(8,423)

(16,009)

(15,856)

(44,089)

Deferred revenue

21,946

10,073

28,666

39,039

Net cash provided by operating activities

164,424

153,158

376,694

286,945

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of marketable securities

(602,950)

(632,547)

(1,240,301)

(1,390,334)

Maturities of marketable securities

564,319

520,669

965,985

1,018,317

Proceeds from sale of marketable securities

15,292

36,633

Purchases of property and equipment

(4,415)

(2,339)

(18,573)

(11,078)

Capitalized software development costs

(16,229)

(9,087)

(27,594)

(17,798)

Cash paid for acquisition of businesses; net of cash acquired

(444)

(2,025)

(444)

(2,025)

Net cash used in investing activities

(59,711)

(110,037)

(320,919)

(366,285)

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from exercise of stock options

1,753

5,436

3,944

7,534

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

22,507

19,986

22,507

19,986

Repayments of convertible senior notes

(25)

—

(25)

—

Net cash provided by financing activities

24,235

25,422

26,426

27,520

Effect of exchange rate changes on cash, cash equivalents and restricted cash

(203)

213

(1,577)

836

NET DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH

128,745

68,756

80,624

(50,984)

CASH, CASH EQUIVALENTS AND RESTRICTED CASH—Beginning of period

282,218

222,548

330,339

342,288

CASH, CASH EQUIVALENTS AND RESTRICTED CASH—End of period

$ 410,963

$ 291,304

$ 410,963

$ 291,304

RECONCILIATION OF CASH AND CASH EQUIVALENTS WITHIN THE CONDENSED CONSOLIDATED BALANCE SHEETS TO THE AMOUNTS
SHOWN IN THE STATEMENTS OF CASH FLOWS ABOVE:

Cash and cash equivalents

$ 410,963

$ 291,304

$ 410,963

$ 291,304

Total cash and cash equivalents

$ 410,963

$ 291,304

$ 410,963

$ 291,304

Datadog, Inc.

Reconciliation from GAAP to Non-GAAP Results

(In thousands, except per share data; unaudited)

Three Months Ended

June 30,

Six Months Ended

June 30,

2024

2023

2024

2023

Reconciliation of gross profit and gross margin

GAAP gross profit

$ 521,780

$ 407,614

$ 1,022,935

$ 789,414

Plus: Stock-based compensation expense

6,393

4,157

11,920

7,882

Plus: Amortization of acquired intangibles

1,281

2,064

3,308

4,080

Plus: Employer payroll taxes on employee stock transactions

109

260

169

Non-GAAP gross profit

$ 529,522

$ 413,944

$ 1,038,423

$ 801,545

GAAP gross margin

81 %

80 %

81 %

80 %

Non-GAAP gross margin

82 %

81 %

83 %

81 %

Reconciliation of operating expenses

GAAP research and development

$ 274,599

$ 239,494

$ 544,587

$ 468,972

Less: Stock-based compensation expense

(87,105)

(75,730)

(175,518)

(150,433)

Less: Employer payroll taxes on employee stock transactions

(6,589)

(5,360)

(17,408)

(9,953)

Non-GAAP research and development

$ 180,905

$ 158,404

$ 351,661

$ 308,586

GAAP sales and marketing

$ 187,005

$ 147,455

$ 360,886

$ 292,426

Less: Stock-based compensation expense

(29,201)

(25,884)

(57,732)

(48,898)

Less: Amortization of acquired intangibles

(205)

(206)

(410)

(409)

Less: Employer payroll taxes on employee stock transactions

(608)

(1,253)

(2,761)

(2,028)

Non-GAAP sales and marketing

$ 156,991

$ 120,112

$ 299,983

$ 241,091

GAAP general and administrative

$ 47,558

$ 42,671

$ 92,848

$ 84,992

Less: Stock-based compensation expense

(11,953)

(12,566)

(24,515)

(23,852)

Less: Employer payroll taxes on employee stock transactions

(1,521)

(1,143)

(3,578)

(2,108)

Non-GAAP general and administrative

$ 34,084

$ 28,962

$ 64,755

$ 59,032

Reconciliation of operating income (loss) and operating margin

GAAP operating income (loss)

$ 12,618

$ (22,006)

$ 24,614

$ (56,976)

Plus: Stock-based compensation expense

134,652

118,337

269,685

231,065

Plus: Amortization of acquired intangibles

1,486

2,270

3,718

4,489

Plus: Employer payroll taxes on employee stock transactions

8,786

7,865

24,007

14,258

Non-GAAP operating income

$ 157,542

$ 106,466

$ 322,024

$ 192,836

GAAP operating margin

2 %

(4) %

2 %

(6) %

Non-GAAP operating margin

24 %

21 %

26 %

19 %

Datadog, Inc.

Reconciliation from GAAP to Non-GAAP Results

(In thousands, except per share data; unaudited)

Three Months Ended

June 30,

Six Months Ended

June 30,

2024

2023

2024

2023

Reconciliation of net income (loss)

GAAP net income (loss)

$ 43,824

$ (3,969)

$ 86,455

$ (28,055)

Plus: Stock-based compensation expense

134,652

118,337

269,685

231,065

Plus: Amortization of acquired intangibles

1,486

2,270

3,718

4,489

Plus: Employer payroll taxes on employee stock transactions

8,786

7,865

24,007

14,258

Plus: Amortization of issuance costs

910

846

1,760

1,691

Non-GAAP net income before non-GAAP tax adjustments

$ 189,658

$ 125,349

$ 385,625

$ 223,448

Income tax effects and adjustments (1)

36,693

23,905

75,038

41,613

Non-GAAP net income after non-GAAP tax adjustments

$ 152,965

$ 101,444

$ 310,587

$ 181,835

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

$ 0.57

$ 0.39

$ 1.16

$ 0.70

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

$ 0.53

$ 0.36

$ 1.08

$ 0.64

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

$ 0.46

$ 0.31

$ 0.93

$ 0.57

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

$ 0.43

$ 0.29

$ 0.87

$ 0.52

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

Basic

334,941

322,215

333,373

320,788

Diluted

356,740

348,551

356,650

347,311

Non-GAAP financial information for the periods shown are adjusted for an assumed provision for income taxes based on our long-term projected tax rate of 21%. Due to the differences in the tax treatment of items excluded from non-GAAP earnings, our estimated tax rate on non-GAAP income may differ from our GAAP tax rate and from our actual tax liabilities.

Datadog, Inc.

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

(In thousands; unaudited)

Three Months Ended

June 30,

Six Months Ended

June 30,

2024

2023

2024

2023

Net cash provided by operating activities

$ 164,424

$ 153,158

$ 376,694

$ 286,945

Less: Purchases of property and equipment

(4,415)

(2,339)

(18,573)

(11,078)

Less: Capitalized software development costs

(16,229)

(9,087)

(27,594)

(17,798)

Free cash flow

$ 143,780

$ 141,732

$ 330,527

$ 258,069

Free cash flow margin

22 %

28 %

26 %

Contact Information
Yuka Broderick
Datadog Investor Relations
IR@datadoghq.com

Dan Haggerty
Datadog Public Relations
Press@datadoghq.com

Datadog is a registered trademark of Datadog, Inc.

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

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SOURCE Datadog, Inc.

Technology

HydraForce, Elevāt, and Bosch Rexroth Announce Enhanced Remote OTA Update Capabilities for Off-Highway Equipment

Published

40 minutes ago

July 23, 2026

SEATTLE, July 23, 2026 /PRNewswire/ — Building on their strategic collaboration, HydraForce, a global leader in motion control systems and Elevāt, an industrial IoT and applied AI platform provider, announced a significant advancement in remote machine management.

The HydraForce Connected Control Unit (CCU) from Bosch, integrated with Elevāt software, is now capable of providing remote access and performing over-the-air (OTA) updates on Bosch Rexroth BODAS controllers.

This enhanced capability empowers HydraForce and Elevāt customers to streamline operations, reduce downtime, and significantly improve machine performance and serviceability. By leveraging the integrated solution, OEMs can use the Elevāt platform to remotely diagnose issues and deploy critical software updates to the BODAS controllers on their equipment without requiring on-site service personnel.

“The ability to remotely access and update Bosch Rexroth BODAS controllers using the Elevāt platform takes our collaborative vision of bridging hydraulics, electronics, and digital services to the next level,” said Russ Schneidewind, director of business developmentat at HydraForce. “The cooperation between Elevāt and Bosch Rexroth is directly addressing the industry’s need for complete, future-ready solutions.”

Adam Livesay, co-founder and CEO of Elevāt, commented, “At Elevāt, we believe the future of equipment service is connected, intelligent, and proactive. This collaboration helps OEMs deliver the next generation of service by accelerating software deployment and enabling faster issue resolution in the field. The addition of remote BODAS controller updates is another key milestone toward a fully integrated ecosystem that simplifies the connection between hardware, software, and digital services—helping manufacturers bring intelligent equipment to market faster while creating new opportunities for recurring customer value.”

HydraForce and Elevāt plan to further their collaboration with additional remote machine management capabilities to be announced in the future.

About HydraForce HydraForce is a global designer and manufacturer of motion control systems, encompassing hydraulic cartridge valves, manifolds and electronic controls for a variety of off-highway industries, including farming, construction, marine, material handling, mining, and forestry. HydraForce was acquired by Bosch Rexroth, becoming a significant part of the Compact Hydraulics Business Unit. Bosch Rexroth and HydraForce combine their presence in complementary regions to provide comprehensive coverage in Europe and North America, while enabling growth in Asia.

About Bosch Rexroth As one of the world’s leading suppliers of drive and control technologies, Bosch Rexroth ensures efficient, powerful and safe movement in machines and systems of any size. The company bundles global application experience in the market segments of Mobile and Industrial Applications as well as Factory Automation. With its intelligent components, customized system solutions, engineering and services, Bosch Rexroth is creating the necessary environment for fully connected applications. Bosch Rexroth offers its customers hydraulics, electric drive and control technology, gear technology and linear motion and assembly technology, including software and interfaces to the Internet of Things. With locations in over 80 countries, around 31,900 associates generated sales revenue of 6.5 billion euros in 2025. To learn more, please visit www.boschrexroth.com.

About Bosch Having established a presence in North America in 1906, today the Bosch Group employs around 38,000 associates in more than 100 locations in the North American region (as of Dec. 31, 2024). According to preliminary figures, Bosch generated consolidated sales of $18.7 billion in the U.S., Mexico and Canada in 2025. For more information visit www.bosch.us, www.bosch.mx and www.bosch.ca. The Bosch Group is a leading global supplier of technology and services. It employs roughly 412,000 associates worldwide (as of December 31, 2025). According to preliminary figures, the company generated sales of 91 billion euros in 2025. Its operations are divided into four business sectors: Mobility, Industrial Technology, Consumer Goods, and Energy and Building Technology. With its business activities, the company aims to use technology to help shape universal trends such as automation, electrification, digitalization, connectivity, and an orientation to sustainability. In this context, Bosch’s broad diversification across regions and industries strengthens its innovativeness and robustness. Bosch uses its proven expertise in sensor technology, software, and services to offer customers cross-domain solutions from a single source. It also applies its expertise in connectivity and artificial intelligence in order to develop and manufacture user-friendly, sustainable products. With technology that is “Invented for life,” Bosch wants to help improve quality of life and conserve natural resources. The Bosch Group comprises Robert Bosch GmbH and its roughly 490 subsidiary and regional companies in over 60 countries. Including sales and service partners, Bosch’s global manufacturing, engineering, and sales network covers nearly every country in the world. Bosch’s innovative strength is key to the company’s further development. At 136 locations across the globe, Bosch employs some 82,000 associates in research and development. The company was set up in Stuttgart in 1886 by Robert Bosch (1861-1942) as “Workshop for Precision Mechanics and Electrical Engineering.” The special ownership structure of Robert Bosch GmbH guarantees the entrepreneurial freedom of the Bosch Group, making it possible for the company to plan over the long term and to undertake significant upfront investments in the safeguarding of its future. Ninety-four percent of the share capital of Robert Bosch GmbH is held by Robert Bosch Stiftung GmbH, a limited liability company with a charitable purpose. The remaining shares are held by Robert Bosch GmbH and by a company owned by the Bosch family. The majority of voting rights are held by Robert Bosch Industrietreuhand KG. It is entrusted with the task of safeguarding the company’s long-term existence and in particular its financial independence – in line with the mission handed down in the will of the company’s founder, Robert Bosch. Additional information is available online at www.bosch-press.com, www.bosch.com.

About Elevāt Elevāt is a leading industrial IoT and applied AI platform purpose-built for off-highway OEMs. Elevāt enables manufacturers to connect machines, unlock actionable intelligence, and deliver next-generation digital services across the entire equipment lifecycle. Additional information is available online at www.getelevat.com

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SOURCE Elevat, Inc

Technology

FutureSports launches as new index provider transforming sports statistics into tradable financial instruments

Published

40 minutes ago

July 23, 2026

Backed by leading financial and sports institutions, firm will leverage partnerships to bring critical new hedging vehicles to sports ecosystem

CHICAGO, July 23, 2026 /PRNewswire/ — FutureSports, the new independent index administrator transforming professional and college sports statistics into rules-based, benchmark financial indexes, today announced its emergence from stealth. Backed by a broad range of leading financial and sports institutions, FutureSports in the coming months will announce a series of partnerships, collaborations and products that will bring significant new risk management and trading opportunities to the massive ecosystem supporting the most popular sports.

FutureSports previously raised a seed investment round co-led by Marquee Ventures, spun out of the ownership group of the Chicago Cubs. Major financial industry leaders joined the round, including CME Ventures (the corporate venture capital division of CME Group), Robinhood Markets, Inc., WEDBUSH and DRW Special Investments (an investment arm of DRW). Other investors include Motivate VC, Phoenix Capital Ventures, and John and Linda Henry (Fenway Sports Group).

The company also announced the addition of industry experts to its board of directors, including Chairman Mark Wassersug, longtime Chief Operating & Information Officer of Intercontinental Exchange (ICE); Tim McCourt, Senior Managing Director, Global Head of Equity, FX, and Alternative Products at CME Group, and Erik Hammer, Managing Partner at Marquee Ventures.

The firm will soon unveil its first series of exclusive partnerships with major sports leagues, paving the way for institutional investors and companies in and around the sports industry to manage their risk in an unprecedented fashion and participate in regulated, tradable, broad-based index futures contracts based on team and athlete statistical performance. FutureSports creates rules-based financial indexes, known as FutureSports Performance Indexes (FSPI), that accurately represent the performance of teams and athletes in prominent sports leagues. By utilizing transparent, rules-based methodologies based on officially reported statistical outcomes, the company creates continuous values designed to underpin tradable financial products, such as listed derivatives, exchange-traded funds (ETFs) and over-the-counter (OTC) swaps.

Potential market participants will include league broadcasting partners, team and athlete sponsors and endorsers, insurers, stadium owners and operators, private equity investors, lenders, and apparel manufacturers. Asset managers, pension funds and professional trading firms are expected to participate in the contracts and contribute to liquidity in this new uncorrelated asset class. Retail investors will also be able to participate in the first-of-their-kind trading vehicles, which the company expects to capture the interest of sophisticated traders looking for more traditional financial trading instruments

Leigh Taylforth, FutureSports Co-Founder, said: “The global sporting industry generates $650 billion a year, yet there has been no liquid, robust opportunity to hedge the extensive and varied industry risks that range from weather events, to injuries, to unanticipated behavior issues and more. That is about to change. We’ve been truly gratified to see the interest our business has generated within the sports and sports-adjacent industries and the quality of investors we have attracted already.”

Rhett Dinsdale, FutureSports Co-Founder, said: “Up until today, we have been operating in stealth mode while developing our products and establishing key relationships that we expect to be fundamental to our success as we move forward. The recent rise in popularity of prediction markets has only reinforced the concept we created several years ago, that sports as an asset class has huge utility within the sports and entertainment industries, with indexes serving as key institutional instruments to manage risk. What is sorely needed is the type of reliable data and financial instruments that institutional investors have leveraged for so long within the regulated derivatives industry, and we’re excited to bring these to market.”

The Executive team includes Co-Founders Taylforth and Dinsdale, who each have more than 20 years of experience in derivatives trading for market makers, investment banks and hedge funds, along with:

Dave Abbott, Chief Technology Officer – formerly Managing Director at Sportradar;Steve Byrd, Head of Partnerships – formerly Chief Operating Officer (COO) at STATS LLC & Chief Commercial Officer at Sportradar US;Jodie Gunzberg, Head of Index Services – formerly Managing Director at S&P Dow Jones Indices, Morgan Stanley & CoinDesk;Tom Jenkins, Head of Business Development – formerly Head of Index Partnerships & Strategy at FTSE Russell;Josh Kravitt, Head of Operations – formerly Director at CME Ventures;Sunny Modi, Head of Product – formerly Head of BI at Ardent Leisure Group;Mike Philipp, Chief Legal & Strategy Officer – formerly partner at Morgan, Lewis & Bockius LLP;Charlie Thornton, Chief Regulatory Affairs Officer – formerly Chief of Staff and COO at the U.S. Commodity Futures Trading Commission (CFTC).

About FutureSports

Under development since 2022 and launched in 2026, Chicago-based FutureSports has created a proprietary index methodology for measuring on-field, on-ice and on-court performance for a range of professional sporting teams and athletes. Partnering with many of the most recognizable sports leagues and financial market participants, FutureSports transforms live, play-by-play statistical data into rules-based, benchmark indexes that may be referenced by exchange-listed financial products. The indexes are designed to serve the same benchmarking function as the leading equity, commodity and fixed income indexes utilized every day across major global exchanges to track performance and hedge risk in the financial markets. For more information, visit www.futuresports.com.

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SOURCE FutureSports

Technology

Capital Group Canada Launches Three Active Equity ETFs on TSX

Published

40 minutes ago

July 23, 2026

The ETF suite now includes five active equity ETFs and two active fixed income ETFs designed to sit at the core of investment portfolios

TORONTO, July 23, 2026 /CNW/ — Capital International Asset Management (Canada), Inc. (“Capital Group Canada”) has launched three new active exchange-traded funds (ETFs) that begin trading on the Toronto Stock Exchange (TSX) today. The three equity strategies are designed to give options for investors looking to diversify their portfolios with non-domestic exposures including U.S., international and developed market securities.

The new active ETFs are:

CAPU – Capital Group U.S. Equity Select ETF (Canada): Seeks long-term growth of capital and income through investments primarily in common stocks of U.S. issuers.CAPN – Capital Group International Developed Equity Select ETF (Canada): Seeks to provide prudent growth of capital through investments primarily in equity securities of issuers in developed markets outside North America. CAPQ – Capital Group Global Developed Equity Select ETF (Canada): Seeks to provide prudent growth of capital through investments primarily in equity securities of issuers in developed markets.

“As demand for ETFs continues to grow, our expanded lineup gives investors more ways to access Capital Group’s distinctive active investment approach, including our deep research capabilities and multiple portfolio manager system,” said Rick Headrick, president of Capital Group Canada. “As one of the world’s largest active investment managers with over 90 years of experience, we are able to share the benefits of our global scale and offer competitively priced active ETFs designed to sit at the core of an investor’s portfolio.”

“Clients tell us they are looking beyond borders for opportunities to build diversified portfolios,” said Angela Shim, head of product and development at Capital Group Canada. “The three equity strategies expand Capital Group Canada’s core offerings in U.S., international, and global equities, giving investors flexible solutions that can help them navigate global markets and stay focused on their long-term investment goals.”

The three ETFs closed their initial offering of units on July 22, 2026.

The additions expand Capital Group Canada’s ETF lineup to seven, building on a prior launch of two equity and two fixed income ETFs. Details of Capital Group Canada’s full suite of active ETFs can be found here.

About Capital Group

Capital International Asset Management (Canada), Inc. is part of Capital Group, a global investment management firm originating in Los Angeles, California. As Capital Group approaches its 100th anniversary in 2031, its long-term strategy remains firmly rooted in its mission to improve people’s lives through successful investing. With over 9,000 associates and 34 offices around the world, Capital Group manages US$3.6 trillion in assets for millions of wealth management and institutional clients around the world*.

*As of June 30, 2026.

For more information, visit: www.capitalgroup.com/ca/en

SOURCE Capital Group Canada