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News

Datadog Announces Fourth Quarter and Fiscal Year 2021 Financial Results

February 10, 2022 at 7:00 AM EST
Fourth quarter revenue grew 84% year-over-year to $326 million
Strong growth of larger customers, with 216 $1 million+ ARR customers, up from 101 a year ago
Achieved FedRAMP moderate-impact authorization
Launched Sensitive Data Scanner

NEW YORK, Feb. 10, 2022 /PRNewswire/ -- Datadog, Inc. (NASDAQ:DDOG), the monitoring and security platform for cloud applications, today announced financial results for its fourth quarter and fiscal year ended December 31, 2021.

"We are pleased with our fourth quarter performance, as we demonstrated excellent revenue growth and continued business efficiencies," said Olivier Pomel, co-founder and CEO of Datadog. "We are proud of our strong execution in fiscal year 2021, with 70% year-over-year revenue growth, $287 million in operating cash flow, and $251 million in free cash flow."

Pomel added, "We continue to believe we're in early days with our opportunities in observability. And we are just starting our efforts in cloud security and developer-focused products. We have much to do, and we're excited about what we're working on for 2022 and beyond."

Fourth Quarter 2021 Financial Highlights:

  • Revenue was $326.2 million, an increase of 84% year-over-year.
  • GAAP operating income was $8.5 million; GAAP operating margin was 3%.
  • Non-GAAP operating income was $70.6 million; non-GAAP operating margin was 22%.
  • GAAP net income per diluted share was $0.02; non-GAAP net income per diluted share was $0.20.
  • Operating cash flow was $115.8 million, with free cash flow of $106.7 million.
  • Cash, cash equivalents, restricted cash, and marketable securities were $1.6 billion as of December 31, 2021.

Fiscal Year 2021 Financial Highlights:

  • Revenue was $1.03 billion, an increase of 70% year-over-year.
  • GAAP operating loss was $19.2 million; GAAP operating margin was (2)%.
  • Non-GAAP operating income was $165.1 million; non-GAAP operating margin was 16%.
  • GAAP net loss per diluted share was $(0.07); non-GAAP net income per diluted share was $0.48.
  • Operating cash flow was $286.5 million, with free cash flow of $250.5 million.

Fourth Quarter & Recent Business Highlights:

  • As of December 31, 2021, we had 216 customers with ARR of $1 million or more, an increase of 114% from 101 as of December 31, 2020. As of December 31, 2021, we had about 2,010 customers with ARR of $100,000 or more, an increase of 63% from 1,228 as of December 31, 2020.
  • Announced Federal Risk and Authorization Management Program (FedRAMP) Agency Authorization at the moderate impact level.
  • Announced the appointments of Sean Walters as Chief Revenue Officer and Kerry Acocella as General Counsel.
  • Announced a global strategic partnership with Amazon Web Services, Inc. (AWS). As part of this collaboration, AWS and Datadog will work together to develop and deliver tighter product alignment in the future.
  • Announced the launch of Sensitive Data Scanner. When configured for a customer's environment, this new service provides customers with an easy solution to detect, classify and protect sensitive data found in their application logs, helping them comply with regulatory requirements (such as GDPR, HIPAA, CCPA), industry standards and business policies.
  • Achieved the AWS Graviton Ready designation, part of the Amazon Web Services (AWS) Service Ready Program. This designation recognizes that Datadog has demonstrated successful integration with AWS Graviton.
  • Achieved Amazon Web Services (AWS) Migration & Modernization Competency status for AWS Partners. This designation recognizes that Datadog has demonstrated technical proficiency and proven customer success automating and accelerating customer application migration and modernization journeys.
  • Announced our integration with Confluent, the platform to set data in motion. Users running Confluent Cloud at any scale, from a proof of concept to mission-critical applications, can now use Datadog to monitor their Confluent Cloud resources alongside the rest of their technology stack.

First Quarter and Fiscal Year 2022 Outlook:

Based on information as of today, February 10, 2022, Datadog is providing the following guidance:

  • First Quarter 2022 Outlook:
    • Revenue between $334 million and $339 million.
    • Non-GAAP operating income between $36 million and $41 million.
    • Non-GAAP net income per share between $0.10 and $0.12, assuming approximately 348 million weighted average diluted shares outstanding.
  • Fiscal Year 2022 Outlook:
    • Revenue between $1.51 billion and $1.53 billion.
    • Non-GAAP operating income between $160 million and $180 million.
    • Non-GAAP net income per share between $0.45 and $0.51, assuming approximately 350 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 fourth quarter and fiscal year 2021 and outlook for the first quarter and the fiscal year 2022
  • When: February 10, 2022 at 8:00 A.M. Eastern Time (5:00 A.M. Pacific Time)
  • Dial in: To access the call in the U.S., please dial (800) 708-4539, and for international callers, please dial (847) 619-6396. Callers may provide confirmation number 50274553 to access the call more quickly, and 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 monitoring and security platform for cloud applications. Our SaaS platform integrates and automates infrastructure monitoring, application performance monitoring and log management to provide unified, real-time observability of 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, growth in and ability to capitalize on long-term market opportunities, gross margins and operating margins including with respect to sales and marketing, research and development expenses, investments and capital expenditures, and Datadog's future financial performance, including its outlook for the first quarter and fiscal year 2022. 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 business depends on our 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; (12) general market, political, economic, and business conditions; and (13) the impact that the ongoing COVID-19 pandemic and any related economic downturn could have on our or our customers' businesses, financial condition and results of operations. 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 Quarterly Report on Form 10-Q for the quarter ended September 30, 2021, filed with the SEC on November 5, 2021. Additional information will be made available in our Annual Report on Form 10-K for the year ended December 31, 2021 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 (sales and marketing, research and development, 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, and free cash flow. 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 (sales and marketing, research and development, 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) non-cash benefit related to tax adjustment; (4) employer payroll taxes on employee stock transactions; and (5) amortization of issuance costs. Datadog defines free cash flow as net cash provided by operating activities, minus capital expenditures and minus capitalized software development costs. 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.

Non-cash benefit related to tax adjustment. Datadog recorded a contingent payroll tax liability in conjunction with a common stock repurchase transaction in 2016. In 2020, the period of limitations for assessing the contingent Federal payroll tax liability expired and the Company was legally released from being the primary obligor, and recognized a benefit in the consolidated statement of operations. Datadog does not believe this is reflective of on-going results and therefore adjusted for this benefit.

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 May 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 management reviews cash flows generated from operations after taking into consideration capital expenditures and the capitalization of software development costs due to the fact that these expenditures are considered to be a necessary component of ongoing operations.

Operating Metrics

Datadog's number of customers with ARR of $100,000 or more and number of customers with ARR of $1 million or more are 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. 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. We updated the definition of MRR as of the quarter ended September 30, 2021 to capture usage from subscriptions with committed contractual amounts and applied this change retroactively. ARR and MRR should be viewed independently of revenue as they are operating metrics and 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 December 31,

 

Year Ended December 31, 2021

   

2021

 

2020

 

2021

 

2020

Revenue

 

$       326,198

 

177,531

 

$    1,028,784

 

$       603,466

Cost of revenue (1)(2)(4)

 

67,149

 

40,856

 

234,245

 

130,197

Gross profit

 

259,049

 

136,675

 

794,539

 

473,269

Operating expenses:

               

Research and development (1)(3)(4)

 

133,049

 

67,698

 

419,769

 

210,626

Sales and marketing (1)(2)(3)(4)

 

88,905

 

60,034

 

299,497

 

213,660

General and administrative (1)(3)(4)

 

28,640

 

17,881

 

94,429

 

62,756

Total operating expenses

 

250,594

 

145,613

 

813,695

 

487,042

Operating income (loss)

 

8,455

 

(8,938)

 

(19,156)

 

(13,773)

Other income (loss):

               

Interest expense (5)

 

(5,604)

 

(13,010)

 

(21,052)

 

(30,434)

Interest income and other income, net

 

5,681

 

6,781

 

21,786

 

21,985

Other income (loss), net

 

77

 

(6,229)

 

734

 

(8,449)

Income (loss) before provision for income taxes

 

8,532

 

(15,167)

 

(18,422)

 

(22,222)

Provision for income taxes

 

(1,363)

 

(993)

 

(2,323)

 

(2,325)

Net income (loss)

 

$           7,169

 

(16,160)

 

$        (20,745)

 

$        (24,547)

Net income (loss) per share - basic

 

$             0.02

 

$            (0.05)

 

$            (0.07)

 

$            (0.08)

Net income (loss) per share - diluted

 

$             0.02

 

$            (0.05)

 

$            (0.07)

 

$            (0.08)

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

               

Basic

 

311,817

 

304,057

 

309,048

 

300,350

Diluted

 

345,877

 

304,057

 

309,048

 

300,350

                 
                 

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

               

Cost of revenue

 

$           1,608

 

$              627

 

$           4,565

 

$           1,794

Research and development

 

36,995

 

13,285

 

101,942

 

38,008

Sales and marketing

 

11,680

 

6,784

 

35,035

 

20,467

General and administrative

 

6,083

 

4,068

 

22,195

 

14,105

Total

 

$         56,366

 

$         24,764

 

$       163,737

 

$         74,374

                 

(2) Includes amortization of acquired intangibles as follows:

               

Cost of revenue

 

$           1,218

 

$              275

 

$           3,792

 

$              943

Sales and marketing

 

208

 

 

600

 

Total

 

$           1,426

 

$              275

 

$           4,392

 

$              943

                 

(3) Includes non-cash benefit related to tax adjustment as follows:

               

Research and development

 

$                —

 

$                —

 

$                —

 

$          (2,729)

Sales and marketing

 

 

 

 

(449)

General and administrative

 

 

 

 

(2,383)

Total

 

$                —

 

$                —

 

$                —

 

$          (5,561)

 

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

Cost of revenue

 

$                92

 

$                33

 

$              345

 

$              187

Research and development

 

2,748

 

$              959

 

8,143

 

2,836

Sales and marketing

 

1,119

 

$              742

 

6,349

 

3,756

General and administrative

 

410

 

$              287

 

1,248

 

839

Total

 

$           4,369

 

$           2,021

 

$         16,085

 

$           7,618

                 

(5) Includes amortization of issuance costs as follows:

               

Interest expense

 

$              839

 

$           8,181

 

$           3,349

 

$         18,727

Total

 

$              839

 

$           8,181

 

$           3,349

 

$         18,727

 

Datadog, Inc.

Condensed Consolidated Balance Sheets

(In thousands; unaudited)

 
   

December 31,

2021

 

December 31,

2020

ASSETS

       

CURRENT ASSETS:

       

Cash and cash equivalents

 

$                270,973

 

$                224,927

Marketable securities

 

1,283,473

 

1,292,532

Accounts receivable, net of allowance for credit losses of $2,997 and $2,468 as of December 31, 2021 and 2020, respectively

 

268,824

 

163,359

Deferred contract costs, current

 

23,235

 

13,638

Prepaid expenses and other current assets

 

24,443

 

23,624

Total current assets

 

1,870,948

 

1,718,080

Property and equipment, net

 

75,152

 

47,197

Operating lease assets

 

61,355

 

57,829

Goodwill

 

292,176

 

17,609

Intangible assets, net

 

15,704

 

2,069

Deferred contract costs, non-current

 

42,062

 

26,750

Restricted cash

 

3,490

 

3,784

Other assets

 

19,907

 

16,967

TOTAL ASSETS

 

$             2,380,794

 

$             1,890,285

LIABILITIES AND STOCKHOLDERS' EQUITY

       

CURRENT LIABILITIES:

       

Accounts payable

 

$                  25,270

 

$                  21,342

Accrued expenses and other current liabilities

 

111,284

 

55,351

Operating lease liabilities, current

 

20,157

 

16,326

Deferred revenue, current

 

371,985

 

204,825

Total current liabilities

 

528,696

 

297,844

Operating lease liabilities, non-current

 

52,106

 

51,433

Convertible senior notes, net

 

735,482

 

575,864

Deferred revenue, non-current

 

13,896

 

3,450

Other liabilities

 

9,411

 

4,262

Total liabilities

 

1,339,591

 

932,853

STOCKHOLDERS' EQUITY:

       

Common stock

 

3

 

3

Additional paid-in capital

 

1,197,136

 

1,103,305

Accumulated other comprehensive (loss) income

 

(3,830)

 

2,287

Accumulated deficit

 

(152,106)

 

(148,163)

Total stockholders' equity

 

1,041,203

 

957,432

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 

$             2,380,794

 

$             1,890,285

         

 

Datadog, Inc.

Condensed Consolidated Statements of Cash Flow

(In thousands; unaudited)

 
   

Three Months Ended December 31,

 

Year Ended December 31, 2021

   

2021

 

2020

 

2021

 

2020

CASH FLOWS FROM OPERATING ACTIVITIES:

               

Net income (loss)

 

$      7,169

 

$   (16,160)

 

$   (20,745)

 

$   (24,547)

Adjustments to reconcile net loss to net cash provided by operating activities:

               

Depreciation and amortization

 

6,876

 

4,083

 

22,938

 

15,450

Amortization of discounts or premiums on marketable securities

 

4,407

 

4,409

 

16,236

 

9,753

Amortization of issuance costs

 

839

 

8,181

 

3,349

 

18,727

Amortization of deferred contract costs

 

5,309

 

3,099

 

17,866

 

10,447

Stock-based compensation, net of amounts capitalized

 

56,366

 

24,764

 

163,737

 

74,374

Non-cash lease expense

 

4,596

 

4,056

 

17,201

 

14,060

Allowance for credit losses on accounts receivable

 

1,085

 

627

 

2,311

 

3,283

Loss on disposal of property and equipment

 

16

 

6

 

274

 

10

Changes in operating assets and liabilities:

               

Accounts receivable, net

 

(45,232)

 

(42,995)

 

(107,112)

 

(64,248)

Deferred contract costs

 

(15,165)

 

(9,276)

 

(42,775)

 

(25,080)

Prepaid expenses and other current assets

 

204

 

2,418

 

(737)

 

(4,403)

Other assets

 

(783)

 

1,573

 

(2,627)

 

968

Accounts payable

 

(9,354)

 

133

 

3,078

 

6,539

Accrued expenses and other liabilities

 

18,044

 

(2,914)

 

37,270

 

3,970

Deferred revenue

 

81,416

 

41,824

 

176,281

 

69,788

Net cash provided by operating activities

 

115,793

 

23,828

 

286,545

 

109,091

CASH FLOWS FROM INVESTING ACTIVITIES:

               

Purchases of marketable securities

 

(228,107)

 

(317,499)

 

(1,125,519)

 

(1,794,562)

Maturities of marketable securities

 

110,868

 

238,054

 

1,046,560

 

506,554

Proceeds from sale of marketable securities

 

6,617

 

77,930

 

67,749

 

163,630

Purchases of property and equipment

 

(2,405)

 

(1,079)

 

(9,956)

 

(5,415)

Capitalized software development costs

 

(6,705)

 

(6,097)

 

(26,069)

 

(20,468)

Cash paid for acquisition of businesses; net of cash acquired

 

(26,303)

 

 

(226,505)

 

(2,363)

Net cash used in investing activities

 

(146,035)

 

(8,691)

 

(273,740)

 

(1,152,624)

CASH FLOWS FROM FINANCING ACTIVITIES:

               

Proceeds from exercise of stock options

 

4,256

 

3,631

 

14,907

 

15,985

Initial public offering costs

 

 

 

 

(421)

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

 

10,484

 

7,490

 

20,278

 

15,170

Employee payroll taxes paid related to net share settlement under the employee stock purchase plan

 

 

(63)

 

(245)

 

(1,040)

Proceeds from issuance of convertible senior notes, net of issuance costs

 

 

 

 

730,207

Purchase of capped call related to convertible senior notes

 

 

 

 

(89,625)

Net cash provided by financing activities

 

14,740

 

11,058

 

34,940

 

670,276

                 

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

 

(573)

 

386

 

(1,993)

 

779

                 

NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH

 

(16,075)

 

26,581

 

45,752

 

(372,478)

CASH, CASH EQUIVALENTS AND RESTRICTED CASH—Beginning of period

 

290,538

 

202,130

 

228,711

 

601,189

CASH, CASH EQUIVALENTS AND RESTRICTED CASH—End of period

 

$   274,463

 

$   228,711

 

$   274,463

 

$   228,711

                 

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

Cash and cash equivalents

 

$   270,973

 

$   224,927

 

$   270,973

 

$   224,927

Restricted cash

 

3,490

 

3,784

 

3,490

 

3,784

Total cash, cash equivalents and restricted cash

 

$   274,463

 

$   228,711

 

$   274,463

 

$   228,711

 

Datadog, Inc.

Reconciliation from GAAP to Non-GAAP Results

(In thousands, except per share data; unaudited)

 
   

Three Months Ended December 31,

 

Year Ended

December 31,

   

2021

 

2020

 

2021

 

2020

Reconciliation of gross profit and gross margin

               

GAAP gross profit

 

$  259,049

 

$  136,675

 

$  794,539

 

$  473,269

Plus: Stock-based compensation expense

 

1,608

 

627

 

4,565

 

1,794

Plus: Amortization of acquired intangibles

 

1,218

 

275

 

3,792

 

943

Plus: Employer payroll taxes on employee stock transactions

 

92

 

33

 

345

 

187

Non-GAAP gross profit

 

$  261,967

 

$  137,610

 

$  803,241

 

$  476,193

GAAP gross margin

 

79    %

 

77    %

 

77    %

 

78    %

Non-GAAP gross margin

 

80    %

 

78    %

 

78    %

 

79    %

                 

Reconciliation of operating expenses

               

GAAP research and development

 

$  133,049

 

$    67,698

 

$  419,769

 

$  210,626

Less: Stock-based compensation expense

 

(36,995)

 

(13,285)

 

(101,942)

 

(38,008)

Plus: Non-cash benefit related to tax adjustment

 

 

 

 

2,729

Less: Employer payroll taxes on employee stock transactions

 

(2,748)

 

(959)

 

(8,143)

 

(2,836)

Non-GAAP research and development

 

$    93,306

 

$    53,454

 

$  309,684

 

$  172,511

                 

GAAP sales and marketing

 

$    88,905

 

$    60,034

 

$  299,497

 

$  213,660

Less: Stock-based compensation expense

 

(11,680)

 

(6,784)

 

(35,035)

 

(20,467)

Less: Amortization of acquired intangibles

 

(208)

 

 

(600)

 

Plus: Non-cash benefit related to tax adjustment

 

 

 

 

449

Less: Employer payroll taxes on employee stock transactions

 

(1,119)

 

(742)

 

(6,349)

 

(3,756)

Non-GAAP sales and marketing

 

$    75,898

 

$    52,508

 

$  257,513

 

$  189,886

                 

GAAP general and administrative

 

$    28,640

 

$    17,881

 

$    94,429

 

$    62,756

Less: Stock-based compensation expense

 

(6,083)

 

(4,068)

 

(22,195)

 

(14,105)

Plus: Non-cash benefit related to tax adjustment

 

 

 

 

2,383

Less: Employer payroll taxes on employee stock transactions

 

(410)

 

(287)

 

(1,248)

 

(839)

Non-GAAP general and administrative

 

$    22,147

 

$    13,526

 

$    70,986

 

$    50,195

                 

Reconciliation of operating income and operating margin

               

GAAP operating income (loss)

 

$      8,455

 

$    (8,938)

 

$  (19,156)

 

$  (13,773)

Plus: Stock-based compensation expense

 

56,366

 

24,764

 

163,737

 

74,374

Plus: Amortization of acquired intangibles

 

1,426

 

275

 

4,392

 

943

Less: Non-cash benefit related to tax adjustment

 

 

 

 

(5,561)

Plus: Employer payroll taxes on employee stock transactions

 

4,369

 

2,021

 

16,085

 

7,618

Non-GAAP operating income

 

$    70,616

 

$    18,122

 

$  165,058

 

$    63,601

GAAP operating margin

 

3  %

 

(5)    %

 

(2)    %

 

(2)    %

Non-GAAP operating margin

 

22    %

 

10    %

 

16    %

 

11    %

                 

Reconciliation of net income (loss)

               

GAAP net income (loss)

 

$      7,169

 

$  (16,160)

 

$  (20,745)

 

$  (24,547)

Plus: Stock-based compensation expense

 

56,366

 

24,764

 

163,737

 

74,374

Plus: Amortization of acquired intangibles

 

1,426

 

275

 

4,392

 

943

Less: Non-cash benefit related to tax adjustment

 

 

 

 

(5,561)

Plus: Employer payroll taxes on employee stock transactions

 

4,369

 

2,021

 

16,085

 

7,618

Plus: Amortization of issuance costs

 

839

 

8,181

 

3,349

 

18,727

Non-GAAP net income

 

$    70,169

 

$    19,081

 

$  166,818

 

$    71,554

Net income per share - basic

 

$        0.23

 

$        0.06

 

$        0.54

 

$        0.24

Net income per share - diluted

 

$        0.20

 

$        0.06

 

$        0.48

 

$        0.22

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

               

Basic

 

311,817

 

304,057

 

309,048

 

300,350

Diluted

 

345,877

 

334,459

 

343,997

 

331,941

 

Datadog, Inc.

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

(In thousands; unaudited)

 
   

Three Months Ended December 31,

 

Year Ended December 31, 2021

   

2021

 

2020

 

2021

 

2020

Net cash provided by operating activities

 

$           115,793

 

$             23,828

 

$           286,545

 

$           109,091

Less: Purchases of property and equipment

 

(2,405)

 

(1,079)

 

(9,956)

 

(5,415)

Less: Capitalized software development costs

 

(6,705)

 

(6,097)

 

(26,069)

 

(20,468)

Free cash flow

 

$           106,683

 

$             16,652

 

$           250,520

 

$             83,208

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

Dan Haggerty
Datadog Public Relations
Press@datadog.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.

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