SEC Filing | Datadog

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ddog-20220630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

_________________________________________________________

FORM 10-Q

_________________________________________________________

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-39051

_________________________________________________________

Datadog, Inc.

(Exact Name of Registrant as Specified in its Charter)

_________________________________________________________


Delaware		27-2825503
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
620 8th Avenue,	45th Floor
New York,	NY	10018
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (866) 329-4466

_________________________________________________________

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A common stock, par value $0.00001 per share	DDOG	The Nasdaq Stock Market LLC
		(Nasdaq Global Select Market)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Small reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of July 26, 2022, there were 290,815,845 shares of the registrant’s Class A common stock and 25,629,842 shares of the registrant’s Class B common stock, each with a par value of $0.00001 per share, outstanding.

TABLE OF CONTENTS


		Page
PART I.	FINANCIAL INFORMATION	3
Item 1.	Financial Statements	3
	Condensed Consolidated Balance Sheets as of June 3 0 , 2022 and December 31, 2021	3
	Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 3 0 , 2022 and 2021	4
	Condensed Consolidated Statements of Comprehensive Loss for the Three and Six Months Ended June 3 0 , 2022 and 2021	5
	Condensed Consolidated Statements of Stockholders’ Equity for the Three and Six Months Ended June 3 0 , 2022 and 2021	6
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 3 0 , 2022 and 2021	8
	Notes to Condensed Consolidated Financial Statements (unaudited)	9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	35
Item 4.	Controls and Procedures	35

PART II.	OTHER INFORMATION	37
Item 1.	Legal Proceedings	37
Item 1A.	Risk Factors	37
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	63
Item 3.	Defaults Upon Senior Securities	63
Item 4.	Mine Safety Disclosures	63
Item 5.	Other Information	64
Item 6.	Exhibits	64
Signatures		65

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q including statements regarding our future results of operations or financial condition, business strategy and plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will” or “would” or the negative of these words or other similar terms or expressions. These forward-looking statements include, but are not limited to, statements concerning the following:

•our expectations regarding our revenue, expenses and other operating results;

•our ability to acquire new customers and successfully retain existing customers;

•our ability to increase usage of our platform and upsell and cross sell additional products;

•our ability to achieve or sustain our profitability;

•future investments in our business, our anticipated capital expenditures and our estimates regarding our capital requirements;

•the costs and success of our sales and marketing efforts, and our ability to promote our brand;

•our reliance on key personnel and our ability to identify, recruit and retain skilled personnel;

•our ability to effectively manage our growth, including any international expansion;

•our ability to protect our intellectual property rights and any costs associated therewith;

•our ability to compete effectively with existing competitors and new market entrants;

•the growth rates of the markets in which we compete; and

•the potential impact of the COVID-19 pandemic on our business, results of operations and financial condition.

You should not rely on forward-looking statements as predictions of future events. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors described under the header “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained herein. The results, events and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.

The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made, and we undertake no obligation to update them to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law.

Unless the context otherwise indicates, references in this report to the terms “Datadog”, “the Company,” “we,” “our” and “us” refer to Datadog, Inc. and its subsidiaries.

We may announce material business and financial information to our investors using our investor relations website (investors.datadoghq.com). We therefore encourage investors and others interested in Datadog to review the information that we make available on our website, in addition to following our filings with the Securities and Exchange Commission, webcasts, press releases and conference calls.

PART I-FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

DATADOG, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

(unaudited)


	June 30, 2022		December 31, 2021
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	238,859	$	270,973
Marketable securities	1,464,681		1,283,473
Accounts receivable, net of allowance for credit losses of $3,989 and $2,997 as of June 30, 2022 and December 31, 2021, respectively	305,501		268,824
Deferred contract costs, current	27,345		23,235
Prepaid expenses and other current assets	33,202		24,443
Total current assets	2,069,588		1,870,948
Property and equipment, net	97,791		75,152
Operating lease assets	64,016		61,355
Goodwill	334,687		292,176
Intangible assets, net	17,960		15,704
Deferred contract costs, non-current	46,840		42,062
Restricted cash	3,214		3,490
Other assets	20,391		19,907
TOTAL ASSETS	$	2,654,487	$	2,380,794
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable	$	47,650	$	25,270
Accrued expenses and other current liabilities	111,622		111,284
Operating lease liabilities, current	22,357		20,157
Deferred revenue, current	444,247		371,985
Total current liabilities	625,876		528,696
Operating lease liabilities, non-current	51,771		52,106
Convertible senior notes, net	737,160		735,482
Deferred revenue, non-current	14,526		13,896
Other liabilities	10,034		9,411
Total liabilities	1,439,367		1,339,591
COMMITMENTS AND CONTINGENCIES (NOTE 8)
STOCKHOLDERS' EQUITY:
Class A common stock, $0.00001 par value per share; 2,000,000,000 shares authorized as of June 30, 2022 and December 31, 2021; 290,783,440 and 263,339,585 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively	3		2
Class B common stock, $0.00001 par value per share; 310,000,000 shares authorized as of June 30, 2022 and December 31, 2021; 25,632,342 and 50,025,852 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively	—		1
Additional paid-in capital	1,380,873		1,197,136
Accumulated other comprehensive loss	(18,509)		(3,830)
Accumulated deficit	(147,247)		(152,106)
Total stockholders’ equity	1,215,120		1,041,203
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	2,654,487	$	2,380,794

See accompanying notes to condensed consolidated financial statements.

DATADOG, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Revenue	$	406,138	$	233,549	$	769,168	$	432,098
Cost of revenue	81,925		57,098		156,387		103,764
Gross profit	324,213		176,451		612,781		328,334
Operating expenses:
Research and development	177,699		94,779		328,307		174,045
Sales and marketing	115,270		70,412		216,436		134,765
General and administrative	34,383		21,146		60,763		42,240
Total operating expenses	327,352		186,337		605,506		351,050
Operating (loss) income	(3,139)		(9,886)		7,275		(22,716)
Other income:
Interest expense	(4,541)		(5,064)		(9,788)		(10,536)
Interest income and other income, net	7,669		5,292		13,356		11,065
Other income, net	3,128		228		3,568		529
(Loss) income before (provision for) benefit from income taxes	(11)		(9,658)		10,843		(22,187)
(Provision for) benefit from income taxes	(4,868)		296		(5,984)		(243)
Net (loss) income	$	(4,879)	$	(9,362)	$	4,859	$	(22,430)
Net (loss) income attributable to common stockholders	$	(4,879)	$	(9,362)	$	4,859	$	(22,430)
Basic net (loss) income per share	$	(0.02)	$	(0.03)	$	0.02	$	(0.07)

Diluted net (loss) income per share	$	(0.02)	$	(0.03)	$	0.01	$	(0.07)
Weighted average shares used in calculating basic net (loss) income per share:	314,795		308,019		314,130		307,032
Weighted average shares used in calculating diluted net (loss) income per share:	314,795		308,019		345,444		307,032

See accompanying notes to condensed consolidated financial statements.

DATADOG, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands)

(unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Net (loss) income	$	(4,879)	$	(9,362)	$	4,859	$	(22,430)
Other comprehensive (loss) income:
Foreign currency translation adjustments	(2,565)		160		(3,104)		(692)
Unrealized loss on available-for-sale marketable securities	(3,389)		(80)		(11,575)		(763)
Other comprehensive (loss) income	(5,954)		80		(14,679)		(1,455)
Comprehensive loss	$	(10,833)	$	(9,282)	$	(9,820)	$	(23,885)

See accompanying notes to condensed consolidated financial statements.

DATADOG, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands, except share data)

(unaudited)


	Class A and Class B Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Stockholders' Equity
	Shares	Amount
BALANCE—March 31, 2022	314,921,005	$	3	$	1,271,777	$	(12,555)	$	(142,368)	$	1,116,857
Issuance of common stock upon exercise of stock options	506,753	—		2,198		—		—		2,198

Vesting of restricted stock units	650,490	—		—		—		—		—
Issuance of restricted shares of common stock from acquisitions	191,019	—		7,608		—		—		7,608
Issuance of common stock under the Employee Stock Purchase Plan	146,515	—		13,557		—		—		13,557
Stock-based compensation	—	—		85,733		—		—		85,733
Change in accumulated other comprehensive loss	—	—		—		(5,954)		—		(5,954)
Net loss	—	—		—		—		(4,879)		(4,879)
BALANCE—June 30, 2022	316,415,782	$	3	$	1,380,873	$	(18,509)	$	(147,247)	$	1,215,120


	Class A and Class B Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Income		Accumulated Deficit		Total Stockholders' Equity
	Shares	Amount
BALANCE—March 31, 2021	307,804,350	$	3	$	985,004	$	752	$	(144,429)	$	841,330
Issuance of common stock upon exercise of stock options	1,210,516	—		2,928		—		—		2,928
Vesting of early exercised stock options	—	—		206		—		—		206
Vesting of restricted stock units	440,858	—		—		—		—		—
Issuance of restricted shares of common stock from acquisition	245,761	—		31,329		—		—		31,329
Issuance of common stock under the Employee Stock Purchase Plan, net of shares withheld for taxes	139,649	—		9,794		—		—		9,794
Stock-based compensation	—	—		36,574		—		—		36,574

Changes in accumulated other comprehensive income	—	—		—		80		—		80
Net loss	—	—		—		—		(9,362)		(9,362)
BALANCE—June 30, 2021	309,841,134	$	3	$	1,065,835	$	832	$	(153,791)	$	912,879


	Class A and Class B Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Stockholders' Equity
	Shares	Amount
BALANCE—December 31, 2021	313,365,437	$	3	$	1,197,136	$	(3,830)	$	(152,106)	$	1,041,203
Issuance of common stock upon exercise of stock options	1,673,753	—		6,416		—		—		6,416
Vesting of early exercised stock options	—	—		33		—		—		33
Vesting of restricted stock units	1,039,058	—		—		—		—		—
Issuance of restricted shares of common stock from acquisitions	191,019	—		7,608		—		—		7,608
Issuance of common stock under the Employee Stock Purchase Plan	146,515	—		13,557		—		—		13,557
Stock-based compensation	—	—		156,123		—		—		156,123


Change in accumulated other comprehensive loss	—	—		—		(14,679)		—		(14,679)
Net income	—	—		—		—		4,859		4,859
BALANCE—June 30, 2022	316,415,782	$	3	$	1,380,873	$	(18,509)	$	(147,247)	$	1,215,120


	Class A and Class B Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit		Total Stockholders' Equity
	Shares	Amount
BALANCE—December 31, 2020	305,880,063	$	3	$	1,103,305	$	2,287	$	(148,163)	$	957,432
Effect of adoption of ASU 2020-06	—	—		(173,070)		—		16,802		(156,268)
BALANCE—January 1, 2021	305,880,063	3		930,235		2,287		(131,361)		801,164
Issuance of common stock upon exercise of stock options	2,530,629	—		6,217		—		—		6,217
Vesting of early exercised stock options	—	—		500		—		—		500
Vesting of restricted stock units	789,210	—		—		—		—		—
Issuance of restricted shares of common stock from acquisitions	501,583	—		51,501		—		—		51,501
Issuance of common stock under the Employee Stock Purchase Plan	139,649	—		9,794		—		—		9,794
Stock-based compensation	—	—		67,588		$	—	—		67,588
Change in accumulated other comprehensive income (loss)	—	—		—		(1,455)		—		(1,455)
Net loss	—	—		—		—		(22,430)		(22,430)
BALANCE—June 30, 2021	309,841,134	$	3	$	1,065,835	$	832	$	(153,791)	$	912,879

See accompanying notes to condensed consolidated financial statements.

DATADOG, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)


	Six Months Ended June 30,
	2022		2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	4,859	$	(22,430)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	15,512		9,865
Amortization of discounts or premiums on marketable securities	6,697		8,113
Amortization of issuance costs	1,682		1,672
Amortization of deferred contract costs	12,580		7,853
Stock-based compensation, net of amounts capitalized	149,283		63,376
Non-cash lease expense	9,686		8,061
Allowance for credit losses on accounts receivable	1,931		527
Loss on disposal of property and equipment	1,149		156
Changes in operating assets and liabilities:
Accounts receivable, net	(38,100)		(24,908)
Deferred contract costs	(21,469)		(16,701)
Prepaid expenses and other current assets	(12,629)		(2,537)
Other assets	(1,752)		(932)
Accounts payable	23,179		7,372
Accrued expenses and other liabilities	(4,310)		7,308
Deferred revenue	72,050		56,578
Net cash provided by operating activities	220,348		103,373

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of marketable securities	(718,785)		(490,983)
Maturities of marketable securities	516,754		570,206
Proceeds from sale of marketable securities	2,006		41,715
Purchases of property and equipment	(15,501)		(4,227)
Capitalized software development costs	(14,780)		(12,392)
Cash paid for acquisition of businesses; net of cash acquired	(39,566)		(200,348)
Net cash used in investing activities	(269,872)		(96,029)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options	6,451		6,162
Proceeds from issuance of common stock under the employee stock purchase plan	13,557		9,794
Employee payroll taxes paid related to net share settlement under the employee stock purchase plan	—		(245)
Repayments of convertible senior notes	(3)		—
Net cash provided by financing activities	20,005		15,711

Effect of exchange rate changes on cash, cash equivalents and restricted cash	(2,871)		(662)

NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH	(32,390)		22,393
CASH, CASH EQUIVALENTS AND RESTRICTED CASH—Beginning of period	274,463		228,711
CASH, CASH EQUIVALENTS AND RESTRICTED CASH—End of period	$	242,073	$	251,104

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for income taxes	$	386	$	543

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Accrued property and equipment purchases	$	1,078	$	914
Stock-based compensation included in capitalized software development costs	$	6,840	$	4,212
Vesting of early exercised options	$	33	$	500
Issuance of restricted shares of common stock for the acquisition of businesses	$	7,608	$	51,501
Acquisition holdback	$	5,473	$	1,195

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	$	238,859	$	247,442
Restricted cash	3,214		3,662
Total cash, cash equivalents and restricted cash	$	242,073	$	251,104

See accompanying notes to condensed consolidated financial statements.

DATADOG, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Organization and Description of Business

Description of Business

Datadog, Inc. (“Datadog” or the “Company”) was incorporated in the State of Delaware on June 4, 2010. The Company is the monitoring and security platform for cloud applications. The Company’s SaaS platform integrates and automates infrastructure monitoring, application performance monitoring, log management and security monitoring to provide unified, real-time observability of its customers’ entire technology stack. The Company is headquartered in New York City and has various other global office locations.

2. Basis of Presentation and Summary of Significant Accounting Policies

Unaudited Interim Condensed Consolidated Financial Information

The unaudited condensed consolidated financial statements include the accounts of Datadog, Inc. and its wholly-owned subsidiaries, and have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and following the requirements of the Securities and Exchange Commission (“SEC”) for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by GAAP can be condensed or omitted. These financial statements have been prepared on the same basis as the Company’s annual financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, which are necessary for the fair statement of the Company’s financial information. These interim results are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2022 or for any other interim period or for any other future year. The accompanying unaudited condensed consolidated financial statements and related financial information should be read in conjunction with the audited consolidated financial statements and the related notes contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, as filed with the SEC on February 25, 2022 (the “Annual Report”).

Basis of Presentation

The accompanying condensed consolidated financial statements have been prepared in accordance with GAAP.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of Datadog, Inc. and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Such estimates include the fair value of marketable securities, the allowance for credit losses, the fair value of acquired assets and assumed liabilities from business combinations, useful lives of property, equipment, software and finite lived intangibles, stock-based compensation, valuation of long-lived assets and their recoverability, including goodwill, the incremental borrowing rate for operating leases, estimated expected period of benefit for deferred contract costs, fair value of the liability component of the convertible debt, realization of deferred tax assets and uncertain tax positions, revenue recognition and the allocation of overhead costs between cost of revenue and operating expenses. The Company bases its estimates on historical experience and also on assumptions that management considers reasonable. The Company assesses these estimates on a regular basis; however, actual results could materially differ from these estimates.

Accounting Pronouncements Recently Adopted

In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers ("ASU No. 2021-08"), which intends to improve the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency related to recognition of an acquired contract liability and payment terms and their effect on subsequent revenue recognized by

the acquirer. It is effective for interim and annual periods beginning after December 15, 2022, with early adoption permitted. The Company early adopted ASU No. 2021-08 on January 1, 2022 on a prospective basis with no material impact on the Company's condensed consolidated financial statements.

3. Marketable Securities

The following is a summary of available-for-sale marketable securities, excluding those securities classified within cash and cash equivalents on the condensed consolidated balance sheets as of June 30, 2022 and December 31, 2021 (in thousands):


	June 30, 2022
	Amortized Cost		Unrealized Gain		Unrealized Losses		Fair Value
Commercial debt securities	$	998,355	$	—	$	(12,370)	$	985,985
Certificates of deposit	72,843		3		(167)		72,679
U.S. government treasury securities	179,598		6		(1,425)		178,179
Commercial paper	220,720		8		(849)		219,879
Non-U.S. government securities	8,027		—		(68)		7,959
Marketable securities	$	1,479,543	$	17	$	(14,879)	$	1,464,681


	December 31, 2021
	Amortized Cost		Unrealized Gain		Unrealized Losses		Fair Value
Commercial debt securities	$	1,034,573	$	43	$	(2,564)	$	1,032,052
Certificates of deposit	14,574		5		(10)		14,569
U.S. government treasury securities	77,628		18		(204)		77,442
Commercial paper	151,379		14		(37)		151,356
Non-U.S. government securities	8,071		—		(17)		8,054
Marketable securities	$	1,286,225	$	80	$	(2,832)	$	1,283,473

As of June 30, 2022, the fair values of available-for-sale marketable securities, by remaining contractual maturity, were as follows (in thousands):


Due within one year	$	1,314,455
Due in one year through five years	150,226
Total	$	1,464,681

The Company does not believe that any unrealized losses are attributable to credit-related factors based on its evaluation of available evidence. To determine whether a decline in value is related to credit loss, the Company evaluates, among other factors: the extent to which the fair value is less than the amortized cost basis, changes to the rating of the security by a rating agency and any adverse conditions specifically related to an issuer of a security or its industry. Unrealized gains and losses on marketable securities are presented net of tax.

4. Fair Value Measurements

The following tables present information about the Company’s financial assets and liabilities that have been measured at fair value on a recurring basis as of June 30, 2022 and December 31, 2021, and indicate the fair value hierarchy of the valuation inputs utilized to determine such fair value (in thousands):


	Fair Value Measurement as of June 30, 2022
	Level 1		Level 2		Level 3		Total
Financial Assets:
Cash equivalents:
Money market funds	$	182,572	$	—	$	—	$	182,572
Commercial paper	—		25,314		—		25,314
Corporate debt securities	—		790		—		790
Marketable Securities:
Corporate debt securities	—		985,985		—		985,985
Certificates of deposit	—		72,679		—		72,679
U.S. government treasury securities	—		178,179		—		178,179
Commercial paper	—		219,879		—		219,879
Non-U.S. government treasury securities	—		7,959		—		7,959
Total financial assets	$	182,572	$	1,490,785	$	—	$	1,673,357


	Fair Value Measurement as of December 31, 2021
	Level 1		Level 2		Level 3		Total
Financial Assets:
Cash equivalents:
Money market funds	$	241,571	$	—	$	—	$	241,571
Marketable Securities:
Corporate debt securities	—		1,032,052		—		1,032,052
Certificates of deposit	—		14,569		—		14,569
U.S. government treasury securities	—		77,442		—		77,442
Commercial paper	—		151,356		—		151,356
Non-U.S. government treasury securities	—		8,054		—		8,054
Total financial assets	$	241,571	$	1,283,473	$	—	$	1,525,044

The Company classifies its highly liquid money market funds within Level 1 of the fair value hierarchy because they are valued based on quoted market prices in active markets. The Company classifies its commercial paper, corporate debt securities, certificates of deposit and U.S. and non-U.S. government treasury securities within Level 2 because they are valued using inputs other than quoted prices that are directly or indirectly observable in the market, including readily available pricing sources for the identical underlying security which may not be actively traded.

In addition to its cash equivalents and marketable securities, the Company measures the fair value of its outstanding convertible senior notes on a quarterly basis for disclosure purposes. The Company considers the fair value of the convertible senior notes to be a Level 2 measurement due to limited trading activity of the convertible senior notes. Refer to Note 7, Convertible Senior Notes, to the condensed consolidated financial statements for further details.

5. Property and Equipment, Net

Property and equipment, net consisted of the following (in thousands):


	June 30, 2022		December 31, 2021
Computers and equipment	$	28,495	$	16,885
Furniture and fixtures	8,568		6,595
Leasehold improvements	19,979		20,669
Capitalized software development costs	109,484		86,189
Total property and equipment	$	166,526	$	130,338
Less: accumulated depreciation and amortization	(68,735)		(55,186)
Total property and equipment, net	$	97,791	$	75,152

The Company capitalizes costs related to the development of computer software for internal use and is included in capitalized software development costs within property and equipment, net.

Depreciation and amortization expense was approximately $6.4 million and $12.2 million for the three and six months ended June 30, 2022, respectively. Depreciation and amortization expense was approximately $4.4 million and $8.4 million for the three and six months ended June 30, 2021, respectively.

6. Acquisitions, Intangible Assets and Goodwill

2022 Acquisitions

In June 2022, the Company entered into two purchase agreements for acquisitions of businesses, both of which transactions were accounted for as business combinations in accordance with ASC 805, Business Combinations. The Company does not consider these acquisitions to be material, individually or in aggregate. The total purchase price was allocated to intangible assets in the amount of $5.6 million and goodwill in the amount of $43.9 million based on the respective estimated fair values. The resulting goodwill from both acquisitions is not deductible for income tax purposes. Pro forma results of operations from these acquisitions have not been presented because they were not material to the consolidated results of operations.

2021 Acquisitions

In October and December 2021, the Company entered into two purchase agreements for the acquisitions of businesses, both of which transactions were accounted for as business combinations in accordance with ASC 805, Business Combinations. The Company does not consider these acquisitions to be material, individually or in aggregate. The total purchase price was allocated to intangible assets in the amount of $4.3 million and goodwill in the amount of $36.6 million based on the respective estimated fair values. The resulting goodwill from both acquisitions is not deductible for income tax purposes. Pro forma results of operations from these acquisitions have not been presented because they were not material to the consolidated results of operations.

In April 2021, the Company entered into a Stock Purchase Agreement pursuant to which the Company acquired all of the issued and outstanding shares of a SaaS based security platform company. The consideration was approximately $219.4 million, comprising cash and Class A common stock. The acquisition was accounted for as a business combination in accordance with ASC 805, Business Combinations, and accordingly, the total fair value of the purchase consideration was allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values on the acquisition date. The total preliminary purchase price allocated to intangible assets and goodwill was $12.0 million and $204.3 million, respectively. The resulting goodwill is not deductible for income tax purposes. Intangible assets consisted of developed technology in the amount of $8.7 million and customer relationships in the amount of $3.3 million. The useful life for developed technology and customer relationships are three and four years, respectively. Additionally, there was a one-time severance charge of $1.3 million recorded on the acquisition date. Goodwill resulted primarily from the expectation of enhancing the Company's current application security tools. Pro forma results of operations for this acquisition have not been presented because they were not material to the condensed consolidated results of operations.

In February 2021, the Company entered into a Stock Purchase Agreement pursuant to which the Company acquired all of the issued and outstanding shares of a target company with the purchase price paid in cash and Class A common stock. The acquisition was accounted for as a business combination in accordance with ASC 805, Business Combinations. The purchase price was allocated to intangible assets in the amount of $1.7 million and goodwill in the amount of $34.3 million based on the respective estimated fair values. Goodwill resulted primarily from the expectation of enhancing the Company's current observability tools. The resulting goodwill is not deductible for income tax purposes. Pro forma results of operations for this acquisition have not been presented because they were not material to the condensed consolidated results of operations.

Intangible Assets

Intangible assets, net consisted of the following (in thousands):


	June 30, 2022
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Amortization Period
Developed technology	$	22,746	$	(7,077)	$	15,669	3 years
Customer relationships	3,300		(1,009)		2,291		4 years
Total	$	26,046	$	(8,086)	$	17,960


	December 31, 2021
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Amortization Period
Developed technology	$	17,186	$	(4,182)	$	13,004	3 years
Customer relationships	3,300		(600)		2,700		4 years
Total	$	20,486	$	(4,782)	$	15,704

Intangible amortization expense was approximately $1.7 million and $1.1 million for the three months ended June 30, 2022 and 2021, respectively, and $3.3 million and $1.4 million for the six months ended June 30, 2022 and 2021, respectively.

As of June 30, 2022, future amortization expense by year is expected to be as follows (in thousands):


	Amount
Remainder of 2022	$	4,185
2023	7,839
2024	4,838
2025	1,098
Total	$	17,960

Goodwill

The changes in the carrying amount of goodwill were as follows (in thousands):


	Amount
Balance as of December 31, 2021	$	292,176
2022 Acquisitions	43,926
Foreign currency translation adjustments	(1,415)
Balance as of June 30, 2022	$	334,687

7. Convertible Senior Notes

On June 2, 2020, the Company issued $747.5 million aggregate principal amount of 0.125% convertible senior notes due 2025 (the “2025 Notes”) in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (“Securities Act”). The total net proceeds from the sale of the 2025 Notes, after deducting the initial purchasers’ discounts and debt issuance costs, were approximately $730.2 million. The 2025 Notes bear interest at a rate of 0.125% per year, payable semiannually in arrears on June 15 and December 15 of each year, beginning on December 15, 2020. The 2025 Notes will mature on June 15, 2025, unless earlier converted, redeemed or repurchased.

Holders may convert their notes at their option at any time prior to the close of business on the business day immediately preceding March 15, 2025 only under the following circumstances:

(1)during any calendar quarter commencing after the calendar quarter ending on September 30, 2020 (and only during such calendar quarter), if the last reported sale price of the Company’s Class A common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day;

(2)during the five business day period after any ten consecutive trading day period (the "Measurement Period") in which the trading price per $1,000 principal amount of 2025 Notes for each trading day of the Measurement Period was less than 98% of the product of the last reported sale price of the Company’s Class A common stock and the conversion rate on each such trading day;

(3)if the Company calls such 2025 Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; or

(4)upon the occurrence of specified corporate events, as set forth in the indenture governing the 2025 Notes (“the Indenture”).

On or after March 15, 2025 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their notes, in integral multiples of $1,000 principal amount, at the option of the holder regardless of the foregoing circumstances. The conversion rate for the 2025 Notes is initially 10.8338 shares of Class A common stock per $1,000 principal amount of notes (equivalent to an initial conversion price of approximately $92.30 per share of Class A common stock), subject to adjustment as set forth in the Indenture. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of Class A common stock or a combination of cash and shares of Class A common stock, at the Company’s election. If the Company satisfies its conversion obligation solely in cash or through payment and delivery, as the case may be, of a combination of cash and shares of Class A common stock, the amount of cash and shares of Class A common stock, if any, due upon conversion will be based on a daily conversion value calculated on a proportionate basis for each trading day in a 30 trading day observation period as described in the Indenture. In addition, if specific corporate events occur prior to the applicable maturity date, or if the Company elects to redeem the 2025 Notes, the Company will increase the conversion rate for a holder who elects to convert their notes in connection with such a corporate event or redemption in certain circumstances.

During the three months ended June 30, 2022, the conditional conversion feature of the 2025 Notes was not triggered as the last reported sale price of the Company's Class A common stock was not greater than or equal to 130% of the conversion price for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the quarter ended June 30, 2022. Therefore the 2025 Notes are not convertible, in whole or in part, at the option of the holders between July 1, 2022 through September 30, 2022. Whether the 2025 Notes will be convertible following such period will depend on the continued satisfaction of this condition or another conversion condition in the future.

When a conversion notice is received, the Company has the option to pay or deliver cash, shares of the Company’s common stock, or a combination thereof. As of June 30, 2022, the Company has received an immaterial amount of conversion notices from the holders and the 2025 Notes were classified as long-term debt on the Company's condensed consolidated balance sheet.

The Company may not redeem the 2025 Notes prior to June 20, 2023. On or after June 20, 2023, and prior to the 31st scheduled trading day immediately preceding the maturity date, the Company may redeem for cash all or any portion of the 2025 Notes, at its option, if the last reported sale price of its Class A common stock was at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Company provides a notice of redemption at a redemption price equal to 100% of the principal amount of the 2025 Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.

In accounting for the issuance of the 2025 Notes, the 2025 Notes were separated into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of similar liabilities that do not have associated convertible features. The carrying amount of the equity component representing the conversion option was determined by deducting the fair value of the liability component from the par value of the respective 2025 Notes. This difference represents the debt discount that is amortized to interest expense over the contractual terms of the 2025 Notes using the effective interest rate method. The carrying amount of the equity component representing the conversion option was $177.2 million. The equity component was recorded in additional paid-in capital and is not remeasured as long as it continues to meet the conditions for equity classification.

In accounting for the debt issuance costs of $17.3 million related to the 2025 Notes, the Company allocated the total amount incurred to the liability and equity components of the 2025 Notes in the same proportion as the allocation of the proceeds. Issuance costs attributable to the liability component were $13.2 million and will be amortized, along with the debt discount to interest expense over the contractual term of the 2025 Notes at an effective interest rate of 5.97%. Issuance costs attributable to the equity component were $4.1 million and are netted against the equity component in additional paid-in capital.

On January 1, 2021 the Company adopted ASU No. 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU No. 2020-06”). As a result of the adoption, the debt conversion option of $177.2 million and debt issuance costs of $4.1 million previously attributable to the equity component are no longer presented in equity. Similarly, the debt discount, that is equal to the carrying value of the embedded conversion feature upon issuance, is no longer amortized into income as interest expense over the life of the instrument. This resulted in a $16.8 million decrease to the opening balance of accumulated deficit, a $173.1 million decrease to the opening balance of additional paid-in capital and a $156.3 million increase to the opening balance of convertible senior notes, net on the condensed consolidated balance sheet.

The net carrying amount of the liability component of the 2025 Notes was as follows (in thousands):


	June 30, 2022		December 31, 2021
Convertible senior notes, net:
Principal	$	747,496	$	747,500
Unamortized debt issuance costs	(10,336)		(12,018)
Net carrying amount	$	737,160	$	735,482

As of June 30, 2022, the total estimated fair value of the 2025 Notes was approximately $940.9 million. The fair value was determined based on the closing trading price per $100 of the 2025 Notes as of the last day of trading for the period. The fair value of the 2025 Notes is primarily affected by the trading price of the Company’s Class A common stock and market interest rates.

The following table sets forth the interest expense related to the 2025 Notes (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Contractual interest expense	$	233	$	233	$	467	$	467
Amortization of issuance costs	842		837		1,682		1,672
Total	$	1,075	$	1,070	$	2,149	$	2,139

Capped Calls

In connection with the pricing of the 2025 Notes, the Company entered into privately negotiated capped call transactions with certain counterparties (“Capped Calls”). The Capped Calls each have an initial strike price of approximately $92.30 per share, subject to certain adjustments, which corresponds to the initial conversion price of the 2025 Notes. The Capped Calls have initial cap prices of $151.04 per share, subject to certain adjustments. The Capped Calls are expected to partially offset the potential dilution to the Company’s Class A common stock upon any conversion of the 2025 Notes, with such offset subject to a cap based on the cap price. The Capped Calls cover, subject to anti-dilution adjustments, approximately 8.1 million shares of the Company’s Class A common stock. For accounting purposes, the Capped Calls are separate transactions, and not part of the 2025 Notes. As these transactions meet certain accounting criteria, the Capped Calls are recorded in stockholders' equity and are not accounted for as derivatives. The cost of $89.6 million incurred to purchase the Capped Calls was recorded as a reduction to additional paid-in capital and will not be remeasured.

8. Commitments and Contingencies

Non-cancelable Material Commitments—During the six months ended June 30, 2022, other than certain non-cancelable operating leases described in Note 9, Leases, there have been no other material changes outside the ordinary course of business to the Company's contractual obligations and commitments from those disclosed in the Annual Report.

401(k) Plan—The Company sponsors a 401(k) defined contribution plan covering all eligible U.S. employees. The Company is responsible for administrative costs of the 401(k) plan and beginning on January 1, 2022, the Company began making matching contributions to the 401(k) plan. For the three and six months ended June 30, 2022, the Company incurred expense of $1.5 million and $2.7 million, respectively, for matching contributions. The Company did not make any matching contributions to the 401(k) plan for the three and six months ended June 30, 2021.

Legal Matters—The Company is involved from time to time in various claims and legal actions arising in the ordinary course of business. While it is not feasible to predict or determine the ultimate outcome of these matters, the Company believes that none of its current legal proceedings will have a material adverse effect on its financial position or results of operations.

Indemnification—The Company enters into indemnification provisions under some agreements with other parties in the ordinary course of business, including business partners, investors, contractors, customers and the Company’s officers, directors and certain employees. The Company has agreed to indemnify and defend the indemnified party claims and related losses suffered or incurred by the indemnified party from actual or threatened third-party claim because of the Company’s activities or non-compliance with certain representations and warranties made by the Company. It is not possible to determine the maximum potential loss under these indemnification provisions due to the Company’s limited history of prior indemnification claims and the unique facts and circumstances involved in each particular provision. To date, losses recorded in the Company’s condensed consolidated statements of operations in connection with the indemnification provisions have not been material.

9. Leases

The Company has entered into various non-cancelable operating leases for its facilities expiring between 2022 and 2030. Certain lease agreements contain an option for the Company to renew a lease for a term of up to five years or an option to terminate a lease early within one year. The Company considers these options, which may be elected at the Company’s sole discretion, in determining the lease term on a lease-by-lease basis.

Lease expense for these leases is recognized on a straight-line basis over the lease term, with variable lease payments recognized in the period those payments are incurred.

The components of lease cost recognized within the Company’s condensed consolidated statements of operations were as follows (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Operating lease cost(1)	$	6,028	$	4,764	$	11,265	$	9,520

Short-term lease cost	2,155		662		3,324		1,454

1)Includes non-cash lease expense of $5.3 million and $4.1 million for the three months ended June 30, 2022 and 2021, respectively, and $9.7 million and $8.1 million for the six months ended June 30, 2022 and 2021, respectively.

Supplemental cash flow information and non-cash activity related to the Company’s operating leases are as follows (in thousands):


	Six Months Ended June 30,
	2022		2021
Cash paid for amounts included in measurement of lease liabilities	$	11,682	$	9,603
Operating lease assets obtained in exchange for new lease liabilities	13,129		—

Maturities of lease liabilities by fiscal year for the Company’s operating leases are as follows (in thousands):


	Amount
Remainder of 2022	$	13,168
2023	22,901
2024	13,322
2025	8,772
2026	6,693
2027 and beyond	17,622
Total lease payments	$	82,478
Less: imputed interest	(8,350)
Present value of lease liabilities	$	74,128

As of June 30, 2022, the Company had two additional operating leases that had not yet commenced, which are excluded from the table above. The operating leases will commence in fiscal year 2022 and have total undiscounted future payments of $10.8 million with a weighted-average lease term of 6.3 years.

In July 2022, the Company entered into an agreement to extend its New York headquarters lease and lease new floors within the same building. The Company expects delivery of the new floors in phases from 2022 to 2025, with the leases expiring in June 2033. The minimum commitment in connection with this lease is $182.3 million, which has been excluded from the table above as the lease has yet to commence.

Weighted average remaining lease term and discount rate for the Company’s operating leases are as follows:


	June 30, 2022
Weighted-average remaining lease term (years)	4.6
Weighted-average discount rate	4.46	%

10. Revenue

Geographical Information

Revenue by location is determined by the billing address of the customer. The following table sets forth revenue by geographic area (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
North America	$	291,159	$	168,196	$	551,021	$	311,085
International	114,979		65,353		218,147		121,013
Total	$	406,138	$	233,549	$	769,168	$	432,098

Deferred Revenue and Remaining Performance Obligations

Certain of the Company’s customers pay in advance of satisfaction of performance obligations and other customers with monthly contract terms are billed in arrears on a monthly basis. The Company records contract liabilities to deferred revenue when customers are billed or when the Company receives customer payments in advance of the performance obligations being satisfied on the Company’s contracts.

Revenue recognized during the three months ended June 30, 2022 and 2021, which was included in the deferred revenue balances at the beginning of each such period, was $198.3 million and $108.4 million, respectively. Revenue recognized during the six months ended June 30, 2022 and 2021 that was included in the deferred revenue balances at the beginning of each such period was $279.9 million and $158.8 million, respectively.

Remaining performance obligations represent the aggregate amount of the transaction price in contracts allocated to performance obligations not delivered, or partially undelivered, as of the end of the reporting period. Remaining performance obligations include unearned revenue, multi-year contracts with future installment payments and certain unfulfilled orders against accepted customer contracts at the end of any given period. As of June 30, 2022 and December 31, 2021, the aggregate transaction price allocated to remaining performance obligations was $881.4 million and $815.0 million, respectively. There is uncertainty in the timing of revenues associated with the Company’s drawdown contracts, as future revenue can often vary significantly from past revenue. However, the Company expects to recognize substantially all of the remaining performance obligations over the next 24 months.

Accounts Receivable

Accounts receivable deemed uncollectible are charged against the allowance for credit losses when identified. During the six months ended June 30, 2022 and 2021, the Company charged $0.9 million and $0.7 million, respectively, of accounts receivable deemed uncollectible against the allowance for credit losses.

Unbilled accounts receivable represents revenue recognized on contracts for which billings have not yet been presented to customers because the amounts were earned but not contractually billable as of the balance sheet date. The unbilled accounts

receivable balance is due within one year. As of June 30, 2022 and December 31, 2021, unbilled accounts receivable of approximately $58.2 million and $44.2 million, respectively, was included in accounts receivable on the Company’s condensed consolidated balance sheets.

Deferred Contract Costs

Sales commissions earned by the Company’s sales force are considered incremental and recoverable costs of obtaining a contract with a customer. These costs are deferred and then amortized over a period of benefit which is determined to be four years. Amounts expected to be recognized within one year of the balance sheet date are recorded as deferred contract costs, current; the remaining portion is recorded as deferred contract costs, non-current, in the condensed consolidated balance sheets.

Deferred contract costs on the Company’s condensed consolidated balance sheets were $74.2 million and $65.3 million as of June 30, 2022 and December 31, 2021, respectively. Amortization expense was $6.6 million and $4.1 million for the three months ended June 30, 2022 and 2021, respectively, and was $12.6 million and $7.9 million for the six months ended June 30, 2022 and 2021, respectively.

11.Stockholders’ Equity

Class A and Class B Common Stock

The Company has two classes of common stock, Class A and Class B. The rights of the holders of Class A and Class B common stock are identical, except with respect to voting and conversion. Each share of Class A common stock is entitled to one vote per share and each share of Class B common stock is entitled to ten votes per share. Shares of Class B common stock may be converted into Class A common stock at any time at the option of the stockholder, and are automatically converted to Class A common stock upon sale or transfer, subject to certain limited exceptions.

During the three and six months ended June 30, 2022, 6,284,309 shares and 24,393,510 shares of Class B common stock were converted into Class A common stock, respectively.

As of June 30, 2022, the Company had authorized 2,000,000,000 shares of Class A common stock and 310,000,000 shares of Class B common stock, each at a par value per share of $0.00001, of which 290,783,440 shares of Class A common stock and 25,632,342 shares of Class B common stock were issued and outstanding.

Equity Incentive Plans

The Company has two equity incentive plans, the 2012 Equity Incentive Plan (the “2012 Plan”) and the 2019 Equity Incentive Plan (the “2019 Plan”). In connection with the Company's initial public offering of Class A common stock (the "IPO"), the Company ceased granting awards under the 2012 Plan, and all shares that remained available for issuance under the 2012 Plan at that time were transferred to the 2019 Plan. Additionally, as of June 30, 2022, there were 19,567,562 shares of Class A common stock issuable upon conversion of Class B common stock underlying options outstanding under the 2012 Plan. Under the 2019 Plan, the Board and any other committee or subcommittee of the Board may grant stock options, stock appreciation rights, restricted stock awards, restricted stock units (“RSUs”) and performance stock units ("PSUs") and other awards, each equity award valued or based on the Company’s Class A common stock, to employees, directors, consultants and advisors of the Company. As of June 30, 2022, there were 67,352,167 shares available for grant under the 2019 Plan.

Stock Options

The following table summarizes the Company’s stock option activity and weighted-average exercise prices:


	Number Of Options Outstanding	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life (in Years)	Aggregate Intrinsic Value (in thousands)
Balance outstanding—December 31, 2021	21,372,561	$	3.31	5.5	$	3,735,819
Options granted	—	—
Options exercised	(1,673,753)	3.83
Options forfeited or expired	(101,980)	5.94
Balance outstanding—June 30, 2022	19,596,828	$	3.26	4.9	$	1,802,576
Ending Exercisable—June 30, 2022	16,977,114	$	2.37	4.6	$	1,576,610

As of June 30, 2022, there were 29,266 shares of Class A common stock and 19,567,562 shares of Class B common stock issuable upon the exercise of options outstanding. As of December 31, 2021, there were 31,671 shares of Class A common stock and 21,340,890 shares of Class B common stock issuable upon the exercise of options outstanding.

Total compensation cost related to unvested awards not yet recognized was approximately $20.0 million and $31.6 million as of June 30, 2022 and December 31, 2021, respectively. The weighted-average period over which this compensation cost related to unvested employee awards will be recognized is 0.9 years and 1.3 years as of June 30, 2022 and December 31, 2021, respectively.

There were no options granted during the six months ended June 30, 2022 and 2021. The Company received approximately $6.5 million and $6.2 million in cash proceeds from options exercised during the six months ended June 30, 2022 and 2021, respectively. The intrinsic value of options exercised during the six months ended June 30, 2022 and 2021 was approximately $217.0 million and $229.6 million, respectively. The aggregate fair value of options vested during the six months ended June 30, 2022 and 2021 was $12.7 million and $14.5 million, respectively.

Common stock purchased pursuant to an early exercise of stock options is not deemed to be outstanding for accounting purposes until those shares vest. The consideration received for an exercise of an option is considered to be a deposit of the exercise price and the related dollar amount is recorded as a liability. The shares issued upon the early exercise of these unvested stock option awards, which are reflected as exercises in the table above, are considered to be legally issued and outstanding on the date of exercise. Upon termination of service, the Company may repurchase unvested shares acquired through early exercise of stock options at a price equal to the price per share paid upon the exercise of such options. The Company has no liability recorded related to early exercises of options as of June 30, 2022. As of December 31, 2021, the Company had recorded liabilities related to early exercises of options for 31,500 shares of Class B common stock.

Restricted Stock Units, Restricted Stock Awards and Performance Stock Units

The following table summarizes the activity for the Company’s unvested RSUs and PSUs:


	Shares	Weighted- Average Grant Date Fair Value
Balance—December 31, 2021	8,081,269	$	101.21
Awarded	3,119,713	124.03
Vested	(1,039,058)	74.93
Forfeited/canceled	(422,308)	103.66
Unvested and outstanding—June 30, 2022	9,739,616	$	111.22

The Company granted 244,445, 96,210, 117,538, 245,761, 98,593, and 191,809 restricted shares of Class A common stock in November 2019, June 2020, February 2021, April 2021, December 2021, and June 2022, respectively, in connection with acquisitions which are subject to service-based vesting conditions over approximately four years from the respective grant dates.

Total compensation cost related to unvested RSUs, PSUs and restricted shares of common stock not yet recognized was approximately $976.8 million and $773.6 million as of June 30, 2022 and December 31, 2021, respectively. The weighted-average period over which this compensation cost related to unvested RSUs, PSUs and restricted shares will be recognized is 2.9 years and 3.1 years as of June 30, 2022 and December 31, 2021, respectively.

Employee Stock Purchase Plan

In September 2019, the Board adopted and approved the 2019 Employee Stock Purchase Plan (the “ESPP”), which became effective on the date of the final prospectus for the IPO.

The ESPP is implemented through a series of offerings under which eligible employees are granted purchase rights to purchase shares of the Company’s Class A common stock on specified dates during such offerings. Under the ESPP, the Company may specify offerings with durations of not more than 27 months, and may specify shorter purchase periods within each offering. On each purchase date, eligible employees will purchase the shares at a price per share equal to 85% of the lesser of (1) the fair market value of the Company’s Class A common stock on the first trading day of the offering period, or (2) the fair market value of the Company’s Class A common stock on the purchase date, as defined in the ESPP.

The Company recognized $2.5 million and $4.7 million of stock-based compensation expense related to the ESPP during the three and six months ended June 30, 2022, respectively. As of June 30, 2022, $4.7 million has been withheld on behalf of employees for a future purchase under the ESPP due to the timing of payroll deductions. During the three months ended June 30, 2022, the Company issued 146,515 shares of Class A common stock under the ESPP. As of June 30, 2022, 14,976,951 shares of Class A common stock remain available for grant under the ESPP.

Stock-Based Compensation

The Company uses the Black-Scholes option-pricing model to estimate the fair value of stock options on the date of grant. The Company recognizes and measures compensation expense for all stock-based payment awards granted to employees, directors and nonemployees based on the fair value of the awards on the date of grant. The determination of the grant date fair value using an option-pricing model is affected by the estimated fair value of the Company’s common stock as well as assumptions regarding a number of other complex and subjective variables. These variables include expected stock price volatility over the expected term of the award, actual and projected employee stock option exercise behaviors, the risk-free interest rate for the expected term of the award and expected dividends. The fair value of RSUs and PSUs is determined by the closing price on the date of grant of the Company’s Class A common stock, as reported on the Nasdaq Global Select Market. The Company estimates the fair value of the rights to acquire stock under the ESPP using the Black-Scholes option-pricing model. Stock-based compensation for stock options and RSUs is recognized on a straight-line basis over the requisite service period and account for forfeitures as they occur. Stock-based compensation for PSUs is amortized under the accelerated attribution method and may be adjusted over the vesting period based on interim estimates of performance against pre-set objectives. PSUs will vest upon achievement of specified performance targets and subject to continuous service through the applicable vesting dates. The compensation cost is recognized over the requisite service period when it is considered probable that the performance condition will be satisfied and account for forfeitures as they occur.

Stock-based compensation expense was included in the condensed consolidated statement of operations as follows (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Cost of revenue	$	2,355	$	829	$	4,008	$	1,530
Research and development	53,309		21,639		98,005		37,708
Sales and marketing	17,590		6,606		32,185		13,616
General and administrative	9,145		5,441		15,085		10,522
Stock-based compensation, net of amounts capitalized	82,399		34,515		149,283		63,376
Capitalized stock-based compensation expense	3,334		2,059		6,840		4,212
Total stock-based compensation expense	$	85,733	$	36,574	$	156,123	$	67,588

12.Interest Income and Other Income, Net

Interest income and other income, net consist of the following (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Interest income	$	6,755	$	5,242	$	12,251	$	11,140
Other income (loss), net	914		50		1,105		(75)
Interest income and other income, net	$	7,669	$	5,292	$	13,356	$	11,065

13.Income Taxes

The Company has an effective tax rate of (44,254.5)% and 3.1% for the three months ended June 30, 2022 and 2021, respectively. The Company has incurred U.S. operating losses and has minimal profits in its foreign jurisdictions during the quarter.

The Company has applied ASC 740, Income Taxes, and has determined that it has uncertain positions that would result in a tax reserve deemed immaterial for each of the six months ended June 30, 2022 and 2021. The Company’s policy is to recognize interest and penalties related to uncertain tax positions in income tax expense. The Company is subject to U.S. federal tax authority, U.S. state tax authority and foreign tax authority examinations.

The Company has evaluated the available evidence supporting the realization of its deferred tax assets, including the amount and timing of future taxable income, and has determined that it is more likely than not that its net deferred tax assets will not be realized in the United States. Due to uncertainties surrounding the realization of the deferred tax assets, the Company recorded a full valuation allowance against substantially all of its net deferred tax assets. When the Company determines that it will be able to realize some portion or all of its deferred tax assets, an adjustment to its valuation allowance on its deferred tax assets would have the effect of increasing net income in the period such determination is made.

For tax years beginning on or after January 1, 2022, the Tax Cuts and Jobs Act of 2017 eliminates the option to deduct research and development expenditures, as defined under IRC Section 174, in the year incurred. Instead, taxpayers are required to amortize such expenditures over five years if incurred in the U.S. and over fifteen years if incurred in a foreign jurisdiction. For the six months ended June 30, 2022, the Company conformed to this change in tax law.

14.Net (Loss) Income Per Share

Basic and diluted net (loss) income per common share is presented in conformity with the two-class method required for participating securities. Immediately prior to the consummation of the Company’s IPO in September 2019, all outstanding shares of convertible preferred stock and common stock were converted into shares of Class B common stock. As a result, Class A and Class B common stock are the only outstanding shares of capital stock of the Company.

Basic and diluted net (loss) income per share is computed using the weighted-average number of shares of common stock outstanding during the period. The undistributed earnings are allocated based on the contractual participation rights of the Class A and Class B common stock as if the earnings for the year have been distributed. As the liquidation and dividend rights are identical, the undistributed earnings are allocated on a proportionate basis. Further, as the conversion of Class B common stock is assumed in the computation of the diluted net (loss) income per share of Class A common stock, the undistributed earnings are equal to net (loss) income for that computation.

The following table presents the calculation of basic and diluted net (loss) income per share (in thousands, except per share data):


	Three Months Ended June 30,								Six Months Ended June 30,
	2022				2021				2022				2021
Basic net (loss) income per share:	Class A		Class B		Class A		Class B		Class A		Class B		Class A		Class B
Numerator:
Net (loss) income	$	(4,421)	$	(458)	$	(7,163)	$	(2,199)	$	4,281	$	578	$	(16,777)	$	(5,653)
Denominator:
Weighted-average shares used in calculating net income (loss) per share, basic	285,265		29,530		235,671		72,348		276,779		37,351		229,652		77,380
Basic net (loss) income per share	$	(0.02)	$	(0.02)	$	(0.03)	$	(0.03)	$	0.02	$	0.02	$	(0.07)	$	(0.07)
Diluted net (loss) income per share:
Numerator:
Allocation of distributed net (loss) income for basic computation	$	(4,421)	$	(458)	$	(7,163)	$	(2,199)	$	4,281	$	578	$	(16,777)	$	(5,653)
Reallocation of undistributed net (loss) income as a result of conversion of Class B to Class A shares	(458)		—		(2,199)		—		578		—		(5,653)		—
Allocation of undistributed (loss) income	$	(4,879)	$	(458)	$	(9,362)	$	(2,199)	$	4,859	$	578	$	(22,430)	$	(5,653)
Denominator:
Number of shares used in basic calculation	285,265		29,530		235,671		72,348		276,779		37,351		229,652		77,380
Weighted-average effect of diluted securities:
Conversion of Class B to Class A common shares outstanding	29,530		—		72,348		—		37,351		—		77,380		—
Employee stock options	—		—		—		—		19,602		—		—		—
Employee stock purchase plan	—		—		—		—		32		—		—		—
Unvested early exercises	—		—		—		—		5		—		—		—
Restricted stock units	—		—		—		—		2,955		—		—		—
Unvested restricted stock in connection with acquisition	—		—		—		—		622		—		—		—
Shares issuable upon conversion of the convertible senior notes	—		—		—		—		8,098		—		—		—
Number of shares used in diluted calculation	314,795		29,530		308,019		72,348		345,444		37,351		307,032		77,380
Diluted net (loss) income per share	$	(0.02)	$	(0.02)	$	(0.03)	$	(0.03)	$	0.01	$	0.02	$	(0.07)	$	(0.07)

Potentially dilutive securities that were not included in the diluted per share calculations because they would be anti-dilutive were as follows (in thousands):


	As of June 30,
	2022	2021
Shares subject to outstanding stock options and RSUs	2,127	31,118
Unvested early exercised stock options and restricted shares of common stock	—	959
Shares subject to the employee stock purchase plan	—	177
Shares issuable upon conversion of the convertible senior notes	—	8,098

Total	2,127	40,352

ASU No. 2020-06 requires the application of the if-converted method to calculate the impact of convertible instruments on diluted earnings per share when the instruments may be settled in cash or shares. The Company uses the if-converted method for calculating any potential dilutive effect of the conversion options embedded in the 2025 Notes on diluted net income per share as required under ASU No. 2020-06 to determine the dilutive effect of the Notes.

The Company entered into Capped Calls in connection with the issuance of the 2025 Notes. The effect of the Capped Calls was also excluded from the calculation of diluted net income per share as the effect of the Capped Calls would have been anti-dilutive. The Capped Calls are expected to partially offset the potential dilution to the Company’s Class A common stock upon any conversion of the 2025 Notes.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated financial statements and the related notes and the discussion under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, or the Annual Report. This discussion, particularly information with respect to our future results of operations or financial condition, business strategy, plans and objectives of management for future operations and the potential impact that the COVID-19 pandemic may have on our business, includes forward-looking statements that involve risks and uncertainties as described under the heading “Special Note Regarding Forward-Looking Statements” in this Quarterly Report on Form 10-Q. You should review the disclosure under the heading “Risk Factors” in this Quarterly Report on Form 10-Q for a discussion of important factors that could cause our actual results to differ materially from those anticipated in these forward-looking statements.

Overview

Datadog is the monitoring and security platform for cloud applications.

Our SaaS platform integrates and automates infrastructure monitoring, application performance monitoring, log management and security monitoring 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.

We generate revenue from the sale of subscriptions to customers using our cloud-based platform. The terms of our subscription agreements are primarily monthly or annual. Customers also have the option to purchase additional products, such as additional containers to monitor, custom metrics packages, anomaly detection and app analytics. Professional services are generally not required for the implementation of our products and revenue from such services has been immaterial to date. We employ a land-and-expand business model centered around offering products that are easy to adopt and have a very short time to value. Our customers can expand their footprint with us on a self-service basis. Our customers often significantly increase their usage of the products they initially buy from us and expand their usage to other products we offer on our platform. We grow with our customers as they expand their workloads in the public and private cloud.

As of June 30, 2022, we had $242.1 million in cash, cash equivalents and restricted cash and $1.5 billion in marketable securities. We generated revenue of $406.1 million and $233.5 million in the three months ended June 30, 2022 and 2021, respectively, representing year-over-year growth of 74%. For the six months ended June 30, 2022 and 2021, our revenue was $769.2 million and $432.1 million, respectively, representing year-over-year growth of 78%. Substantially all of our revenue is subscription software sales. Our net (loss) income was $(4.9) million and $(9.4) million for the three months ended June 30, 2022 and 2021, respectively, and $4.9 million and $(22.4) million for the six months ended June 30, 2022 and 2021, respectively. We generated operating cash flow of $220.3 million and $103.4 million in the six months ended June 30, 2022 and 2021, respectively. Our free cash flow was $190.1 million and $86.8 million in the six months ended June 30, 2022 and 2021, respectively. See the section titled “—Liquidity and Capital Resources—Non-GAAP Free Cash Flow” for additional information.

Since December 2019, a novel strain of coronavirus, which we refer to, together with other related strains of coronavirus, as "COVID-19", has spread across the world, including to the United States and other countries in which we and our customers, partners, suppliers, vendors and other parties with whom we do business operate. The extent of the impact of the COVID-19 pandemic on our operational and financial performance depends on certain developments, including the duration and spread of the outbreak, especially in light of the emergence of new variant strains of COVID-19, its impact on industry events, and its effect on our customers, partners, suppliers and vendors and other parties with whom we do business, and the availability, distribution and acceptance of vaccines, all of which are uncertain and cannot be predicted at this time. To the extent possible, we are conducting business as usual. Towards the end of the quarter ended March 31, 2022, we increased our office activity, such as in-person meetings, events, and travel in compliance with applicable government orders and guidelines. We are continuing to actively monitor the rapidly evolving situation related to COVID-19 and may take further actions that alter our business operations, including those that may be required by federal, state or local authorities, or that we determine are in the best interests of our employees, customers, partners, suppliers, vendors and stockholders. The extent to which the COVID-19 pandemic, including variant strains of COVID-19, may impact our results of operations and financial condition remains

uncertain. Due to our subscription model, the effect of the COVID-19 pandemic, if any, may not be fully reflected in our results of operations until future periods. In addition, as we continue to increase office activity globally, increase travel, participate in and hold more in-person meetings and events, continue hiring and increase capital expenditures for additional office space, our costs and expenses may increase and our margins may decrease in future quarters.

Factors Affecting Our Performance

Acquiring New Customers

We believe there is substantial opportunity to continue to grow our customer base. We intend to drive new customer acquisition by continuing to invest significantly in sales and marketing to engage our prospective customers, increase brand awareness and drive adoption of our platform and products. We also plan to continue to invest in building brand awareness within the development and operations communities. As of June 30, 2022, we had approximately 21,200 customers spanning organizations of a broad range of sizes and industries, compared to approximately 16,400 as of June 30, 2021. Our ability to attract new customers will depend on a number of factors, including the effectiveness and pricing of our products, offerings of our competitors and the effectiveness of our marketing efforts.

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.

Expanding Within Our Existing Customer Base

Our base of customers represents a significant opportunity for further sales expansion. As of June 30, 2022, we had approximately 2,420 customers with annual run-rate revenue, or ARR, of $100,000 or more, representing 85% of our ARR, up from 1,570 customers as of June 30, 2021, representing 80% of our ARR. We monitor our number of customers with ARR of $100,000 or more, and believe it is useful to investors, as an indicator of our ability to grow the number of customers that are exceeding this ARR threshold. We define ARR as the annual run-rate revenue of subscription agreements from all customers at a point in time. We calculate ARR by taking the monthly run-rate 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 retrospectively. 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.

A further indication of the propensity of our customer relationships to expand over time is our dollar-based net retention rate, which compares our ARR from the same set of customers in one period, relative to the year-ago period. As of each of June 30, 2022 and 2021, our dollar-based net retention rate was above 130%. We calculate dollar-based net retention rate as of a period end by starting with the ARR from the cohort of all customers as of 12 months prior to such period-end, or the Prior Period ARR. We then calculate the ARR from these same customers as of the current period-end, or the Current Period ARR. Current Period ARR includes any expansion and is net of contraction or attrition over the last 12 months, but excludes ARR from new customers in the current period. We then divide the total Current Period ARR by the total Prior Period ARR to arrive at the point-in-time dollar-based net retention rate. We then calculate the weighted average of the trailing 12-month point-in-time dollar-based net retention rates, to arrive at the dollar-based net retention rate.

We believe that our land-and-expand business model allows us to efficiently increase revenue from our existing customer base. Our customers often expand the deployment of our platform across large teams and more broadly within the enterprise as they migrate more workloads to the cloud, find new use cases for our platform, and generally realize the benefits of our platform. We intend to continue to invest in enhancing awareness of our brand and developing more products, features and functionality, which we believe are important factors to achieve widespread adoption of our platform. Our ability to increase sales to existing customers will depend on a number of factors, including our customers’ satisfaction with our solution, competition, pricing and overall changes in our customers’ spending levels.

Sustaining Innovation and Technology Leadership

Our success is dependent on our ability to sustain innovation and technology leadership in order to maintain our competitive advantage. We believe that we have built a highly differentiated platform that will position us to further extend the adoption of our platform and products. Datadog is frequently deployed across a customer’s entire infrastructure, making it ubiquitous. Datadog is a daily part of the lives of developers, operations engineers and business leaders. We employ a land-and-expand business model centered around offering products that are easy to adopt and have a very short time to value. Our efficient go-to-market model enables us to prioritize significant investment in innovation. We have proven initial success of our platform approach, through expansion beyond our initial infrastructure monitoring solution, to include APM in 2017, logs in 2018, user experience and network performance monitoring in 2019 and security monitoring in 2020. As of June 30, 2022, approximately 79% of our customers were using more than one product, up from approximately 75% a year earlier. We believe these metrics indicate strong momentum in the uptake of our newer platform products.

We intend to continue to invest in building additional products, features and functionality that expand our capabilities and facilitate the extension of our platform to new use cases. We also intend to continue to evaluate strategic acquisitions and investments in businesses and technologies to drive product and market expansion. Our future success is dependent on our ability to successfully develop, market and sell existing and new products to both new and existing customers.

Expanding Internationally

We believe there is a significant opportunity to expand usage of our platform outside of North America. Revenue, as determined based on the billing address of our customers, from regions outside of North America was approximately 28% of total revenue in each of the six months ended June 30, 2022 and 2021. In addition, we have made and plan to continue to make significant investments to expand geographically, particularly in the Europe, Middle East, and Africa and Asia-Pacific regions. Although these investments may adversely affect our operating results in the near term, we believe that they will contribute to our long-term growth. Beyond North America, we now have sales presence internationally, including in Amsterdam, Dublin, London, Paris, Seoul, Singapore, Sydney, and Tokyo.

Components of Results of Operations

Revenue

We generate revenue from the sale of subscriptions to customers using our cloud-based platform. The terms of our subscription agreements are primarily monthly, annual or multi-year, with the majority of our revenue coming from annual subscriptions. Our customers can enter into a subscription for a committed contractual amount of usage that is apportioned ratably on a monthly basis over the term of the subscription period, a subscription for a committed contractual amount of usage that is delivered as used, or a monthly subscription based on usage. To the extent that our customers’ usage exceeds the committed contracted amounts under their subscriptions, either on a monthly basis in the case of a ratable subscription or once the entire commitment is used in the case of a delivered-as-used subscription, they are charged for their incremental usage.

Usage is measured primarily by the number of hosts or by the volume of data indexed. A host is generally defined as a server, either in the cloud or on-premise. Our infrastructure monitoring, APM and network performance monitoring products are priced per host, our logs product is priced primarily per log events indexed and secondarily by events ingested. Customers also have the option to purchase additional products, such as additional container or serverless monitoring, custom metrics packages, anomaly detection, synthetic monitoring and app analytics.

In the case of subscriptions for committed contractual amounts of usage, revenue is recognized ratably over the term of the subscription agreement, generally beginning on the date that our platform is made available to a customer. As a result, much of our revenue is generated from subscriptions entered into during previous periods. Consequently, any decreases in new subscriptions or renewals in any one period may not be immediately reflected as a decrease in revenue for that period, but could negatively affect our revenue in future quarters. This also makes it difficult for us to rapidly increase our revenue through the sale of additional subscriptions in any period, as revenue is recognized over the term of the subscription agreement. In the case of a subscription for a committed contractual amount of usage that is delivered as used, a monthly subscription based on usage, or usage in excess of a ratable subscription, we recognize revenue as the product is used, which may lead to fluctuations in our revenue and results of operations. In addition, historically, we have experienced seasonality in new customer bookings, as we typically enter into a higher percentage of subscription agreements with new customers in the fourth quarter of the year.

Due to ease of implementation of our products, professional services generally are not required and revenue from such services has been immaterial to date.

Cost of Revenue

Cost of revenue primarily consists of expenses related to providing our products to customers, including payments to our third-party cloud infrastructure providers for hosting our software, personnel-related expenses for operations and global support, including salaries, benefits, bonuses and stock-based compensation, payment processing fees, information technology, depreciation and amortization related to the amortization of acquired intangibles and internal-use software and other overhead costs such as allocated facilities.

We intend to continue to invest additional resources in our platform infrastructure and our customer support and success organizations to expand the capability of our platform and ensure that our customers are realizing the full benefit of our platform and products. The level, timing and relative investment in our infrastructure could affect our cost of revenue in the future.

Gross Profit and Gross Margin

Gross profit represents revenue less cost of revenue. Gross margin is gross profit expressed as a percentage of revenue. Our gross margin may fluctuate from period to period as our revenue fluctuates, and as a result of the timing and amount of investments to expand our products and geographical coverage.

Operating Expenses

Our operating expenses consist of research and development, sales and marketing and general and administrative expenses. Personnel costs are the most significant component of operating expenses and consist of salaries, benefits, bonuses, stock-based compensation expense and sales commissions. Operating expenses also include overhead costs for facilities and shared IT related expenses, including depreciation expense.

Research and Development

Research and development expense consists primarily of personnel costs for our engineering, service and design teams. Additionally, research and development expense includes contractor fees, depreciation and amortization and allocated overhead costs. Research and development costs are expensed as incurred. We expect that our research and development expense will increase in absolute dollars as our business grows, particularly as we incur additional costs related to continued investments in our platform.

Sales and Marketing

Sales and marketing expense consists primarily of personnel costs for our sales and marketing organization, costs of general marketing and promotional activities, including the free tier and free introductory trials of our products, travel-related expenses, amortization of acquired customer relationships and allocated overhead costs. Sales commissions earned by our sales force are deferred and amortized on a straight-line basis over the expected period of benefit, which we have determined to be four years. We expect that our sales and marketing expense will increase in absolute dollars as we expand our sales and marketing efforts.

General and Administrative

General and administrative expense consists primarily of personnel costs and contractor fees for finance, legal, human resources, information technology and other administrative functions. In addition, general and administrative expense includes non-personnel costs, such as legal, accounting and other professional fees, hardware and software costs, certain tax, license and insurance-related expenses and allocated overhead costs.

We have incurred, and expect to continue to incur, additional expenses as a result of operating as a public company, including costs to comply with the rules and regulations applicable to companies listed on a national securities exchange, costs related to compliance and reporting obligations and increased expenses for insurance, investor relations and professional services. We expect that our general and administrative expense will increase in absolute dollars as our business grows.

Other Income, Net

Other income, net consists of interest income, primarily due to income earned on money market funds included in cash and cash equivalents and on marketable securities, partially offset by interest expense due on the 2025 Notes (as defined below) and amortization of premiums on our marketable securities.

(Provision for) Benefit from Income Taxes

(Provision for) benefit from income taxes consists of U.S. federal and state income taxes and income taxes in certain foreign jurisdictions in which we conduct business. We recorded a full valuation allowance on our federal and state deferred tax assets as we have concluded that it is not more likely than not that the deferred tax assets will be realized.

Results of Operations

The following table sets forth our consolidated statements of operations data for the periods indicated:


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(in thousands)
Revenue	$	406,138	$	233,549	$	769,168	$	432,098
Cost of revenue (1)(2)(3)	81,925		57,098		156,387		103,764
Gross profit	324,213		176,451		612,781		328,334
Operating expenses
Research and development (1)(3)	177,699		94,779		328,307		174,045
Sales and marketing (1)(2)(3)	115,270		70,412		216,436		134,765
General and administrative (1)(3)	34,383		21,146		60,763		42,240
Total operating expenses	327,352		186,337		605,506		351,050
Operating (loss) income	(3,139)		(9,886)		7,275		(22,716)
Other income:
Interest expense (4)	(4,541)		(5,064)		(9,788)		(10,536)
Interest income and other income, net	7,669		5,292		13,356		11,065
Other income, net	3,128		228		3,568		529
(Loss) income before (provision for) benefit from income taxes	(11)		(9,658)		10,843		(22,187)
(Provision for) benefit from income taxes	(4,868)		296		(5,984)		(243)
Net (loss) income	$	(4,879)	$	(9,362)	$	4,859	$	(22,430)

_________________

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


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(in thousands)
Cost of revenue	$	2,355	$	829	$	4,008	$	1,530
Research and development	53,309		21,639		98,005		37,708
Sales and marketing	17,590		6,606		32,185		13,616
General and administrative	9,145		5,441		15,085		10,522
Total	$	82,399	$	34,515	$	149,283	$	63,376

_________________

(2)Includes amortization of acquired intangibles expense as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(in thousands)
Cost of revenue	$	1,482	$	908	$	2,895	$	1,263
Sales and marketing	206		163		409		$	163
Total	$	1,688	$	1,071	$	3,304	$	1,426

_________________

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


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(in thousands)
Cost of revenue	$	70	$	96	$	172	$	191
Research and development	2,829		2,101		6,126		3,872
Sales and marketing	605		2,776		1,714		3,955
General and administrative	217		194		474		318
Total	$	3,721	$	5,167	$	8,486	$	8,336

_________________

(4) Includes amortization of issuance costs as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(in thousands)
Interest expense	$	842	$	837	$	1,682	$	1,672

The following table sets forth our consolidated statements of operations data expressed as a percentage of revenue for the periods indicated:


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(as a percentage of total revenue(1))
Revenue	100	%	100	%	100	%	100	%
Cost of revenue	20		24		20		24
Gross profit	80		76		80		76
Operating expenses
Research and development	44		41		43		40
Sales and marketing	28		30		28		31
General and administrative	8		9		8		10
Total operating expenses	81		80		79		81
Operating (loss) income	(1)		(4)		1		(5)
Other income:
Interest expense	(1)		(2)		(1)		(2)
Interest income and other income, net	2		2		2		3
Other income, net	1		0		0		1
(Loss) income before (provision for) benefit from income taxes	0		(4)		1		(4)
(Provision for) benefit from income taxes	(1)		0		(1)		(1)
Net (loss) income	(1)	%	(4)	%	1	%	(5)	%

_________________

(1)Certain items may not total due to rounding.

Comparison of the Three Months Ended June 30, 2022 and 2021

Revenue


	Three Months Ended June 30,
	2022		2021		Change		% Change
	(dollars in thousands)
Revenue	$	406,138	$	233,549	$	172,589	74	%

Revenue increased by $172.6 million, or 74%, for the three months ended June 30, 2022 compared to the three months ended June 30, 2021. Approximately 80% of the increase in revenue was attributable to growth from existing customers, and the remaining 20% was attributable to growth from new customers.

Cost of Revenue and Gross Margin


	Three Months Ended June 30,
	2022			2021			Change		% Change
	(dollars in thousands)
Cost of revenue	$	81,925		$	57,098		$	24,827	43	%
Gross margin	80		%	76		%

Cost of revenue increased by $24.8 million, or 43%, for the three months ended June 30, 2022 compared to the three months ended June 30, 2021. This increase was primarily due to an increase of $18.2 million in third-party cloud infrastructure hosting and software costs, an increase of $3.4 million in personnel expenses as a result of increased headcount, and an increase of $1.7 million in depreciation and amortization expense.

Our gross margin increased by 4% for the three months ended June 30, 2022 compared to the three months ended June 30, 2021, primarily as a result of increased revenue and cost savings from our third-party cloud infrastructure providers.

Research and Development


	Three Months Ended June 30,
	2022			2021			Change		% Change
	(dollars in thousands)
Research and development	$	177,699		$	94,779		$	82,920	87	%
Percentage of revenue	44		%	41		%

Research and development expense increased by $82.9 million, or 87%, for the three months ended June 30, 2022 compared to the three months ended June 30, 2021. This increase was primarily due to an increase of $66.1 million in personnel costs for our engineering, product and design teams as a result of increased headcount, an increase of $11.4 million in cloud infrastructure-related investments, and an increase of $4.4 million in allocated overhead costs as a result of an increase in overall costs necessary to support the growth of the business and related infrastructure.

Sales and Marketing


	Three Months Ended June 30,
	2022			2021			Change		% Change
	(dollars in thousands)
Sales and marketing	$	115,270		$	70,412		$	44,858	64	%
Percentage of revenue	28		%	30		%

Sales and marketing expense increased by $44.9 million, or 64%, for the three months ended June 30, 2022 compared to the three months ended June 30, 2021. This increase was primarily due to an increase of $37.3 million in personnel costs for our sales and marketing organization as a result of increased headcount and increased variable compensation for our sales

personnel, an increase of $4.2 million in allocated overhead costs as a result of an increase in overall costs necessary to support the growth of the business and related infrastructure, and an increase of $1.8 million in advertising, marketing, and promotional activities.

General and Administrative


	Three Months Ended June 30,
	2022			2021			Change		% Change
	(dollars in thousands)
General and administrative	$	34,383		$	21,146		$	13,237	63	%
Percentage of revenue	8		%	9		%

General and administrative expense increased by $13.2 million, or 63%, for the three months ended June 30, 2022 compared to the three months ended June 30, 2021. This increase was primarily due to an increase of $10.3 million in personnel costs as a result of increased headcount and an increase of $0.6 million related to bad debt expense.

Other Income, Net


	Three Months Ended June 30,
	2022			2021			Change		% Change
	(dollars in thousands)
Other income, net	$	3,128		$	228		$	2,900	1,272	%
Percentage of revenue	1		%	0		%

Other income, net increased by $2.9 million, or 1,272%, for the three months ended June 30, 2022 compared to the three months ended June 30, 2021. This increase was primarily driven by an increase of $1.5 million in interest income, mainly due to income earned from investments in marketable securities, and a decrease of $0.5 million in amortization of premiums on our marketable securities.

Comparison of the Six Months Ended June 30, 2022 and 2021

Revenue


	Six Months Ended June 30,
	2022		2021		Change		% Change
	(dollars in thousands)
Revenue	$	769,168	$	432,098	$	337,070	78	%

Revenue increased by $337.1 million, or 78%, in the six months ended June 30, 2022 compared to the six months ended June 30, 2021. Approximately 80% of the increase in revenue was attributable to growth from existing customers, and the remaining 20% was attributable to growth from new customers.

Cost of Revenue and Gross Margin


	Six Months Ended June 30,
	2022			2021			Change		% Change
	(dollars in thousands)
Cost of revenue	$	156,387		$	103,764		$	52,623	51	%
Gross margin	80		%	76		%

Cost of revenue increased by $52.6 million, or 51%, in the six months ended June 30, 2022 compared to the six months ended June 30, 2021. This increase was primarily due to an increase of $40.6 million in third-party cloud infrastructure hosting and software costs, an increase of $5.4 million in personnel expenses as a result of increased headcount, an increase of $3.5

million of depreciation and amortization, and an increase of $3.1 million of credit card processing fees and allocated overhead costs.

Our gross margin increased 4% for the six months ended June 30, 2022 compared to the six months ended June 30, 2021, primarily as a result of increased revenue and cost savings from our third-party cloud infrastructure providers.

Research and Development


	Six Months Ended June 30,
	2022			2021			Change		% Change
	(dollars in thousands)
Research and development	$	328,307		$	174,045		$	154,262	89	%
Percentage of revenue	43		%	40		%

Research and development expense increased by $154.3 million, or 89%, in the six months ended June 30, 2022 compared to the six months ended June 30, 2021. This increase was primarily due to an increase of $123.4 million in personnel costs for our engineering, product and design teams as a result of increased headcount, an increase of $22.0 million in cloud infrastructure-related investments, and an increase of $7.0 million in allocated overhead costs as a result of an increase in overall costs necessary to support the growth of the business and related infrastructure.

Sales and Marketing


	Six Months Ended June 30,
	2022			2021			Change		% Change
	(dollars in thousands)
Sales and marketing	$	216,436		$	134,765		$	81,671	61	%
Percentage of revenue	28		%	31		%

Sales and marketing expense increased by $81.7 million, or 61%, in the six months ended June 30, 2022 compared to the six months ended June 30, 2021. This increase was primarily due to an increase of $69.6 million in personnel costs for our sales and marketing organization as a result of increased headcount and increased variable compensation for our sales personnel, an increase of $6.4 million in allocated overhead costs as a result of an increase in overall costs necessary to support the growth of the business and related infrastructure, and an increase of $2.4 million in advertising, marketing and promotional activities.

General and Administrative


	Six Months Ended June 30,
	2022			2021			Change		% Change
	(dollars in thousands)
General and administrative	$	60,763		$	42,240		$	18,523	44	%
Percentage of revenue	8		%	10		%

General and administrative expense increased by $18.5 million, or 44%, in the six months ended June 30, 2022 compared to the six months ended June 30, 2021. This increase was primarily due to an increase of $15.9 million in personnel expenses as a result of increased headcount, an increase of $1.5 million related to other costs and allocated overhead costs to support the growing business, and an increase of $1.4 million related to bad debt expense.

Other Income, Net


	Six Months Ended June 30,
	2022			2021			Change		% Change
	(dollars in thousands)
Other income, net	$	3,568		$	529		$	3,039	574	%
Percentage of revenue	0		%	0		%

Other income, net increased by $3.0 million in the six months ended June 30, 2022 compared to the six months ended June 30, 2021. This increase was primarily driven by an increase of $1.1 million in interest income, mainly due to income earned from investments in marketable securities, and a decrease of $0.8 million in amortization of premiums on our marketable securities.

Liquidity and Capital Resources

Our largest source of operating cash is cash collection from sales of subscriptions to our customers. Our primary uses of cash from operating activities are for personnel expenses, hosting expenses, facility expenses, and marketing expenses. We have generated positive cash flows from operations during the six months ended June 30, 2022 and 2021, and have historically supplemented working capital requirements through net proceeds from the sale of debt and equity securities. When assessing sources of liquidity, we also include cash and cash equivalents of $238.9 million and marketable securities of $1.5 billion as of June 30, 2022. We believe that our existing cash and cash equivalents, marketable securities and cash flow from operations will be sufficient to support our cash requirements for the next 12 months and beyond.

Our working capital requirements are principally comprised of workforce salaries, bonuses, commissions, and benefits and, to a lesser extent, cancellable and non-cancelable licenses and services arrangements that are integral to our business operations, and operating lease obligations. Our principal commitments consist of purchase commitments for business operations, operating lease obligations, and obligations to pay the 2025 Notes' coupons and principal. Purchase commitments for business operations are primarily related to cloud hosting and other software-based services. In June 2020, we issued $747.5 million aggregate principal amount of the 2025 Notes in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act. In July 2022, the Company entered into an agreement to extend its New York headquarters lease and lease new floors within the same building. The minimum commitment in connection with this lease is $182.3 million.

During the six months ended June 30, 2022, there have been no material changes outside the ordinary course of business to our contractual obligations and commitments, as disclosed in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the Annual Report.

Cash Flows

The following table shows a summary of our cash flows for the periods presented:


	Six Months Ended June 30,
	2022		2021
	(in thousands)
Cash provided by operating activities	$	220,348	$	103,373
Cash used in investing activities	(269,872)		(96,029)
Cash provided by financing activities	20,005		15,711

Operating Activities

Net cash provided by operating activities for the six months ended June 30, 2022 increased $117.0 million compared to the six months ended June 30, 2021, primarily driven by an increase in non-cash charges of $98.9 million, an increase in accounts payable of $15.8 million, and an increase in deferred revenue of $15.5 million. The increase in non-cash charges related primarily to an increase of $85.9 million in stock-based compensation as we continued to increase headcount to support the growth of the business. The increase in deferred revenue resulted primarily from increased billings for subscriptions. The increase in cash provided by operating activities was offset by an increase in accounts receivable of $13.2 million due to increases in sales.

Investing Activities

Net cash used in investing activities for the six months ended June 30, 2022 increased $173.8 million compared to the six months ended June 30, 2022, primarily driven by an increase in the investment in marketable securities of $227.8 million, a decrease in proceeds from maturities of marketable securities of $53.5 million, a decrease in proceeds from the sale of marketable securities of $39.7 million, and an increase in purchases of property and equipment of $11.3 million. The increase in cash used in investing activities was offset by a decrease in cash paid for the acquisition of businesses net of cash acquired of $160.8 million.

Financing Activities

Net cash provided by financing activities for the six months ended June 30, 2022 increased $4.3 million compared to the six months ended June 30, 2022, primarily due to an increase in proceeds from the issuance of Class A common stock under the ESPP of $3.8 million and proceeds from the exercise of stock options of $0.3 million.

Non-GAAP Free Cash Flow

We report our financial results in accordance with GAAP. To supplement our condensed consolidated financial statements, we provide investors with the amount of free cash flow, which is a non-GAAP financial measure. Free cash flow represents net cash provided by operating activities, reduced by capital expenditures and capitalized software development costs, if any. Free cash flow is a measure used by management to understand and evaluate our liquidity and to generate future operating plans. The reduction of capital expenditures and amounts capitalized for software development facilitates comparisons of our liquidity on a period-to-period basis and excludes items that we do not consider to be indicative of our liquidity. We believe that free cash flow is a measure of liquidity that provides useful information to our management, board of directors, investors and others 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. Nevertheless, our use of free cash flow has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our financial results as reported under GAAP. Further, our definition of free cash flow may differ from the definitions used by other companies and therefore comparability may be limited. You should consider free cash flow alongside our other GAAP-based financial performance measures, such as net cash used in operating activities, and our other GAAP financial results.

The following table presents a reconciliation of free cash flow to net cash provided by operating activities, the most directly comparable financial measure calculated in accordance with GAAP:


	Six Months Ended June 30,
	2022		2021
	(in thousands)
Net cash provided by operating activities	$	220,348	$	103,373
Less: Purchases of property and equipment	(15,501)		(4,227)
Less: Capitalized software development costs	(14,780)		(12,392)
Free cash flow	$	190,067	$	86,754

Critical Accounting Estimates

Our condensed consolidated financial statements are prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses and related disclosures. We evaluate our estimates and assumptions on an ongoing basis. Our estimates are based on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Our actual results could differ from these estimates.

There have been no material changes to our critical accounting policies from those disclosed in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the Annual Report.

Recently Adopted Accounting Pronouncements

See Note 2, Basis of Presentation and Summary of Significant Accounting Policies, in our Notes to Unaudited Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for a discussion of recent accounting pronouncements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to market risks in the ordinary course of our business. Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure is primarily the result of fluctuations in interest rates and foreign currency exchange rates.

Interest Rate Risk

As of June 30, 2022, we had $208.7 million in cash equivalents and $1.5 billion in marketable securities, which consisted of commercial debt, certificates of deposit, U.S. and non-U.S. government treasury securities, and commercial paper. In addition, we had $3.2 million of restricted cash due to the outstanding letters of credit established in connection with lease agreements for our facilities. Our cash and cash equivalents are held for working capital purposes. We do not enter into investments for trading or speculative purposes. Our investments are exposed to market risk due to a fluctuation in interest rates, which may affect our interest income and the fair market value of our investments. As of June 30, 2022, a hypothetical 10% relative change in interest rates would not have a material impact on our condensed consolidated financial statements.

On June 2, 2020, we issued $747.5 million aggregate principal amount of the 2025 Notes. The fair value of the 2025 Notes is subject to interest rate risk, market risk and other factors due to the conversion feature. The fair value of the 2025 Notes will generally increase as our Class A common stock price increases and will generally decrease as our Class A common stock price declines. The interest and market value changes affect the fair value of the 2025 Notes but do not impact our financial position, cash flows, or results of operations due to the fixed nature of the debt obligation.

Foreign Currency Exchange Risk

Our reporting currency and the functional currency of our wholly-owned foreign subsidiaries is the U.S. dollar. All of our sales are denominated in U.S. dollars, and therefore our revenue is not currently subject to significant foreign currency risk. Our operating expenses are denominated in the currencies of the countries in which our operations are located, which are primarily in the United States, France, Ireland, and the United Kingdom. Our consolidated results of operations and cash flows are, therefore, subject to fluctuations due to changes in foreign currency exchange rates and may be adversely affected in the future due to changes in foreign exchange rates. To date, we have not entered into any hedging arrangements with respect to foreign currency risk or other derivative financial instruments, although we may choose to do so in the future. A hypothetical 10% increase or decrease in the relative value of the U.S. dollar to other currencies would not have a material effect on our operating results.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain “disclosure controls and procedures,” as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act, that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2022. Based on the evaluation of our disclosure controls and procedures as of June 30, 2022, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control Over Financial Reporting

There was no change in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the period covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

Our management, including our Chief Executive Officer and Chief Financial Officer, believes that our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving their objectives and are effective at the reasonable assurance level. However, our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision making can be faulty and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

PART II-OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time we may become involved in legal proceedings or be subject to claims arising in the ordinary course of our business. We are not presently a party to any legal proceedings that, if determined adversely to us, would individually or taken together have a material adverse effect on our business, operating results, cash flows or financial condition. Defending such proceedings is costly and can impose a significant burden on management and employees. The results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.

ITEM 1A. RISK FACTORS

Our operations and financial results are subject to various risks and uncertainties including those described below. You should consider carefully the risks and uncertainties described below, in addition to other information contained in this Quarterly Report on Form 10-Q, including our condensed consolidated financial statements and related notes. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, may also become important factors that adversely affect our business. If any of the following risks or others not specified below materialize, our business, financial condition and results of operations could be materially and adversely affected. In that case, the trading price of our Class A common stock could decline.

Risk Factors Summary

The following is a summary of the principal risks associated with an investment in our Class A common stock:

•The COVID-19 pandemic and any related economic downturn could negatively impact our business, financial condition and results of operations.

•Unfavorable conditions in our industry or the global economy, or reductions in information technology spending, could limit our ability to grow our business and negatively affect our results of operations.

•Our recent rapid growth may not be indicative of our future growth. Our rapid growth also makes it difficult to evaluate our future prospects and may increase the risk that we will not be successful.

•We have a history of operating losses and may not achieve or sustain profitability in the future.

•We have a limited operating history, which makes it difficult to forecast our future results of operations.

•We may require additional capital to support the growth of our business, and this capital might not be available on acceptable terms, if at all.

•Our business depends on our existing customers purchasing additional subscriptions and products from us and renewing their subscriptions. If our customers do not renew or expand their subscriptions with us, our future operating results would be harmed.

•If we are unable to attract new customers, our business, financial condition and results of operations will be adversely affected.

•Failure to effectively develop and expand our sales and marketing capabilities could harm our ability to increase our customer base and achieve broader market acceptance of our products.

•If we or our third-party service providers experience, or are unable to protect against cyber attacks, ransomware, security incidents, or security breaches, or if unauthorized parties otherwise obtain access to our customers’ data, our data, or our platform and information technology systems, then our solution may be perceived as not being secure, our reputation may be harmed, demand for our platform and products may be reduced, and we may incur significant liabilities or additional expenses.

•Interruptions or performance problems associated with our products and platform capabilities may adversely affect our business, financial condition and results of operations.

•We may not be able to successfully manage our growth, and if we are not able to grow efficiently, our business, financial condition and results of operations could be harmed.

•If we fail to adapt and respond effectively to rapidly changing technology, evolving industry standards, changing regulations, or to changing customer needs, requirements or preferences, our platform and products may become less competitive.

•The markets in which we participate are competitive, and if we do not compete effectively, our business, financial condition and results of operations could be harmed.

•The dual class structure of our common stock has the effect of concentrating voting control with holders of our Class B common stock, including our executive officers, directors and their affiliates, which will limit the ability of holders of our Class A common stock to influence the outcome of important transactions.

Risks Related to the "COVID-19" Pandemic

The COVID-19 pandemic and any related economic downturn could negatively impact our business, financial condition and results of operations.

The COVID-19 pandemic has and may continue to prevent us or our employees, customers, partners, suppliers or vendors or other parties with whom we do business from conducting certain marketing and other business activities for an indefinite period of time, which could adversely impact our business, financial position and results of operations. Further, in response to the COVID-19 pandemic, including the emergence and spread of new variant strains of COVID-19, many state, local and foreign governments put in place, and others in the future may put in place, quarantines, executive orders, shelter-in-place orders, occupancy limits, vaccination mandates and similar government orders and restrictions in order to control the spread of the disease. Such orders or restrictions, or the perception that such orders or restrictions could occur or reoccur, have resulted in business closures, work stoppages, slowdowns and delays, work-from-home policies, travel restrictions and cancellation of events, among other effects that could negatively impact productivity and disrupt our operations or those of our customers, partners, suppliers or vendors or other parties with whom we do business.

Beginning in March 2020, we took measures intended to help minimize the risk of the virus to our employees and the communities in which we participate. These measures included temporarily suspending all non-essential travel worldwide for our employees, canceling, postponing or holding virtually any Datadog events and discouraging employee attendance at any industry events or in-person work-related meetings. Towards the end of the quarter ended March 31, 2022, we increased our office activity, such as in-person meetings and events, and we have also resumed travel in compliance with applicable government orders and guidelines. However, many of our employees continue to work remotely and in-person meetings remain limited relative to levels before the pandemic. We have a distributed workforce and our employees are accustomed to working remotely and working with others who are working remotely. However, the limitation of in-person meetings could negatively impact our marketing efforts, the length or variability of our sales cycles, our international expansion efforts or the length of our average recruiting cycle for employees across the organization. Further, operational or other challenges could arise as we and our customers, partners, suppliers and vendors and other parties with whom we do business continue to operate via a remote workforce. In addition, our management team has, and will likely continue, to spend significant time, attention and resources monitoring the COVID-19 pandemic and seeking to manage its effects on our business and workforce.

COVID-19 has adversely affected workforces, economies and financial markets globally, leading to an economic downturn and a reduction in customer spending on our solutions or an inability for our customers, partners, suppliers or vendors or other parties with whom we do business to meet their contractual obligations, and such conditions may reoccur. While it is not possible at this time to predict the duration and extent of the impact that COVID-19 could have on worldwide economic activity and our business in particular, the continued spread of COVID-19, especially in light of the emergence of new variant strains of COVID-19, and the measures taken by governments, businesses and other organizations in response to COVID-19, as well as the uncertainty around the duration of business disruptions, and rates of vaccination could adversely impact our business, financial condition and results of operations. For example, during the second quarter of 2020, we experienced some impact to the rate of usage growth from our existing customers. In addition, we have provided and may continue to provide guidance about our business and future operating results, which is based on certain assumptions, estimates and expectations as of the date such guidance is given. Guidance is necessarily speculative in nature, and is inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control, such as the global economic uncertainty and financial market conditions caused by the COVID-19 pandemic. If we were to revise or fail to meet our announced guidance or expectations of analysts as a result of these factors, the price of our Class A common stock could be negatively affected. Moreover, to the extent the COVID-19 pandemic adversely affects our business, financial condition and results of operations, it may also have the effect of heightening many of the other risks described in this “Risk Factors” section, including but not limited to, those related to our ability expand within our existing customer base, acquire new customers, develop and expand our sales and marketing capabilities and expand internationally.

Unfavorable conditions in our industry or the global economy, or reductions in information technology spending, could limit our ability to grow our business and negatively affect our results of operations.

Our results of operations may vary based on the impact of unfavorable changes in our industry or the global economy on us or our customers and potential customers. Unfavorable conditions in the economy both in the United States and abroad, including conditions resulting from changes in gross domestic product growth in the United States or abroad, financial and credit market fluctuations, inflation, rising interest rates, international trade relations, political turmoil, natural catastrophes, outbreaks of contagious diseases (such as the COVID-19 pandemic), warfare and terrorist attacks on the United States, Europe, the Asia Pacific region or elsewhere, could cause a decrease in business investments, including spending on information technology, disrupt the timing and cadence of key industry events, and negatively affect the growth of our business and our results of operations. The war in Ukraine and the related political and economic responses imposed on Russia such as sanctions, may exacerbate these issues and trends especially in Europe. More recently, in response to persistently high inflation, the U.S. Federal Reserve has increased interest rates, which may reduce economic growth and cause companies to decrease spending on information technology. These types of unfavorable conditions could disrupt the timing of and attendance at key industry events, which we rely upon in part to generate sales of our products. If those events are disrupted, our marketing investments, sales pipeline and ability to generate new customers and sales of our products could be negatively and adversely affected. Our competitors, many of whom are larger and have greater financial resources than we do, may respond to challenging market conditions by lowering prices in an attempt to attract our customers and may be less dependent on key industry events to generate sales for their products. The increased pace of consolidation in certain industries may result in reduced overall spending on our products and solutions. We cannot predict the timing, strength, or duration of any economic slowdown, instability, or recovery, generally or how any such event may impact our business.

Risks Associated with our Growth

Our recent rapid growth may not be indicative of our future growth. Our rapid growth also makes it difficult to evaluate our future prospects and may increase the risk that we will not be successful.

Our revenue was $769.2 million, $432.1 million, $1,028.8 million and $603.5 million for the six months ended June 30, 2022 and 2021 and the years ended December 31, 2021 and 2020, respectively. You should not rely on the revenue growth of any prior quarterly or annual period as an indication of our future performance. Even if our revenue continues to increase, we expect that our revenue growth rate will decline in the future as a result of a variety of factors, including the maturation of our business. Overall growth of our revenue depends on a number of factors, including our ability to:

•price our products effectively so that we are able to attract new customers and expand sales to our existing customers;

•expand the functionality and use cases for the products we offer on our platform;

•maintain and expand the rates at which customers purchase and renew subscriptions to our platform;

•provide our customers with support that meets their needs;

•continue to introduce our products to new markets outside of the United States;

•successfully identify and acquire or invest in businesses, products or technologies that we believe could complement or expand our platform; and

•increase awareness of our brand on a global basis and successfully compete with other companies.

We may not successfully accomplish any of these objectives, and as a result, it is difficult for us to forecast our future results of operations. If the assumptions that we use to plan our business are incorrect or change in reaction to changes in our market, or if we are unable to maintain consistent revenue or revenue growth, our stock price could be volatile, and it may be difficult to achieve and maintain profitability. You should not rely on our revenue for any prior quarterly or annual periods as any indication of our future revenue or revenue growth.

In addition, we expect to continue to expend substantial financial and other resources on:

•our technology infrastructure, including systems architecture, scalability, availability, performance and security;

•our sales and marketing organization to engage our existing and prospective customers, increase brand awareness and drive adoption of our products;

•product development, including investments in our product development team and the development of new products and new functionality for our platform as well as investments in further optimizing our existing products and infrastructure;

•acquisitions or strategic investments;

•international expansion; and

•general administration, including increased legal and accounting expenses associated with being a public company.

These investments may not result in increased revenue growth in our business. If we are unable to maintain or increase our revenue at a rate sufficient to offset the expected increase in our costs, our business, financial position, and results of operations will be harmed, and we may not be able to achieve or maintain profitability over the long term. Additionally, we may encounter unforeseen operating expenses, difficulties, complications, delays, and other unknown factors that may result in losses in future periods. If our revenue growth does not meet our expectations in future periods, our business, financial position and results of operations may be harmed, and we may not achieve or maintain profitability in the future.

We have a history of operating losses and may not achieve or sustain profitability in the future.

We generated net losses in each year since our inception, including net losses of $20.7 million and $24.5 million for the years ended December 31, 2021 and 2020, respectively. As of June 30, 2022, we had an accumulated deficit of $147.2 million. While we have experienced significant revenue growth in recent periods, we are not certain whether or when we will obtain a high enough volume of sales to sustain or increase our growth or achieve or maintain profitability in the future. We also expect our costs and expenses to increase in future periods, which could negatively affect our future results of operations if our revenue does not increase. In particular, we intend to continue to expend significant funds to further develop our platform, including by introducing new products and functionality, and to expand our inside and field sales teams and customer success team to drive new customer adoption, expand use cases and integrations, and support international expansion. We will also face increased compliance costs associated with growth, the expansion of our customer base, and being a public company. Our efforts to grow our business may be costlier than we expect, or the rate of our growth in revenue may be slower than we expect, and we may not be able to increase our revenue enough to offset our increased operating expenses. We may incur significant losses in the future for a number of reasons, including the other risks described herein, and unforeseen expenses, difficulties, complications or delays, and other unknown events. If we are unable to achieve and sustain profitability, the value of our business and Class A common stock may significantly decrease.

We have a limited operating history, which makes it difficult to forecast our future results of operations.

We were founded in June 2010. As a result of our limited operating history and the introduction of several new products in recent years, our ability to accurately forecast our future results of operations is limited and subject to a number of uncertainties, including our ability to plan for and model future growth. Our historical revenue growth should not be considered indicative of our future performance. Further, in future periods, our revenue growth could slow or our revenue could decline for a number of reasons, including slowing demand for our products, increasing competition, changes to technology, a decrease in the growth of our overall market, or our failure, for any reason, to continue to take advantage of growth opportunities. We have also encountered, and will continue to encounter, risks and uncertainties frequently experienced by growing companies in rapidly changing industries, such as the risks and uncertainties described herein. If our assumptions regarding these risks and uncertainties and our future revenue growth are incorrect or change, or if we do not address these risks successfully, our operating and financial results could differ materially from our expectations, and our business could suffer.

We may require additional capital to support the growth of our business, and this capital might not be available on acceptable terms, if at all.

We have funded our operations since inception primarily through equity and debt financings and sales of our products. We cannot be certain when or if our operations will generate sufficient cash to fully fund our ongoing operations or the growth of our business. We intend to continue to make investments to support our business, which may require us to engage in equity or debt financings to secure additional funds. Additional financing may not be available on terms favorable to us, if at all. If adequate funds are not available on acceptable terms, we may be unable to invest in future growth opportunities, which could harm our business, operating results, and financial condition. If we incur additional debt, the debt holders would have rights senior to holders of common stock to make claims on our assets, and the terms of any debt could restrict our operations, including our ability to pay dividends on our common stock. Because our decision to issue securities in the future will depend on numerous considerations, including factors beyond our control, we cannot predict or estimate the amount, timing, or nature

of any future issuances of debt or equity securities. As a result, our stockholders bear the risk of future issuances of debt or equity securities reducing the value of our common stock and diluting their interests.

Strategic and Operational Risks

Our business depends on our existing customers purchasing additional subscriptions and products from us and renewing their subscriptions. If our customers do not renew or expand their subscriptions with us, our future operating results would be harmed.

Our future success depends in part on our ability to sell additional subscriptions and products to our existing customers, and our customers renewing their subscriptions when the contract term expires. The terms of our subscription agreements are primarily monthly or annual, with some quarterly, semi-annual and multi-year. Our customers have no obligation to renew their subscriptions for our products after the expiration of their subscription period. In order for us to maintain or improve our results of operations, it is important that our customers renew or expand their subscriptions with us. Whether our customers renew or expand their subscriptions with us may be impacted by a number of factors, including business strength or weakness of our customers, customer usage, customer satisfaction with our products and platform capabilities and customer support, our prices, the capabilities and prices of competing products, mergers and acquisitions affecting our customer base, consolidation of affiliates’ multiple paid business accounts into a single paid business account, the effects of global economic conditions, including due to the global economic uncertainty and financial market conditions caused by the COVID-19 pandemic, the war in Ukraine and related sanctions and the general inflationary environment, or reductions in our customers’ spending on IT solutions or their spending levels generally. In addition, the factors impacting our ability to sell additional subscriptions and products to our customers may be exacerbated by the COVID-19 pandemic, the war in Ukraine and related sanctions and the general inflationary environment. These factors may also be exacerbated if, consistent with our growth strategy, our customer base continues to grow to encompass larger enterprises, which may also require more sophisticated and costly sales efforts. If our customers do not purchase additional subscriptions and products from us or our customers fail to renew their subscriptions, our revenue may decline and our business, financial condition and results of operations may be harmed.

If we are unable to attract new customers, our business, financial condition and results of operations will be adversely affected.

To increase our revenue, we must continue to attract new customers. Our success will depend to a substantial extent on the widespread adoption of our platform and products as an alternative to existing solutions. Many enterprises have invested substantial personnel and financial resources to integrate traditional on-premise architectures into their businesses and, therefore, may be reluctant or unwilling to migrate to cloud computing. Further, the adoption of SaaS business software may be slower in industries with heightened data security interests or business practices requiring highly-customizable application software. In addition, as our market matures, our products evolve, and competitors introduce lower cost or differentiated products that are perceived to compete with our platform and products, our ability to sell subscriptions for our products could be impaired. Similarly, our subscription sales could be adversely affected if customers or users within these organizations perceive that features incorporated into competitive products reduce the need for our products or if they prefer to purchase other products that are bundled with solutions offered by other companies that operate in adjacent markets and compete with our products. As a result of these and other factors, we may be unable to attract new customers, which may have an adverse effect on our business, financial condition and results of operations.

Failure to effectively develop and expand our sales and marketing capabilities could harm our ability to increase our customer base and achieve broader market acceptance of our products.

Our ability to increase our customer base and achieve broader market acceptance of our products and platform capabilities will depend to a significant extent on our ability to expand our sales and marketing organization. We plan to continue expanding our direct sales force, both domestically and internationally. We also plan to dedicate significant resources to sales and marketing programs. All of these efforts will require us to invest significant financial and other resources, including in channels in which we have limited or no experience to date. Our business and results of operations will be harmed if our sales and marketing efforts do not generate significant increases in revenue or increases in revenue that are smaller than anticipated. We may not achieve anticipated revenue growth from expanding our sales force if we are unable to hire, develop, integrate and retain talented and effective sales personnel, if our new and existing sales personnel, on the whole, are unable to achieve desired productivity levels in a reasonable period of time, or if our sales and marketing programs are not effective.

If we or our third-party service providers experience, or are unable to protect against cyber attacks, ransomware, security incidents, or security breaches, or if unauthorized parties otherwise obtain access to our customers’ data, our data, or our platform and information technology systems, then our solution may be perceived as not being secure, our reputation may

be harmed, demand for our platform and products may be reduced, and we may incur significant liabilities or additional expenses.

We collect, receive, store, process, generate, use, transfer, disclose, make accessible, protect, secure, dispose of and share personal information, confidential information and other information necessary to provide our service, to operate our business, for legal and marketing purposes, and for other business-related purposes. We may use third-party service providers and sub-processors to help us deliver services to our customers. These vendors may store or process personal information on our behalf.

Our platform and products involve the storage and transmission of data, including personal information, and security breaches or unauthorized access to our platform and products, or those of our third-party service providers, could result in the unauthorized, unlawful, or accidental acquisition, modification, destruction, loss, alteration, encryption, disclosure of, or access to sensitive information including our customers' data. Consequently, we may be subject to significant litigation, indemnity obligations, fines, penalties, disputes, investigations and other liabilities. We have previously and may in the future become the target of cyber-attacks by third parties seeking unauthorized access to our or our customers’ data or to disrupt our ability to provide our services. For example, in July 2016 an unidentified third party gained unauthorized access to, and exfiltrated data from, certain of our infrastructure resources, including a database that stored our customers’ credentials for our platform and for third-party integrations. Some of the customer credentials accessed and exfiltrated included confidential and personal information. As a precautionary measure following this event, we reset customer passwords and instructed customers to revoke credentials that had been shared with us. In addition, many of our employees are working remotely, which may pose additional data security risks (including, for example, an increase in phishing and spam emails we began experiencing during 2020).

While we have taken steps to protect the confidential and personal information that we have access to, our security measures or those of our third-party service providers that store or otherwise process certain of our and our customers’ data on our behalf could be breached or we could suffer a loss of our or our customers’ data. Our ability to monitor our third-party service providers’ data security is limited. Cyber-attacks, computer malware, viruses, employee mistakes or malfeasance, social engineering (including spear phishing and ransomware attacks), and general hacking have become more prevalent in our industry, particularly against cloud services. Ransomware attacks, including those from organized criminal threat actors, nation-states and nation-state supported actors, are becoming increasingly prevalent and can lead to significant interruptions, delays, or outages in our operations, loss of data (including customer data), loss of income, significant extra expenses to restore data or systems, reputational loss and the diversion of funds. To alleviate the financial, operational and reputational impact of a ransomware attack it may be preferable to make extortion payments, but we may be unwilling or unable to do so (including, for example, if applicable laws or regulations prohibit such payments). Similarly, supply chain attacks have increased in frequency and severity, and we cannot guarantee that third parties and infrastructure in our supply chain have not been compromised or that they do not contain exploitable defects or bugs that could result in a breach of or disruption to our platform, systems and networks or the systems and networks of third parties that support us and our services. Despite the security controls we have in place, such attacks are very difficult to avoid. In addition, we do not directly control content that our customers store in our products. If our customers use our products for the transmission or storage of personal information and our security measures are or are believed to have been breached as a result of third-party action, employee error, malfeasance or otherwise, our reputation could be damaged, our business may suffer, and we could incur significant liability. In addition, our remediation efforts may not be successful.

We also process, store and transmit our own data as part of our business and operations. This data may include personal, confidential or proprietary information. We may expend significant resources, fundamentally change our business activities and practices, or modify our operations or information technology in an effort to protect against security incidents and to mitigate, detect, and remediate actual and potential vulnerabilities. There can be no assurance that any security measures that we or our third-party service providers have implemented will be effective against current or future security threats. While we have developed systems and processes designed to protect the integrity, confidentiality, and security of our and our customers’ data, our security measures or those of our third-party service providers could fail and result in unauthorized access to or disclosure, modification, misuse, loss or destruction of such data.

Because many different security vulnerabilities exist and exploits of such vulnerabilities continue to evolve, we may be unable to anticipate attempted security breaches, react in a timely manner or implement adequate preventative measures. Among other things, our applications, systems, networks, software, other computer assets and physical facilities could be breached or could otherwise malfunction or fail, or the personal or confidential information that we store could be otherwise compromised due to employee error or malfeasance, if, for example, third parties fraudulently induce our employees or our members to disclose information or user names and/or passwords, or otherwise compromise the security of our networks, systems and/or physical facilities. Additionally, from time to time employees or service providers may inadvertently

misconfigure resources or misdirect certain communications, leading to security vulnerabilities or incidents that we must then expend effort and incur expenses to correct.

Third parties may also conduct attacks designed to temporarily deny customers access to our cloud services. Any security breach or other security incident, or the perception that one has occurred, could result in a loss of customer confidence in the security of our platform and damage to our brand, reduce the demand for our products, disrupt normal business operations, require us to spend material resources to investigate or correct the breach and to prevent future security breaches and incidents, expose us to legal liabilities, including litigation, regulatory enforcement, and indemnity obligations, and adversely affect our business, financial condition and results of operations. These risks are likely to increase as we continue to grow and process, store, and transmit increasingly large amounts of data.

We use third-party technology, systems and services in a variety of contexts, including, without limitation, encryption and authentication technology, employee email, content delivery to customers, back-office support, credit card processing and other functions. Although we have developed systems and processes that are designed to protect customer data and prevent data loss and other security breaches, including systems and processes designed to reduce the impact of a security breach at a third-party service provider, such measures cannot provide absolute security.

We may have contractual and other legal obligations to notify relevant stakeholders of security incidents. For instance, most jurisdictions have enacted laws, such as the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), requiring companies to notify individuals, regulatory authorities, and others of security breaches involving certain types of data. Such mandatory contractual and legal disclosures are costly, could lead to negative publicity, may cause our customers to lose confidence in the effectiveness of our security measures and require us to expend significant capital and other resources to respond to and/or alleviate problems caused by the actual or perceived security breach, and any failure to provide appropriate notice may violate the terms of our customer contracts. Applicable laws, our contracts, our representations, or industry standards may require us to use industry-standard or reasonable measures to safeguard sensitive personal information or confidential information. A security breach could lead to claims by our customers, or other relevant stakeholders, that we have failed to comply with such legal or contractual obligations. As a result, we could be subject to legal action or our customers could end their relationships with us. Further, there can be no assurance that any limitations of liability in our contracts would be enforceable or adequate or would otherwise protect us from liabilities or damages.

The costs to respond to a security breach and/or mitigate any security vulnerabilities that may be identified could be significant, our efforts to address these problems may not be successful, and these problems could result in unexpected interruptions, delays, cessation of service, negative publicity, and other harm to our business and our competitive position. We could be required to fundamentally change our business activities and practices in response to a security breach or related regulatory actions or litigation, which could have an adverse effect on our business.

Additionally, we cannot be certain that our insurance coverage will be adequate for fines, judgments, settlements, penalties, costs, attorney fees and other impacts that arise out of privacy or security incidents or breaches. If the impacts of a privacy or security incident or breach, or the successful assertion of one or more large claims against us that exceeds our available insurance coverage, or results in changes to our insurance policies (including premium increases or the imposition of large deductible or co-insurance requirements), it could have an adverse effect on our business. In addition, we cannot be sure that our existing insurance coverage, cyber coverage and coverage for errors and omissions will continue to be available on acceptable terms or that our insurers will not deny coverage as to any future claim. The successful assertion of one or more large claims against us that exceed available insurance coverage, or the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could adversely affect our reputation, business, financial condition and results of operations. Our risks are likely to increase as we continue to expand, grow our customer base, and process, store, and transmit increasingly large amounts of proprietary and sensitive data.

Interruptions or performance problems associated with our products and platform capabilities may adversely affect our business, financial condition and results of operations.

Our continued growth depends in part on the ability of our existing and potential customers to access our products and platform capabilities at any time and within an acceptable amount of time. We have experienced, and may in the future experience, disruptions, outages, and other performance problems due to a variety of factors, including infrastructure changes, introductions of new functionality, human or software errors, capacity constraints due to an overwhelming number of users accessing our products and platform capabilities simultaneously, denial of service attacks, or other security-related incidents.

It may become increasingly difficult to maintain and improve our performance, especially during peak usage times and as our products and platform capabilities become more complex and our user traffic increases. If our products and platform capabilities are unavailable or if our users are unable to access our products and platform capabilities within a reasonable

amount of time or at all, we may experience a loss of customers, lost or delayed market acceptance of our platform and products, delays in payment to us by customers, injury to our reputation and brand, legal claims against us, and the diversion of our resources. In addition, to the extent that we do not effectively address capacity constraints, upgrade our systems as needed and continually develop our technology and network architecture to accommodate actual and anticipated changes in technology, our business, financial condition and results of operations may be adversely affected.

We may not be able to successfully manage our growth, and if we are not able to grow efficiently, our business, financial condition and results of operations could be harmed.

As usage of our platform capabilities grow, we will need to devote additional resources to improving and maintaining our infrastructure and integrating with third-party applications. In addition, we will need to appropriately scale our internal business systems and our services organization, including customer support and professional services, to serve our growing customer base. Any failure of or delay in these efforts could result in impaired system performance and reduced customer satisfaction, resulting in decreased sales to new customers, lower dollar-based net retention rates or, the issuance of service credits or requested refunds, which would hurt our revenue growth and our reputation. Further, any failure in optimizing our spend on third-party cloud services as we scale could negatively impact our gross margins. Even if we are successful in our expansion efforts, they will be expensive and complex, and require the dedication of significant management time and attention. We could also face inefficiencies or service disruptions as a result of our efforts to scale our internal infrastructure. We cannot be sure that the expansion of and improvements to our internal infrastructure will be effectively implemented on a timely basis, if at all, and such failures could harm our business, financial condition and results of operations.

We rely upon third-party providers of cloud-based infrastructure to host our products. Any disruption in the operations of these third-party providers, limitations on capacity or interference with our use could adversely affect our business, financial condition and results of operations.

We outsource substantially all of the infrastructure relating to our cloud solution to third-party hosting services. Customers of our cloud-based products need to be able to access our platform at any time, without interruption or degradation of performance, and we provide them with service-level commitments with respect to uptime. Our cloud-based products depend on protecting the virtual cloud infrastructure hosted by third-party hosting services by maintaining its configuration, architecture, features and interconnection specifications, as well as the information stored in these virtual data centers, which is transmitted by third-party internet service providers. Any limitation on the capacity of our third-party hosting services could impede our ability to onboard new customers or expand the usage of our existing customers, which could adversely affect our business, financial condition and results of operations. In addition, any incident affecting our third-party hosting services’ infrastructure that may be caused by cyber-attacks, natural disasters, fire, flood, severe storm, earthquake, power loss, telecommunications failures, outbreaks of contagious diseases, terrorist or other attacks, and other similar events beyond our control could negatively affect our cloud-based products. A prolonged service disruption affecting our cloud-based solution for any of the foregoing reasons would negatively impact our ability to serve our customers and could damage our reputation with current and potential customers, expose us to liability, cause us to lose customers or otherwise harm our business. We may also incur significant costs for using alternative equipment or taking other actions in preparation for, or in reaction to, events that damage the third-party hosting services we use.

In the event that our service agreements with our third-party hosting services are terminated, or there is a lapse of service, elimination of services or features that we utilize, interruption of internet service provider connectivity or damage to such facilities, we could experience interruptions in access to our platform as well as significant delays and additional expense in arranging or creating new facilities and services and/or re-architecting our cloud solution for deployment on a different cloud infrastructure service provider, which could adversely affect our business, financial condition and results of operations.

We offer free trials and a free tier of our platform to drive developer awareness of our products, and encourage usage and adoption. If these marketing strategies fail to lead to customers purchasing paid subscriptions, our ability to grow our revenue will be adversely affected.

To encourage awareness, usage, familiarity and adoption of our platform and products, we offer free trials and a free tier of our platform. These strategies may not be successful in leading customers to purchase our products. Many users of our free tier may not lead to others within their organization purchasing and deploying our platform and products. To the extent that users do not become, or we are unable to successfully attract paying customers, we will not realize the intended benefits of these marketing strategies and our ability to grow our revenue will be adversely affected.

We expect fluctuations in our financial results, making it difficult to project future results, and if we fail to meet the expectations of securities analysts or investors with respect to our results of operations, our stock price could decline.

Our results of operations have fluctuated in the past and are expected to fluctuate in the future due to a variety of factors, many of which are outside of our control. As a result, our past results may not be indicative of our future performance. In addition to the other risks described herein, factors that may affect our results of operations include the following:

•fluctuations in demand for or pricing of our platform and products;

•fluctuations in usage of our platform and products;

•our ability to attract new customers;

•our ability to retain our existing customers;

•customer expansion rates and the pricing and quantity of subscriptions renewed;

•the pricing of subscriptions from customers in our cloud-provider marketplaces;

•timing and amount of our investments to expand the capacity of our third-party cloud infrastructure providers;

•seasonality driven by industry conferences;

•the investment in new products and features relative to investments in our existing infrastructure and products;

•the timing of our customer purchases;

•fluctuations or delays in purchasing decisions in anticipation of new products or enhancements by us or our competitors;

•changes in customers’ budgets and in the timing of their budget cycles and purchasing decisions;

•our ability to control costs, including our operating expenses;

•the amount and timing of payment for operating expenses, particularly research and development and sales and marketing expenses, including commissions;

•the amount and timing of non-cash expenses, including stock-based compensation, goodwill impairments and other non-cash charges;

•the amount and timing of costs associated with recruiting, training and integrating new employees and retaining and motivating existing employees;

•the effects of acquisitions and their integration;

•general economic conditions, both domestically and internationally, as well as economic conditions specifically affecting industries in which our customers participate, including those impacted by the COVID-19 pandemic and war in Ukraine;

•the effect of other economic factors, including inflation, pricing and currency fluctuations;

•the impact of new accounting pronouncements;

•changes in regulatory or legal environments that may cause us to incur, among other elements, expenses associated with compliance;

•changes in the competitive dynamics of our market, including consolidation among competitors or customers; and

•significant security breaches of, technical difficulties with, or interruptions to, the delivery and use of our products and platform capabilities.

The global economy, including credit and financial markets, has experienced extreme volatility and disruptions, including severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates, increases in inflation rates, higher interest rates and uncertainty about economic stability. For example, the COVID-19 pandemic resulted in widespread unemployment, economic slowdown and extreme volatility in the capital markets. The ongoing military conflict between Russia and Ukraine has also created extreme volatility in the global capital markets and is expected to have further global economic consequences. Any such volatility and disruptions may have adverse consequences on us or the third parties on whom we rely. If the equity and credit markets deteriorate, or do not improve, including as a result of political unrest or war, it may make any necessary debt or equity financing more difficult to obtain in a timely manner or on favorable terms, more costly or more dilutive. Increased inflation rates can adversely affect us by increasing our costs, including personnel costs.

Any of these and other factors, or the cumulative effect of some of these factors, may cause our results of operations to vary significantly. For example, the full impact of the COVID-19 pandemic is unknown at this time, but could result in adverse changes in our results of operations for an unknown period of time as the virus and its related social and economic impacts spread. If our quarterly results of operations fall below the expectations of investors and securities analysts who follow our stock, the price of our Class A common stock could decline substantially, and we could face costly lawsuits, including securities class action suits.

Seasonality may cause fluctuations in our sales and results of operations.

Historically, we have experienced seasonality in new customer bookings, as we typically we enter into a higher percentage of subscription agreements with new customers and renewals with existing customers in the fourth quarter of the year. We believe that this results from the procurement, budgeting, and deployment cycles of many of our customers, particularly our enterprise customers. We expect that this seasonality will continue to affect our bookings and our results of operations in the future, and might become more pronounced as we continue to target larger enterprise customers.

Downturns or upturns in our sales may not be immediately reflected in our financial position and results of operations.

Because we recognize a large portion of our revenue ratably over the term of the subscription agreement, any decreases in new subscriptions or renewals in any one period may not be immediately reflected as a decrease in revenue for that period, but could negatively affect our revenue in future quarters. This also makes it difficult for us to rapidly increase our revenue through the sale of additional subscriptions in any period, as revenue is recognized over the term of the subscription agreement. In addition, fluctuations in monthly subscriptions based on usage could affect our revenue on a period-over-period basis. If our quarterly results of operations fall below the expectations of investors and securities analysts who follow our stock, the price of our Class A common stock would decline substantially, and we could face costly lawsuits, including securities class actions.

We target enterprise customers, and sales to these customers involve risks that may not be present or that are present to a lesser extent with sales to smaller entities.

We have a field sales team that targets enterprise customers. Sales to large customers involve risks that may not be present or that are present to a lesser extent with sales to smaller entities, such as longer sales cycles, more complex customer requirements, substantial upfront sales costs, and less predictability in completing some of our sales. For example, enterprise customers may require considerable time to evaluate and test our solutions and those of our competitors prior to making a purchase decision and placing an order. A number of factors influence the length and variability of our sales cycle, including the need to educate potential customers about the uses and benefits of our solutions, the discretionary nature of purchasing and budget cycles, and the competitive nature of evaluation and purchasing approval processes. As a result, the length of our sales cycle, from identification of the opportunity to deal closure, may vary significantly from customer to customer, with sales to large enterprises typically taking longer to complete. Moreover, large enterprise customers often begin to deploy our products on a limited basis, but nevertheless demand configuration, integration services and pricing negotiations, which increase our upfront investment in the sales effort with no guarantee that these customers will deploy our products widely enough across their organization to justify our substantial upfront investment.

If we fail to retain and motivate members of our management team or other key employees, or fail to attract additional qualified personnel to support our operations, our business and future growth prospects would be harmed.

Our success and future growth depend largely upon the continued services of our executive officers, particularly Olivier Pomel, our co-founder and Chief Executive Officer, Alexis Lê-Quôc, our co-founder, President and Chief Technology Officer, and David Obstler, our Chief Financial Officer, as well as our other key employees in the areas of research and development and sales and marketing functions. From time to time, there may be changes in our executive management team or other key employees resulting from the hiring or departure of these personnel. Our executive officers and other key employees are employed on an at-will basis, which means that these personnel could terminate their employment with us at any time. The loss of one or more of our executive officers, or the failure by our executive team to effectively work with our employees and lead our company, could harm our business. We also are dependent on the continued service of our existing software engineers because of the complexity of our products and platform capabilities.

In addition, to execute our growth plan, we must attract and retain highly qualified personnel. Competition for these personnel is intense, especially for engineers experienced in designing and developing SaaS applications and experienced sales professionals. If we are unable to attract such personnel in cities where we are located, we may need to hire in other locations which may add to the complexity and costs of our business operations. We have experienced, and we expect to continue to experience, difficulty in hiring and retaining employees with appropriate qualifications. Many of the companies with which we

compete for experienced personnel have greater resources than we have. If we hire employees from competitors or other companies, their former employers may attempt to assert that these employees or we have breached their legal obligations, resulting in a diversion of our time and resources. In addition, prospective and existing employees often consider the value of the equity awards they receive in connection with their employment. If the perceived value of our equity awards declines, experiences significant volatility, or increases such that prospective employees believe there is limited upside to the value of our equity awards, it may adversely affect our ability to recruit and retain key employees. If we fail to attract new personnel or fail to retain and motivate our current personnel, our business and future growth prospects would be harmed.

If we fail to maintain and enhance our brand, our ability to expand our customer base will be impaired and our business, financial condition and results of operations may suffer.

We believe that maintaining and enhancing the Datadog brand is important to support the marketing and sale of our existing and future products to new customers and expand sales of our platform and products to existing customers. We also believe that the importance of brand recognition will increase as competition in our market increases. Successfully maintaining and enhancing our brand will depend largely on the effectiveness of our marketing efforts, our ability to provide reliable products that continue to meet the needs of our customers at competitive prices, our ability to maintain our customers’ trust, our ability to continue to develop new functionality and use cases, and our ability to successfully differentiate our products and platform capabilities from competitive products. Our brand promotion activities may not generate customer awareness or yield increased revenue, and even if they do, any increased revenue may not offset the expenses we incur in building our brand. If we fail to successfully promote and maintain our brand, our business, financial condition and results of operations may suffer.

If we cannot maintain our company culture as we grow, our success and our business and competitive position may be harmed.

We believe our culture has been a key contributor to our success to date and that the critical nature of the platform that we provide promotes a sense of greater purpose and fulfillment in our employees. Any failure to preserve our culture could negatively affect our ability to retain and recruit personnel, which is critical to our growth, and to effectively focus on and pursue our corporate objectives. As we continue to grow and expand globally, we may find it difficult to maintain these important aspects of our culture particularly given the COVID-19 pandemic and remote work arrangements. If we fail to maintain our company culture, our business and competitive position may be harmed.

If we fail to offer high-quality support, our reputation could suffer.

Our customers rely on our customer support personnel to resolve issues and realize the full benefits that our platform provides. High-quality support is also important for the renewal and expansion of our subscriptions with existing customers. The importance of our support function will increase as we expand our business and pursue new customers. If we do not help our customers quickly resolve issues and provide effective ongoing support, our ability to maintain and expand our subscriptions to existing and new customers could suffer, and our reputation with existing or potential customers could suffer.

Acquisitions, strategic investments, partnerships, or alliances could be difficult to identify, pose integration challenges, divert the attention of management, disrupt our business, dilute stockholder value, and adversely affect our business, financial condition and results of operations.

We have in the past and may in the future seek to acquire or invest in businesses, joint ventures, products and platform capabilities, or technologies that we believe could complement or expand our services and platform capabilities, enhance our technical capabilities, or otherwise offer growth opportunities. Any such acquisition or investment may divert the attention of management and cause us to incur various expenses in identifying, investigating and pursuing suitable opportunities, whether or not the transactions are completed, and may result in unforeseen operating difficulties and expenditures. In particular, we may encounter difficulties assimilating or integrating the businesses, technologies, products and platform capabilities, personnel internal controls or operations of any acquired companies, particularly if the key personnel of an acquired company choose not to work for us, their software is not easily adapted to work with our platform, or we have difficulty retaining the customers of any acquired business due to changes in ownership, management or otherwise. These transactions may also disrupt our business, divert our resources, and require significant management attention that would otherwise be available for development of our existing business. Any such transactions that we are able to complete may not result in any synergies or other benefits we had expected to achieve, which could result in impairment charges that could be substantial. In addition, we may not be able to find and identify desirable acquisition targets or business opportunities or be successful in entering into an agreement with any particular strategic partner. These transactions could also result in dilutive issuances of equity securities or the incurrence of debt, which could adversely affect our results of operations. In addition, if the resulting business from such a transaction fails to

meet our expectations, our business, financial condition and results of operations may be adversely affected or we may be exposed to unknown risks or liabilities.

Macroeconomic and Industry Risks

If we fail to adapt and respond effectively to rapidly changing technology, evolving industry standards, changing regulations, or to changing customer needs, requirements or preferences, our platform and products may become less competitive.

Our ability to attract new users and customers and increase revenue from existing customers depends in large part on our ability to enhance and improve our existing products, increase adoption and usage of our products, and introduce new products and capabilities. The market in which we compete is relatively new and subject to rapid technological change, evolving industry standards, and changing regulations, as well as changing customer needs, requirements and preferences. The success of our business will depend, in part, on our ability to adapt and respond effectively to these changes on a timely basis. If we were unable to enhance our products and platform capabilities that keep pace with rapid technological and regulatory change, or if new technologies emerge that are able to deliver competitive products at lower prices, more efficiently, more conveniently, or more securely than our products, our business, financial condition and results of operations could be adversely affected.

The success of our platform depends, in part, on its ability to be deployed in a self-service installation process. We currently offer more than 500 out-of-the-box integrations to assist customers in deploying Datadog, and we need to continuously modify and enhance our products to adapt to changes and innovation in existing and new technologies to maintain and grow our integrations. We expect that the number of integrations we will need to support will continue to expand as developers adopt new software platforms, and we will have to develop new versions of our products to work with those new platforms. This development effort may require significant engineering, sales and marketing resources, all of which would adversely affect our business. Any failure of our products to operate effectively with future infrastructure platforms and technologies could reduce the demand for our products. If we are unable to respond to these changes in a cost-effective manner, our products may become less marketable and less competitive or obsolete, and our business, financial condition and results of operations could be adversely affected.

The markets in which we participate are competitive, and if we do not compete effectively, our business, financial condition and results of operations could be harmed.

Our unified platform combines functionality from numerous traditional product categories, and hence we compete in each of these categories with home-grown and open-source technologies, as well as a number of different vendors. With respect to on-premise infrastructure monitoring, we compete with diversified technology companies and systems management vendors including IBM, Microsoft Corporation, and SolarWinds Corporation. With respect to APM, we compete with companies including Cisco Systems, Inc., New Relic, Inc. and Dynatrace Software Inc. With respect to log management, we compete with companies including Splunk Inc. and Elastic N.V. With respect to cloud monitoring, we compete with native solutions from cloud providers such as AWS, GCP and Microsoft Azure. In addition, we may increasingly choose to allow these third-party hosting providers to offer our solutions directly through their customer marketplaces. An increasing number of sales through cloud provider marketplaces could reduce both the number of customers with whom we have direct commercial relationships as well as our profit margins on sales made through such marketplaces.

With the introduction of new technologies and market entrants, we expect that the competitive environment will remain intense going forward. Some of our actual and potential competitors have been acquired by other larger enterprises and have made or may make acquisitions or may enter into partnerships or other strategic relationships that may provide more comprehensive offerings than they individually had offered or achieve greater economies of scale than us. In addition, new entrants not currently considered to be competitors may enter the market through acquisitions, partnerships or strategic relationships. As we look to market and sell our products and platform capabilities to potential customers with existing internal solutions, we must convince their internal stakeholders that our products and platform capabilities are superior to their current solutions.

We compete on the basis of a number of factors, including:

•ability to provide unified, real-time observability of IT environments;

•ability to operate in dynamic and elastic environments;

•extensibility across the enterprise, including development, operations and business users;

•propensity to enable collaboration between development, operations and business users;

•ability to monitor any combination of public clouds, private clouds, on-premise and multi-cloud hybrids;

•ability to provide advanced analytics and machine learning;

•ease of deployment, implementation and use;

•breadth of offering and key technology integrations;

•performance, security, scalability and reliability;

•quality of service and customer satisfaction;

•total cost of ownership; and

•brand recognition and reputation.

Our competitors vary in size and in the breadth and scope of the products offered. Many of our competitors and potential competitors have greater name recognition, longer operating histories, more established customer relationships and installed customer bases, larger marketing budgets and greater resources than we do. Further, other potential competitors not currently offering competitive solutions may expand their product or service offerings to compete with our products and platform capabilities, or our current and potential competitors may establish cooperative relationships among themselves or with third parties that may further enhance their resources and product offerings in our addressable market. Our competitors may be able to respond more quickly and effectively than we can to new or changing opportunities, technologies, standards, and customer requirements. An existing competitor or new entrant could introduce new technology that reduces demand for our products and platform capabilities. In addition to product and technology competition, we face pricing competition. Some of our competitors offer their solutions at a lower price, which has resulted in, and may continue to result in, pricing pressures.

For all of these reasons, we may not be able to compete successfully against our current or future competitors, and this competition could result in the failure of our platform to continue to achieve or maintain market acceptance, any of which would harm our business, results of operations, and financial condition.

The market for our solutions may develop more slowly or differently than we expect.

It is difficult to predict customer adoption rates and demand for our products, the entry of competitive products or the future growth rate and size of the cloud-based software and SaaS business software markets. The expansion of these markets depends on a number of factors, including: the cost, performance, and perceived value associated with cloud-based and SaaS business software as an alternative to legacy systems, as well as the ability of cloud-based software and SaaS providers to address heightened data security and privacy concerns. If we have a security incident or other cloud-based software and SaaS providers experience security incidents, loss of customer data, disruptions in delivery or other similar problems, which is an increasing focus of the public and investors in recent years, the market for these applications as a whole, including our platform and products, may be negatively affected. If cloud-based and SaaS business software does not continue to achieve market acceptance, or there is a reduction in demand caused by a lack of customer acceptance, technological challenges, weakening economic conditions, data security or privacy concerns, governmental regulation, competing technologies and products, or decreases in information technology spending or otherwise, the market for our platform and products might not continue to develop or might develop more slowly than we expect, which would adversely affect our business, financial condition and results of operations.

Legal and Regulatory Risks

We typically provide service-level commitments under our subscription agreements. If we fail to meet these contractual commitments, we could be obligated to provide credits for future service or face subscription termination with refunds of prepaid amounts, which would lower our revenue and harm our business, financial condition and results of operations.

Our subscription agreements typically contain service-level commitments. If we are unable to meet the stated service-level commitments, including failure to meet the uptime and response time requirements under our customer subscription agreements, we may be contractually obligated to provide these customers with service credits which could significantly affect our revenue in the periods in which the failure occurs and the credits are applied. We could also face subscription terminations and a reduction in renewals, which could significantly affect both our current and future revenue. Any service-level failures could also damage our reputation, which could also adversely affect our business, financial condition and results of operations.

Indemnity provisions in various agreements to which we are party potentially expose us to substantial liability for infringement, misappropriation or other violation of intellectual property rights, data protection and other losses.

Our agreements with our customers and other third parties may include indemnification provisions under which we agree to indemnify or otherwise be liable to them for losses suffered or incurred as a result of claims of infringement, misappropriation or other violation of intellectual property rights, data protection, damages caused by us to property or persons, or other liabilities relating to or arising from our software, services, platform, our acts or omissions under such agreements or other contractual obligations. Some of these indemnity agreements provide for uncapped liability and some indemnity provisions survive termination or expiration of the applicable agreement. Large indemnity payments could harm our business, financial condition and results of operations. Although we attempt to contractually limit our liability with respect to such indemnity obligations, we are not always successful and may still incur substantial liability related to them, and we may be required to cease use of certain functions of our platform or products as a result of any such claims. Any dispute with a customer or other third party with respect to such obligations could have adverse effects on our relationship with such customer or other third party and other existing or prospective customers, reduce demand for our products and services and adversely affect our business, financial conditions and results of operations. In addition, although we carry general liability insurance, our insurance may not be adequate to indemnify us for all liability that may be imposed or otherwise protect us from liabilities or damages with respect to claims alleging compromises of customer data, and any such coverage may not continue to be available to us on acceptable terms or at all.

We and our third-party service providers are subject to stringent and changing laws, regulations and standards, and contractual obligations related to data privacy and security. Actual or perceived failure by us or our third-party service providers to comply with such laws, regulations, standards, or contractual obligations could harm our business.

We have legal, contractual and other applicable obligations regarding the protection of confidentiality and appropriate use of personal information, confidential information, and other proprietary information that we, our third-party service providers or other partners process. We are subject to a variety of federal, state, local and international laws, directives and regulations, and industry standards, relating to the collection, use, retention, security, disclosure, transfer and other processing of personal information. The regulatory framework for privacy and security issues worldwide is rapidly evolving and as a result implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future.

Internationally, nearly every jurisdiction in which we operate has established its own data security and privacy legal framework with which we, our third-party service providers, or our customers must comply. The data protection landscape is currently unstable, resulting in possible significant operational costs for internal compliance and risk to our business. For example, the European Union's General Data Protection Regulation, or EU GDPR, contains numerous requirements and changes from previously existing law, including more robust obligations on data processors and heavier documentation requirements for data protection compliance programs by companies.

In addition, certain jurisdictions have enacted data localization laws and cross-border personal data transfer laws. For example, absent appropriate safeguards or other circumstances, the EU GDPR generally prohibits the transfer of personal information outside the European Economic Area, or the EEA. In June 2021, the European Commission released a set of Standard Contractual Clauses, or “SCCs,” that can lawfully be used for personal information transfers from Europe to the United States or most other countries. The SCCs require parties that rely upon that legal mechanism to comply with additional obligations, such as conducting transfer impact assessments and implementing additional security and privacy measures, which increases the difficulty of selling to European customers and may lead to longer sales cycles. While we have taken steps to mitigate the impact on us with respect to transfers of data, such as implementing SCCs, the efficacy and longevity of these transfer mechanisms remains uncertain. Moreover, due to potential legal challenges, there exists some uncertainty as to whether the SCCs will remain a valid transfer mechanism of personal data out of the EEA. In addition, laws in Switzerland and the United Kingdom similarly restrict transfers of personal data outside of those jurisdictions to countries such as the United States that do not provide an adequate level of personal data protection.

Additionally, other countries outside of Europe have enacted or are considering enacting similar cross-border data transfer restrictions and laws requiring local data residency, and strict limitations to the processing of personal information, which could increase the cost and complexity of delivering our services and operating our business. Recently, for example, Brazil enacted the General Data Protection Law, New Zealand enacted the New Zealand Privacy Act, China enacted its Personal Information Protection Law, and Canada introduced the Digital Charter Implementation Act.

If we are unable to implement a valid compliance mechanism for cross-border personal information transfers, we may face increased exposure to regulatory actions, substantial fines and injunctions against processing or transferring personal information from Europe or elsewhere. Inability to import personal information from other jurisdictions to the United States may significantly and negatively impact our business operations, including by lowering sales on our platform due to the difficultly of establishing a lawful basis for personal information transfers out of Europe or other jurisdictions, or requiring us to increase our data processing capabilities in Europe or elsewhere at significant expense.

Additionally, European legislative proposals and present laws and regulations apply to cookies and similar tracking technologies, electronic communications, and marketing. In the EU and the United Kingdom, regulators are increasingly focusing on compliance with requirements related to the online behavioral advertising ecosystem. It is anticipated that the ePrivacy Regulation will replace the current national laws that implement the ePrivacy Directive that governs electronic communications. Outside of Europe, other laws are further regulating targeted advertising, making certain online advertising activities more difficult and subject to additional scrutiny.

Complying with these and other applicable laws may cause us to incur substantial operational costs or require us to change our business practices. Despite our efforts to bring practices into compliance with all applicable laws, we may not be successful in our efforts to achieve compliance either due to internal or external factors such as resource allocation limitations or a lack of vendor cooperation. Non-compliance could result in proceedings against us by governmental entities, customers, data subjects or others. We may also experience difficulty retaining or obtaining new European or multi-national customers due to the legal requirements, compliance cost, potential risk exposure, and uncertainty for these entities, and we may experience significantly increased liability with respect to these customers pursuant to the terms set forth in our engagements with them. While we utilize a data center in the EEA to maintain certain customer data (which may include personal data) originating from the EEA, we may find it necessary to establish additional systems and processes to maintain such data in the EEA, which may involve substantial expense and distraction from other aspects of our business.

Domestic laws in this area are also complex and developing rapidly, and we are, or may become, subject to numerous U.S. data privacy and security laws. In the United States, laws governing data privacy and security include those promulgated under the authority of the Federal Trade Commission Act, the Electronic Communications Privacy Act, the Computer Fraud and Abuse Act, the California Consumer Privacy Act, or CCPA, and other state and federal laws relating to privacy and data security. Many state legislatures have adopted legislation that regulates how businesses operate online, including measures relating to privacy, data security and data breaches. Laws in all 50 states require businesses to provide notice to customers whose personal information has been disclosed as a result of a data breach. The laws are not consistent, and compliance in the event of a widespread data breach is costly. States are also constantly amending existing laws, requiring attention to frequently changing legal requirements.

The CCPA, which became effective on January 1, 2020, gives California residents expanded rights to access and delete their personal information, opt out of the sale of personal information, and receive detailed information about how their personal information is used. The CCPA provides a private right of action and statutory damages for data breaches and may increase our compliance costs and potential liability with respect to other personal information we collect about California residents. In addition, the California Privacy Rights Act, or the CPRA, which amends the CCPA, was approved by California voters on November 3, 2020 and is scheduled to go into effect on January 1, 2023. The CPRA would, among other things, amend the CCPA to give California residents the ability to limit the use of their sensitive information, provide additional penalties for CPRA violations concerning California residents under the age of 16, and establish a new California Privacy Protection Agency to implement and enforce the law. Both the CCPA and CPRA could impact our business activities depending on how they are interpreted. These laws exemplify the vulnerability of our business not only to security incidents but also to the evolving regulatory environment related to personal information and protected health information. Some observers have noted that the CCPA and CPRA could mark the beginning of a trend toward more stringent privacy legislation in the United States, which could increase our potential liability and adversely affect our business, the results of our operations, and our financial condition. For example, each of Colorado, Utah and Virginia have recently passed similar consumer privacy legislation, all of which differ from the CPRA and become effective in 2023.

Because the interpretation and application of many privacy and data protection laws and regulations, along with contractually imposed industry standards are uncertain, it is possible that they may be interpreted and applied in a manner that is inconsistent with our existing data management practices or the features of our products and platform capabilities. If so, in addition to the possibility of fines, lawsuits, regulatory investigations and imprisonment of company officials, other claims and penalties, significant costs for remediation and damage to our reputation, we could be required to fundamentally change our business activities and practices or modify our products and platform capabilities, any of which could have an adverse effect on our business. Any inability to adequately address privacy and security concerns, even if unfounded, or comply with applicable privacy and data security laws, regulations, or contractual obligations, could result in additional cost and liability to us, damage our reputation, inhibit sales, and adversely affect our business. Furthermore, the costs of compliance with, and other burdens imposed by, the laws, regulations, and contractual obligations that are applicable to the businesses of our customers may limit the use and adoption of, and reduce the overall demand for, our products. Privacy and data security concerns, whether valid or not valid, may inhibit market adoption of our products, particularly in certain industries and foreign countries. If we are not able to adjust to these changing laws, regulations, and contractual obligations, our business may be harmed.

We publicly post our policies and other documentation regarding our practices concerning the collection, processing, use, transfer, and disclosure of data. Although we endeavor to comply with our published policies and documentation, we may

at times fail to do so or be alleged to have failed to do so. The publication of our policies and other documentation that provide promises and assurances about privacy and security can subject us to potential state and federal action if they are found to be deceptive, unfair, or misrepresentative of our actual practices. Any failure by us, our third-party service providers or other parties with whom we do business to comply with our policies or other documentation could result in proceedings against us by governmental entities, private parties or others. We are or may also be subject to the terms of our external and internal privacy and security policies, codes, representations, certifications, industry standards, publications and frameworks and contractual obligations to third parties related to privacy, information security, including contractual obligations to indemnify and hold harmless third parties from the costs or consequences of non-compliance with data protection laws or other obligations.

We are subject to anti-corruption, anti-bribery, anti-money laundering, and similar laws, and non-compliance with such laws can subject us to criminal or civil liability and harm our business, financial condition and results of operations.

We are subject to the U.S. Foreign Corrupt Practices Act, or FCPA, U.S. domestic bribery laws, the UK Bribery Act, and other anti-corruption and anti-money laundering laws in the countries in which we conduct activities. Anti-corruption and anti-bribery laws have been enforced aggressively in recent years and are interpreted broadly to generally prohibit companies, their employees and their third-party intermediaries from authorizing, offering, or providing, directly or indirectly, improper payments or benefits to recipients in the public or private sector. As we increase our international sales and business and sales to the public sector, we may engage with business partners and third-party intermediaries to market our products and to obtain necessary permits, licenses, and other regulatory approvals. In addition, we or our third-party intermediaries may have direct or indirect interactions with officials and employees of government agencies or state-owned or affiliated entities. We can be held liable for the corrupt or other illegal activities of these third-party intermediaries, our employees, representatives, contractors, partners and agents, even if we do not explicitly authorize such activities.

While we have policies and procedures to address compliance with such laws, we cannot assure you that all of our employees and agents will not take actions in violation of our policies and applicable law, for which we may be ultimately held responsible. As we increase our international sales and business, our risks under these laws may increase.

Detecting, investigating, and resolving actual or alleged violations of anti-corruption laws can require a significant diversion of time, resources, and attention from senior management. In addition, noncompliance with anti-corruption, anti-bribery, or anti-money laundering laws could subject us to whistleblower complaints, investigations, sanctions, settlements, prosecution, enforcement actions, fines, damages, other civil or criminal penalties or injunctions, suspension or debarment from contracting with certain persons, reputational harm, adverse media coverage, and other collateral consequences. If any subpoenas or investigations are launched, or governmental or other sanctions are imposed, or if we do not prevail in any possible civil or criminal proceeding, our business, financial condition and results of operations could be harmed. In addition, responding to any action will likely result in a materially significant diversion of management’s attention and resources and significant defense costs and other professional fees.

Sales to government entities and highly regulated organizations are subject to a number of challenges and risks.

We may sell to U.S. federal, state, and local, as well as foreign, governmental agency customers, as well as to customers in highly regulated industries such as financial services, telecommunications and healthcare. Sales to such entities are subject to a number of challenges and risks. Selling to such entities can be highly competitive, expensive, and time-consuming, often requiring significant upfront time and expense without any assurance that these efforts will generate a sale. Government contracting requirements may change and in doing so restrict our ability to sell into the government sector until we have attained the revised certification. Government demand and payment for our products are affected by public sector budgetary cycles and funding authorizations, with funding reductions or delays adversely affecting public sector demand for our products.

Further, governmental and highly regulated entities may demand contract terms that differ from our standard arrangements and are less favorable than terms agreed with private sector customers. Such entities may have statutory, contractual, or other legal rights to terminate contracts with us or our partners for convenience or for other reasons. Any such termination may adversely affect our ability to contract with other government customers as well as our reputation, business, financial condition and results of operations.

We are subject to governmental export and import controls that could impair our ability to compete in international markets or subject us to liability if we violate the controls.

Our platform and products are subject to U.S. export controls, including the Export Administration Regulations, and we incorporate encryption technology into certain of our products. These encryption products and the underlying technology may be exported outside of the United States only with the required export authorizations, including by license, a license exception,

or other appropriate government authorizations, including the filing of an encryption classification request or self-classification report.

Furthermore, our activities are subject to U.S. economic sanctions laws and regulations administered by the Office of Foreign Assets Control that prohibit the shipment of most products and services to embargoed jurisdictions or sanctioned parties without the required export authorizations. Obtaining the necessary export license or other authorization for a particular sale may be time-consuming and may result in the delay or loss of sales opportunities. Violations of U.S. sanctions or export control regulations can result in significant fines or penalties and possible incarceration for responsible employees and managers.

If our channel partners fail to obtain appropriate import, export, or re-export licenses or permits, we may also be adversely affected through reputational harm, as well as other negative consequences, including government investigations and penalties.

Also, various countries, in addition to the United States, regulate the import and export of certain encryption and other technology, including import and export licensing requirements, and have enacted laws that could limit our ability to distribute our products or could limit our end-customers’ ability to implement our products in those countries. Changes in our products or future changes in export and import regulations may create delays in the introduction of our platform in international markets, prevent our end-customers with international operations from deploying our platform globally or, in some cases, prevent the export or import of our products to certain countries, governments, or persons altogether. From time to time, various governmental agencies have proposed additional regulation of encryption technology. Any change in export or import regulations, economic sanctions or related legislation, increased export and import controls, or change in the countries, governments, persons, or technologies targeted by such regulations, could result in decreased use of our platform by, or in our decreased ability to export or sell our products to, existing or potential end-customers with international operations. Any decreased use of our platform or limitation on our ability to export or sell our products would adversely affect our business, results of operations, and growth prospects.

Any future litigation against us could be costly and time-consuming to defend.

We are and in the future may become subject to legal proceedings and claims that arise in the ordinary course of business, such as claims brought by our customers in connection with commercial disputes or employment claims made by our current or former employees. Litigation might result in substantial costs and may divert management’s attention and resources, which might seriously harm our business, financial condition and results of operations. Insurance might not cover such claims, might not provide sufficient payments to cover all the costs to resolve one or more such claims, and might not continue to be available on terms acceptable to us. A claim brought against us that is uninsured or underinsured could result in unanticipated costs, potentially harming our business, financial position and results of operations.

We could be required to collect additional sales taxes or be subject to other tax liabilities that may increase the costs our clients would have to pay for our products and adversely affect our results of operations.

An increasing number of states have considered or adopted laws that attempt to impose tax collection obligations on out-of-state companies. Additionally, the Supreme Court of the United States ruled in South Dakota v. Wayfair, Inc. et al, or Wayfair, that online sellers can be required to collect sales and use tax despite not having a physical presence in the buyer’s state. In response to Wayfair, or otherwise, states or local governments may adopt, or begin to enforce, laws requiring us to calculate, collect, and remit taxes on sales in their jurisdictions. A successful assertion by one or more states requiring us to collect taxes where we presently do not do so, or to collect more taxes in a jurisdiction in which we currently do collect some taxes, could result in substantial tax liabilities, including taxes on past sales, as well as penalties and interest. The imposition by state governments or local governments of sales tax collection obligations on out-of-state sellers could also create additional administrative burdens for us, put us at a competitive disadvantage if they do not impose similar obligations on our competitors, and decrease our future sales, which could have a material adverse effect on our business and results of operations.

Our ability to use our net operating losses to offset future taxable income may be subject to certain limitations.

As of December 31, 2021, we had NOL carryforwards for federal and state income tax purposes of approximately $505.4 million and $342.1 million, respectively, which may be available to offset taxable income in the future, and which expire in various years beginning in 2031 for federal purposes and 2028 for state purposes if not utilized. Unused U.S. federal NOLs for taxable years beginning before January 1, 2018, may be carried forward to offset future taxable income, if any, until such unused NOLs expire. Under current law, U.S. federal NOLs incurred in taxable years after December 31, 2017, can be carried forward indefinitely, but the deductibility of such U.S. federal NOLs incurred in taxable years beginning after December 31,

2020, is limited to 80% of taxable income. It is uncertain if and to what extent various states will conform to federal tax laws. A lack of future taxable income would adversely affect our ability to utilize portions of these NOLs before they expire. In general, under Section 382 of the Internal Revenue Code of 1986, as amended, or the Code, a corporation that undergoes an “ownership change” (as defined under Section 382 of the Code and applicable Treasury Regulations) is subject to limitations on its ability to utilize its pre-change NOLs to offset post-change taxable income. We may experience a future ownership change under Section 382 of the Code that could affect our ability to utilize the NOLs to offset our income. Furthermore, our ability to utilize NOLs of companies that we have acquired or may acquire in the future may be subject to limitations. There is also a risk that due to regulatory changes, such as suspensions on the use of NOLs or other unforeseen reasons, our existing NOLs could expire or otherwise be unavailable to reduce future income tax liabilities, including for state tax purposes. For these reasons, we may not be able to utilize a material portion of the NOLs reflected on our balance sheets, even if we attain profitability, which could potentially result in increased future tax liability to us and could adversely affect our operating results and financial condition.

Changes in our effective tax rate or tax liability may have an adverse effect on our results of operations.

Our effective tax rate could increase due to several factors, including:

•changes in the relative amounts of income before taxes in the various jurisdictions in which we operate that have differing statutory tax rates;

•changes in tax laws, tax treaties, and regulations or the interpretation of them, including the Tax Cuts and Jobs Act and federal income tax legislation proposed by Congress;

•changes to our assessment about our ability to realize our deferred tax assets that are based on estimates of our future results, the prudence and feasibility of possible tax planning strategies, and the economic and political environments in which we do business;

•the outcome of current and future tax audits, examinations, or administrative appeals; and

•limitations or adverse findings regarding our ability to do business in some jurisdictions.

Any of these developments could adversely affect our results of operations.

Our reported financial results may be adversely affected by changes in accounting principles generally accepted in the United States.

GAAP is subject to interpretation by the Financial Accounting Standards Board, the SEC and various bodies formed to promulgate and interpret applicable accounting principles. A change in these principles or interpretations could have a significant effect on our reported results of operations and could affect the reporting of transactions already completed before the announcement of a change.

If our estimates or judgments relating to our critical accounting policies prove to be incorrect, our results of operations could be adversely affected.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in our unaudited condensed consolidated financial statements and accompanying notes. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, as described in Note 2 in the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q. The results of these estimates form the basis for making judgments about the carrying values of assets, liabilities and equity, and the amount of revenue and expenses that are not readily apparent from other sources. Significant estimates and judgments involve revenue recognition, deferred contract costs, and the valuation of our stock-based compensation awards, among others. Our results of operations may be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our results of operations to fall below the expectations of securities analysts and investors, resulting in a decline in the market price of our Class A common stock.

Risks Related to Intellectual Property

Any failure to obtain, maintain, protect or enforce our intellectual property and proprietary rights could impair our ability to protect our proprietary technology and our brand.

Our success depends to a significant degree on our ability to obtain, maintain, protect and enforce our intellectual property rights, including our proprietary technology, know-how and our brand. We rely on a combination of trademarks, trade

secret laws, patents, copyrights, service marks, contractual restrictions, and other intellectual property laws and confidentiality procedures to establish and protect our proprietary rights. However, the steps we take to obtain, maintain, protect and enforce our intellectual property rights may be inadequate. We will not be able to protect our intellectual property rights if we are unable to enforce our rights or if we do not detect unauthorized use of our intellectual property rights. If we fail to protect our intellectual property rights adequately, our competitors may gain access to our proprietary technology and develop and commercialize substantially identical products, services or technologies, our business, financial condition, results of operations or prospects may be harmed. In addition, defending our intellectual property rights might entail significant expense. Any patents, trademarks, or other intellectual property rights that we have or may obtain may be challenged or circumvented by others or invalidated or held unenforceable through administrative process, including re-examination, inter partes review, interference and derivation proceedings and equivalent proceedings in foreign jurisdictions (e.g., opposition proceedings) or litigation. Despite our pending U.S. patent applications, there can be no assurance that our patent applications will result in issued patents. Even if we continue to seek patent protection in the future, we may be unable to obtain or maintain patent protection for our technology. In addition, any patents issued from pending or future patent applications or licensed to us in the future may not provide us with competitive advantages, or may be successfully challenged by third parties. There may be issued patents of which we are not aware, held by third parties that, if found to be valid and enforceable, could be alleged to be infringed by our current or future technologies or products. There also may be pending patent applications of which we are not aware that may result in issued patents, which could be alleged to be infringed by our current or future technologies or products. Furthermore, legal standards relating to the validity, enforceability, and scope of protection of intellectual property rights are uncertain. Despite our precautions, it may be possible for unauthorized third parties to copy our products and platform capabilities and use information that we regard as proprietary to create products that compete with ours. Patent, trademark, copyright, and trade secret protection may not be available to us in every country in which our products are available. For example, as we have expanded internationally, we have been unable to register and obtain the right to use the Datadog trademark in certain jurisdictions, including in the EU, and as we continue to expand, we may face similar issues in other jurisdictions. The value of our intellectual property could diminish if others assert rights in or ownership of our trademarks and other intellectual property rights, or trademarks that are similar to our trademarks. We may be unable to successfully resolve these types of conflicts to our satisfaction. In some cases, litigation or other actions may be necessary to protect or enforce our trademarks and other intellectual property rights. Furthermore, third parties may assert intellectual property claims against us, and we may be subject to liability, required to enter into costly license agreements, or required to rebrand our products and/or prevented from selling some of our products if third parties successfully oppose or challenge our trademarks or successfully claim that we infringe, misappropriate or otherwise violate their trademarks or other intellectual property rights. In addition, the laws of some foreign countries may not be as protective of intellectual property rights as those in the United States, and mechanisms for enforcement of intellectual property rights may be inadequate. As we expand our international activities, our exposure to unauthorized copying and use of our products and platform capabilities and proprietary information will likely increase. Moreover, policing unauthorized use of our technologies, trade secrets, and intellectual property may be difficult, expensive, and time-consuming, particularly in foreign countries where the laws may not be as protective of intellectual property rights as those in the United States and where mechanisms for enforcement of intellectual property rights may be weak. Accordingly, despite our efforts, we may be unable to prevent third parties from infringing upon, misappropriating or otherwise violating our intellectual property rights.

We enter into confidentiality and invention assignment agreements with our employees and consultants and enter into confidentiality agreements with other third parties, including suppliers and other partners. However, we cannot guarantee that we have entered into such agreements with each party that has or may have had access to our proprietary information, know-how and trade secrets. Moreover, no assurance can be given that these agreements will be effective in controlling access to, distribution, use, misuse, misappropriation, reverse engineering or disclosure of our proprietary information, know-how and trade secrets. Further, these agreements may not prevent our competitors from independently developing technologies that are substantially equivalent or superior to our products and platform capabilities. These agreements may be breached, and we may not have adequate remedies for any such breach.

In order to protect our intellectual property rights, we may be required to spend significant resources to monitor and protect our intellectual property rights. Litigation may be necessary in the future to enforce our intellectual property rights and to protect our trade secrets. Litigation brought to protect and enforce our intellectual property rights could be costly, time-consuming, and distracting to management, and could result in the impairment or loss of portions of our intellectual property. Further, our efforts to enforce our intellectual property rights may be met with defenses, counterclaims, and countersuits attacking the validity and enforceability of our intellectual property rights, and if such defenses, counterclaims or countersuits are successful, we could lose valuable intellectual property rights. Our inability to protect our proprietary technology against unauthorized copying or use, as well as any costly litigation or diversion of our management’s attention and resources, could delay further sales or the implementation of our products and platform capabilities, impair the functionality of our products and platform capabilities, delay introductions of new solutions, result in our substituting inferior or more costly technologies into our products, or injure our reputation.

We may become subject to intellectual property disputes, which are costly and may subject us to significant liability and increased costs of doing business.

We may become subject to intellectual property disputes. Our success depends, in part, on our ability to develop and commercialize our products and services without infringing, misappropriating or otherwise violating the intellectual property rights of third parties. However, we may not be aware that our products or services are infringing, misappropriating or otherwise violating third-party intellectual property rights and such third parties may bring claims alleging such infringement, misappropriation or violation. Lawsuits are time-consuming and expensive to resolve and they divert management’s time and attention. The software industry is characterized by the existence of a large number of patents, copyrights, trademarks, trade secrets, and other intellectual and proprietary rights. Companies in the software industry are often required to defend against litigation claims based on allegations of infringement, misappropriation or other violations of intellectual property rights. Our technologies may not be able to withstand any third-party claims against their use. In addition, many companies have the capability to dedicate substantially greater resources to enforce their intellectual property rights and to defend claims that may be brought against them. We do not currently have a large patent portfolio, which could prevent us from deterring patent infringement claims through our own patent portfolio, and our competitors and others may now and in the future have significantly larger and more mature patent portfolios than we have. Any litigation may also involve patent holding companies or other adverse patent owners that have no relevant product revenue, and therefore, our patent applications may provide little or no deterrence as we would not be able to assert them against such entities or individuals. If a third party is able to obtain an injunction preventing us from accessing such third-party intellectual property rights, or if we cannot license or develop alternative technology for any infringing aspect of our business, we would be forced to limit or stop sales of our products and platform capabilities or cease business activities related to such intellectual property. Although we carry general liability insurance, our insurance may not cover potential claims of this type or may not be adequate to indemnify us for all liability that may be imposed. We cannot predict the outcome of lawsuits and cannot ensure that the results of any such actions will not have an adverse effect on our business, financial condition or results of operations. Any intellectual property litigation to which we might become a party, or for which we are required to provide indemnification, may require us to do one or more of the following:

•cease selling or using products or services that incorporate the intellectual property rights that we allegedly infringe, misappropriate or violate;

•make substantial payments for legal fees, settlement payments or other costs or damages;

•obtain a license, which may not be available on reasonable terms or at all, to sell or use the relevant technology; or

•redesign the allegedly infringing products to avoid infringement, misappropriation or violation, which could be costly, time-consuming or impossible.

Even if the claims do not result in litigation or are resolved in our favor, these claims, and the time and resources necessary to resolve them, could divert the resources of our management and harm our business and operating results. Moreover, there could be public announcements of the results of hearings, motions or other interim proceedings or developments and if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our common stock. We expect that the occurrence of infringement claims is likely to grow as the market for our platform and products grows. Accordingly, our exposure to damages resulting from infringement claims could increase and this could further exhaust our financial and management resources.

We use open source software in our products, which could negatively affect our ability to sell our services or subject us to litigation or other actions.

We use open source software in our products and we expect to continue to incorporate open source software in our services in the future. Few of the licenses applicable to open source software have been interpreted by courts, and there is a risk that these licenses could be construed in a manner that could impose unanticipated conditions or restrictions on our ability to commercialize our products. Moreover, we cannot ensure that we have not incorporated additional open source software in our software in a manner that is inconsistent with the terms of the applicable license or our current policies and procedures. If we fail to comply with these licenses, we may be subject to certain requirements, including requirements that we offer our solutions that incorporate the open source software for no cost, that we make available source code for modifications or derivative works we create based upon, incorporating or using the open source software and that we license such modifications or derivative works under the terms of applicable open source licenses. If an author or other third party that distributes such open source software were to allege that we had not complied with the conditions of one or more of these licenses, we could be required to incur significant legal expenses defending against such allegations and could be subject to significant damages, enjoined from the sale of our products that contained the open source software and required to comply with onerous conditions or restrictions on these products, which could disrupt the distribution and sale of these products. From time to time, there have been claims

challenging the ownership rights in open source software against companies that incorporate it into their products and the licensors of such open source software provide no warranties or indemnities with respect to such claims. As a result, we and our customers could be subject to lawsuits by parties claiming ownership of what we believe to be open source software. Litigation could be costly for us to defend, have a negative effect on our business, financial condition and results of operations, or require us to devote additional research and development resources to change our products. In addition, although we employ open source software license screening measures, if we were to combine our proprietary software products with open source software in a certain manner we could, under certain open source licenses, be required to release the source code of our proprietary software products. Some open source projects have known vulnerabilities and architectural instabilities and are provided on an “as-is” basis which, if not properly addressed, could negatively affect the performance of our product. If we inappropriately use or incorporate open source software subject to certain types of open source licenses that challenge the proprietary nature of our products, we may be required to re-engineer such products, discontinue the sale of such products or take other remedial actions.

Risks Associated with our International Operations

Our current operations are international in scope, and we plan further geographic expansion, creating a variety of operational challenges.

A component of our growth strategy involves the further expansion of our operations and customer base internationally. Revenue, as determined based on the billing address of our customers, from regions outside of North America was 28% for each of the six months ended June 30, 2022 and 2021. Beyond North America, we now have sales presence internationally, including in Amsterdam, Dublin, London, Paris, Seoul, Singapore, Sydney, and Tokyo. We are continuing to adapt to and develop strategies to address international markets, but there is no guarantee that such efforts will have the desired effect. For example, we anticipate that we will need to establish relationships with new partners in order to expand into certain countries, and if we fail to identify, establish and maintain such relationships, we may be unable to execute on our expansion plans. As of June 30, 2022, approximately 39% of our full-time employees were located outside of the United States, 34% of whom were located in France. We expect that our international activities will continue to grow for the foreseeable future as we continue to pursue opportunities in existing and new international markets, which will require significant dedication of management attention and financial resources.

Our current and future international business and operations involve a variety of risks, including:

•slower than anticipated availability and adoption of cloud and hybrid IT infrastructures by international businesses;

•changes in a specific country’s or region’s political or economic conditions;

•the need to adapt and localize our products for specific countries;

•greater difficulty collecting accounts receivable and longer payment cycles;

•potential changes in trade relations, sanctions, regulations, or laws;

•unexpected changes in laws, regulatory requirements, or tax laws;

•more stringent regulations relating to privacy and data security and the unauthorized use of, or access to, commercial and personal information, particularly in Europe and the United Kingdom;

•differing and potentially more onerous labor regulations, especially in Europe, where labor laws are generally more advantageous to employees as compared to the United States, including deemed hourly wage and overtime regulations in these locations;

•challenges inherent in efficiently managing, and the increased costs associated with, an increased number of employees over large geographic distances, including the need to implement appropriate systems, policies, benefits, and compliance programs that are specific to each jurisdiction;

•potential changes in laws, regulations and costs affecting our U.K. operations and local employees due to Brexit;

•difficulties in managing a business in new markets with diverse cultures, languages, customs, legal systems, alternative dispute systems, and regulatory systems;

•increased travel, real estate, infrastructure, and legal compliance costs associated with international operations;

•currency exchange rate fluctuations and the resulting effect on our revenue and expenses, and the cost and risk of entering into hedging transactions if we chose to do so in the future;

•limitations on our ability to reinvest earnings from operations in one country to fund the capital needs of our operations in other countries;

•laws and business practices favoring local competitors or general market preferences for local vendors;

•limited or insufficient intellectual property protection or difficulties obtaining, maintaining, protecting or enforcing our intellectual property rights, including our trademarks and patents;

•political instability, terrorist activities and military conflict, including the war in Ukraine;

•an outbreak of a contagious disease, which may cause us or our third-party providers and/or customers to temporarily suspend our or their respective operations in the affected city or country;

•exposure to liabilities under anti-corruption and anti-money laundering laws, including the FCPA, U.S. bribery laws, the UK Bribery Act, and similar laws and regulations in other jurisdictions; and

•adverse tax burdens and foreign exchange controls that could make it difficult to repatriate earnings and cash.

If we invest substantial time and resources to further expand our international operations and are unable to do so successfully and in a timely manner, our business and results of operations will suffer.

We are exposed to fluctuations in currency exchange rates, which could negatively affect our results of operations.

Our sales contracts are denominated in U.S. dollars, and therefore, our revenue is not subject to foreign currency risk. However, a strengthening of the U.S. dollar could increase the real cost of our products and platform capabilities to our customers outside of the United States, which could adversely affect our results of operations. In addition, an increasing amount of our operating expenses are incurred outside the United States. These operating expenses are denominated in foreign currencies and are subject to fluctuations due to changes in foreign currency exchange rates. If we are not able to successfully hedge against the risks associated with currency fluctuations, our results of operations could be adversely affected.

Our international operations may subject us to potential adverse tax consequences.

We are expanding our international operations to better support our growth into international markets. Our corporate structure and associated transfer pricing policies contemplate future growth in international markets, and consider the functions, risks, and assets of the various entities involved in intercompany transactions. The amount of taxes we pay in different jurisdictions may depend on the application of the tax laws of the various jurisdictions, including the United States, to our international business activities, changes in tax rates, new or revised tax laws or interpretations of existing tax laws and policies, and our ability to operate our business in a manner consistent with our corporate structure and intercompany arrangements. The taxing authorities of the jurisdictions in which we operate may challenge our methodologies for pricing intercompany transactions pursuant to our intercompany arrangements or disagree with our determinations as to the income and expenses attributable to specific jurisdictions. If such a challenge or disagreement were to occur, and our position was not sustained, we could be required to pay additional taxes, interest, and penalties, which could result in one-time tax charges, higher effective tax rates, reduced cash flows and lower overall profitability of our operations. Our financial statements could fail to reflect adequate reserves to cover such a contingency.

Risks Related to Ownership of Our Class A Common Stock

Our stock price may be volatile, and the value of our Class A common stock may decline.

The market price of our Class A common stock may be highly volatile and may fluctuate or decline substantially as a result of a variety of factors, some of which are beyond our control, including:

•actual or anticipated fluctuations in our financial condition or results of operations;

•variance in our financial performance from expectations of securities analysts;

•changes in the pricing of subscriptions to our products;

•changes in our projected operating and financial results;

•changes in laws or regulations applicable to our platform and products;

•announcements by us or our competitors of significant business developments, acquisitions, or new offerings;

•significant data breaches, disruptions to or other incidents involving our software;

•our involvement in litigation;

•future sales of our Class A common stock by us or our stockholders;

•changes in senior management or key personnel;

•the trading volume of our Class A common stock;

•changes in the anticipated future size and growth rate of our market; and

•general economic and market conditions.

Broad market and industry fluctuations, as well as general economic, political, regulatory, and market conditions including those related to the COVID-19 pandemic and the war in Ukraine and related sanctions, may also negatively impact the market price of our Class A common stock. In addition, technology stocks have historically experienced high levels of volatility. In the past, companies that have experienced volatility in the market price of their securities have been subject to securities class action litigation. We may be the target of this type of litigation in the future, which could result in substantial expenses and divert our management’s attention.

The dual class structure of our common stock has the effect of concentrating voting control with holders of our Class B common stock, including our executive officers, directors and their affiliates, which will limit the ability of holders of our Class A common stock to influence the outcome of important transactions.

Our Class B common stock has ten votes per share and our Class A common stock has one vote per share. As of June 30, 2022, our outstanding shares of Class B common stock represented approximately 47% of the voting power of our outstanding capital stock. As a result, the holders of our Class B common stock, which includes certain of our directors, executive officers and their affiliates, will be able to exercise considerable influence over matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions, such as a merger or other sale of our company or our assets, even if their stock holdings represent less than 50% of the outstanding shares of our capital stock. This concentration of ownership will limit the ability of other stockholders to influence corporate matters and may cause us to make strategic decisions that could involve risks to holders of our Class A common stock or that may not be aligned with the interests of holders of our Class A common stock. This control may adversely affect the market price of our Class A common stock.

Further, future transfers by holders of our Class B common stock will generally result in those shares converting into shares of our Class A common stock, subject to limited exceptions, such as certain transfers effected for tax or estate planning purposes. The conversion of shares of our Class B common stock into shares of our Class A common stock will have the effect, over time, of increasing the relative voting power of those holders of Class B common stock who retain their shares in the long term.

We cannot predict the impact our dual class structure may have on the market price of our Class A common stock.

We cannot predict whether our dual class structure, combined with the concentrated control of our stockholders who held our capital stock prior to the completion of our initial public offering, or IPO, including our executive officers, employees and directors and their affiliates, will result in a lower or more volatile market price of our Class A common stock or in adverse publicity or other adverse consequences. For example, certain index providers have announced restrictions on including companies with multiple class share structures in certain of their indexes. For example, in July 2017, FTSE Russell and Standard & Poor’s announced that they would cease to allow most newly public companies utilizing dual or multi-class capital structures to be included in their indices. Under the announced policies, our dual class capital structure would make us ineligible for inclusion in any of these indices. Given the sustained flow of investment funds into passive strategies that seek to track certain indexes, exclusion from stock indexes would likely preclude investment by many of these funds and could make our Class A common stock less attractive to other investors. As a result, the market price of our Class A common stock could be adversely affected.

Future sales of our Class A common stock in the public market could cause the market price of our Class A common stock to decline.

Sales of a substantial number of shares of our Class A common stock in the public market, or the perception that these sales might occur, could depress the market price of our Class A common stock and could impair our ability to raise capital through the sale of additional equity securities. Many of our stockholders who held our capital stock prior to the completion of our IPO have substantial unrecognized gains on the value of the equity they hold based upon the price at which shares were sold in our IPO, and therefore they may take steps to sell their shares or otherwise secure the unrecognized gains on those shares.

We are unable to predict the timing of or the effect that such sales may have on the prevailing market price of our Class A common stock.

We have registered all of the shares of Class A common stock and Class B common stock issuable upon exercise of outstanding options or other equity incentives we may grant in the future, for public resale under the Securities Act. The shares of Class A common stock and Class B common stock will become eligible for sale in the public market to the extent such options are exercised, subject to compliance with applicable securities laws.

Further, as of June 30, 2022, holders of a substantial number of shares had rights, subject to certain conditions, to require us to file registration statements covering the sale of their shares or to include their shares in registration statements that we may file for ourselves or other stockholders.

Our issuance of additional capital stock in connection with financings, acquisitions, investments, our equity incentive plans or otherwise will dilute all other stockholders.

We expect to issue additional capital stock in the future that will result in dilution to all other stockholders. We expect to continue to grant equity awards to employees, directors and consultants under our equity incentive plans. We may also raise capital through equity financings in the future. As part of our business strategy, we have and may continue to acquire or make investments in companies, products or technologies and issue equity securities to pay for any such acquisition or investment. Any such issuances of additional capital stock may cause stockholders to experience significant dilution of their ownership interests and the per share value of our Class A common stock to decline. Furthermore, if we issue additional equity or convertible debt securities, the new equity securities could have rights senior to those of our common stock. For example, if we elect to settle our conversion obligation under our 0.125% Convertible Senior Notes due 2025, or our 2025 Notes, in shares of our Class A common stock or a combination of cash and shares of our Class A common stock, the issuance of such Class A common stock may dilute the ownership interests of our stockholders and sales in the public market could adversely affect prevailing market prices.

If securities or industry analysts cease publishing research or publish unfavorable or inaccurate research about our business, or if we fail to meet or significantly exceed our publicly announced financial guidance or the expectations of analysts or public investors, the market price and trading volume of our Class A common stock could decline.

The market price and trading volume of our Class A common stock will be heavily influenced by the way analysts interpret our financial information and other disclosures. We do not have control over these analysts. If securities or industry analysts cease coverage of us, downgrade our Class A common stock, or publish negative reports about our business, our stock price would likely decline. In addition, the stock prices of many companies in the technology industry have declined significantly after those companies have failed to meet, or significantly exceed, the financial guidance publicly announced by those companies or the expectations of analysts. If our financial results fail to meet, or significantly exceed, our announced guidance or the expectations or analysts or public investors, analysts could downgrade or Class A common stock or publish unfavorable research on us. As a result, demand for our Class A common stock could decrease, which might cause our stock price to decline and could decrease the trading volume of our Class A common stock.

We do not intend to pay dividends for the foreseeable future.

We have never declared or paid any cash dividends on our capital stock, and we do not intend to pay any cash dividends in the foreseeable future. Any determination to pay dividends in the future will be at the discretion of our board of directors. Accordingly, holders of our Class A common stock may need to rely on sales of their holdings of Class A common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investment.

We will continue to incur increased costs as a result of operating as a public company, and our management will be required to continue to devote substantial time to compliance with our public company responsibilities and corporate governance practices.

We have incurred significant legal, accounting, insurance, and other expenses as a public company, which we expect to further increase. The Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements of the Nasdaq Global Select Market and other applicable securities rules and regulations impose various requirements on public companies. Our management and other personnel devote a substantial amount of time to compliance with these requirements. These rules and regulations contribute to increased legal and financial compliance costs and make some activities more time-consuming and costly.

We are obligated to develop and maintain proper and effective internal controls over financial reporting, and any failure to maintain the adequacy of these internal controls may adversely affect investor confidence in our company and, as a result, the value of our Class A common stock.

We are required, pursuant to Section 404 of the Sarbanes-Oxley Act, to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting on an annual basis. This assessment will need to include disclosure of any material weaknesses identified by our management in our internal control over financial reporting. In addition, our independent registered public accounting firm is required to attest to the effectiveness of our internal control over financial reporting. Our compliance with Section 404 requires that we incur substantial expenses and expend significant management efforts. We have hired, and need to continue to hire, additional accounting and financial staff with appropriate public company experience and technical accounting knowledge to comply with Section 404.

During the evaluation and testing process of our internal controls in future years, if we identify one or more material weaknesses in our internal control over financial reporting, we will be unable to certify that our internal control over financial reporting is effective. We cannot assure you that there will not be material weaknesses in our internal control over financial reporting in the future. Any failure to maintain internal control over financial reporting could severely inhibit our ability to accurately report our financial condition or results of operations. If we are unable to conclude that our internal control over financial reporting is effective, or if our independent registered public accounting firm determines we have a material weakness in our internal control over financial reporting, we could lose investor confidence in the accuracy and completeness of our financial reports, the market price of our Class A common stock could decline, and we could be subject to sanctions or investigations by the SEC or other regulatory authorities. Failure to remedy any material weakness in our internal control over financial reporting, or to implement or maintain other effective control systems required of public companies, could also restrict our future access to the capital markets.

Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of our company more difficult, limit attempts by our stockholders to replace or remove our current management and limit the market price of our Class A common stock.

Provisions in our amended and restated certificate of incorporation and amended and restated bylaws may have the effect of delaying or preventing a change of control or changes in our management. Our amended and restated certificate of incorporation and amended and restated bylaws include provisions that:

•authorize our board of directors to issue, without further action by the stockholders, shares of undesignated preferred stock with terms, rights, and preferences determined by our board of directors that may be senior to our Class A common stock;

•require that any action to be taken by our stockholders be effected at a duly called annual or special meeting and not by written consent;

•specify that special meetings of our stockholders can be called only by our board of directors, the chairperson of our board of directors, or our chief executive officer;

•establish an advance notice procedure for stockholder proposals to be brought before an annual meeting, including proposed nominations of persons for election to our board of directors;

•establish that our board of directors is divided into three classes, with each class serving three-year staggered terms;

•prohibit cumulative voting in the election of directors;

•provide that our directors may be removed for cause only upon the vote of at least 66 2/3% of our outstanding shares of voting stock;

•provide that vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than a quorum; and

•require the approval of our board of directors or the holders of at least 66 2/3% of our outstanding shares of voting stock to amend our bylaws and certain provisions of our certificate of incorporation.

These provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors, which is responsible for appointing the members of our management. In addition, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which generally, subject to certain exceptions, prohibits a

Delaware corporation from engaging in any of a broad range of business combinations with any “interested” stockholder for a period of three years following the date on which the stockholder became an “interested” stockholder. Any of the foregoing provisions could limit the price that investors might be willing to pay in the future for shares of our Class A common stock, and they could deter potential acquirers of our company, thereby reducing the likelihood that holders of our Class A common stock would receive a premium for their shares of our Class A common stock in an acquisition.

Our amended and restated certificate of incorporation designates the Court of Chancery of the State of Delaware and the federal district courts of the United States of America as the exclusive forums for substantially all disputes between us and our stockholders, which could restrict our stockholders’ ability to choose the judicial forum for disputes with us or our directors, officers, or employees.

Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware is the exclusive forum for the following types of actions or proceedings under Delaware statutory or common law: any derivative action or proceeding brought on our behalf; any action asserting a breach of a fiduciary duty; any action asserting a claim against us arising pursuant to the Delaware General Corporation Law, our amended and restated certificate of incorporation, or our amended and restated bylaws; or any action asserting a claim against us that is governed by the internal affairs doctrine. The provisions would not apply to suits brought to enforce a duty or liability created by the Exchange Act. In addition, our amended and restated certificate of incorporation provides that the federal district courts of the United States of America will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act.

These choice of forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees. While the Delaware courts have determined that such choice of forum provisions are facially valid, a stockholder may nevertheless seek to bring a claim in a venue other than those designated in the exclusive forum provisions. In such instance, we would expect to vigorously assert the validity and enforceability of the exclusive forum provisions of our amended and restated certificate of incorporation. This may require significant additional costs associated with resolving such action in other jurisdictions and there can be no assurance that the provisions will be enforced by a court in those other jurisdictions.

Risks Related to Our Outstanding 2025 Notes

We may not have sufficient cash flow from our business to make payments on our significant debt when due, and we may incur additional indebtedness in the future.

In June 2020, we issued the 2025 Notes in a private placement. We may be required to use a substantial portion of our cash flows from operations to pay interest and principal on our indebtedness. Our ability to make scheduled payments of the principal of, to pay interest on or to refinance our indebtedness, including the 2025 Notes, depends on our future performance, which is subject to economic, financial, competitive and other factors beyond our control. Our business may not continue to generate cash flow from operations in the future sufficient to service our debt and make necessary capital expenditures. If we are unable to generate such cash flow, we may be required to adopt one or more alternatives, such as selling assets, restructuring debt or obtaining additional equity capital on terms that may be onerous or highly dilutive. Our ability to refinance our indebtedness will depend on the capital markets and our financial condition at such time. We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on our debt obligations.

In addition, we may incur substantial additional debt in the future, subject to the restrictions contained in our future debt agreements, some of which may be secured debt. We are not restricted under the terms of the indenture governing the 2025 Notes, from incurring additional debt, securing existing or future debt, recapitalizing our debt, repurchasing our stock, pledging our assets, making investments, paying dividends, guaranteeing debt or taking a number of other actions that are not limited by the terms of the indenture governing the 2025 Notes that could have the effect of diminishing our ability to make payments on the 2025 Notes when due.

The conditional conversion feature of the 2025 Notes may adversely affect our financial condition and operating results.

In the event the conditional conversion feature of the 2025 Notes is triggered, as it was during the quarter ended March 31, 2022, holders of the 2025 Notes are entitled to convert the notes at any time during specified periods at their option. If one or more holders elect to convert their 2025 Notes, unless we elect to satisfy our conversion obligation by delivering solely shares of our Class A common stock (other than paying cash in lieu of delivering any fractional share), we would be required to settle a portion or all of our conversion obligation through the payment of cash, which could adversely affect our liquidity. In addition, even if holders do not elect to convert their 2025 Notes when these conversion triggers are satisfied, we could be

required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the 2025 Notes as a current rather than long-term liability, which would result in a material reduction of our net working capital.

The capped call transactions may affect the value of the 2025 Notes and our Class A common stock.

In connection with the pricing of the 2025 Notes, we entered into capped call transactions with the option counterparties. The capped call transactions cover, subject to customary adjustments, the number of shares of our common stock that initially underlie the 2025 Notes. The capped call transactions are expected generally to partially offset the potential dilution to our Class A common stock as a result of conversion of the 2025 Notes. In connection with establishing their initial hedges of the capped call transactions, the option counterparties or their respective affiliates entered into various derivative transactions with respect to our Class A common stock concurrently with or shortly after the pricing of the 2025 Notes, including with certain investors in the 2025 Notes.

In addition, the option counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to our common stock and/or purchasing or selling our Class A common stock or other securities of ours in secondary market transactions following the pricing of the 2025 Notes on June 2, 2020 and prior to the maturity of the 2025 Notes. They are likely to do so on each exercise date for the capped call transactions, which are expected to occur during each 30 trading day period beginning on the 31st scheduled trading day prior to the maturity date of the 2025 Notes, or following any termination of any portion of the capped call transactions in connection with any repurchase, redemption or early conversion of the 2025 Notes. This activity could also cause or prevent an increase or decrease in the price of our Class A common stock or the 2025 Notes. The potential effect, if any, of these transactions on the price of our Class A common stock or the 2025 Notes will depend in part on market conditions and cannot be ascertained at this time. Any of these activities could adversely affect the value of our Class A common stock.

We are subject to counterparty risk with respect to the capped call transactions.

The counterparties to the capped call transactions are financial institutions, and we will be subject to the risk that one or more of the option counterparties may default, fail to perform or exercise their termination rights under the capped call transactions. Our exposure to the credit risk of the option counterparties will not be secured by any collateral. If a counterparty to the capped call transactions becomes subject to insolvency proceedings, we will become an unsecured creditor in those proceedings with a claim equal to our exposure at the time under such transaction. Our exposure will depend on many factors but, generally, our exposure will increase if the market price or the volatility of our common stock increases. In addition, upon a default, failure to perform or a termination of the capped call transactions by a counterparty, we may suffer more dilution than we currently anticipate with respect to our common stock.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(a)Recent Sales of Unregistered Equity Securities

In June 2022, we issued 191,809 shares of Class A common stock as consideration in an acquisition. The issuance was deemed exempt from registration under the Securities Act pursuant to the exemption provided by Section 4(a)(2) of the Securities Act as a transaction by an issuer not involving a public offering.

(b) Use of Proceeds

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

Not applicable.

ITEM 6. EXHIBITS

Incorporated by Reference

Exhibit
Number

Description

Form

File No.

Exhibit

Filing Date

Filed
Herewith

3.1

Amended and Restated Certificate of Incorporation of Datadog, Inc.

8-K

001-39051

3.1

September 23, 2019

3.2

Amended and Restated Bylaws of Datadog, Inc.

S-1/A

333-233428

3.4

August 23, 2019

10.1

Performance Stock Units (PSU) Grant Notice and Award Agreement.

10.2**

Lease, by and between Datadog, Inc. and FC Eighth Ave., LLC, dated July 28, 2022.

31.1

Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2

Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1*

Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2*

Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS

XBRL Instance Document

101.SCH

XBRL Taxonomy Extension Schema Document

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

XBRL Taxonomy Extension Label Linkbase Document

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document

_________________


*			This certification is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
**			Certain information has been excluded from this exhibit (indicated by asterisks) because such information is both not material and the type that the registrant customarily and actually treats as private or confidential.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	DATADOG, INC.

Date: August 8, 2022	By:	/s/ Olivier Pomel
	Name:	Olivier Pomel
	Title:	Chief Executive Officer and Director (Principal Executive Officer)

Date: August 8, 2022	By:	/s/ David Obstler
	Name:	David Obstler
	Title:	Chief Financial Officer (Principal Financial and Accounting Officer)

Document

Datadog, Inc.
PSU Award Grant Notice
(2019 Equity Incentive Plan)

Datadog, Inc. (the “Company”) has awarded to you (the “Participant”) the number of performance restricted stock units specified and on the terms set forth below in consideration of your services (the “PSU Award”). Your PSU Award is subject to all of the terms and conditions as set forth herein and in the Company’s 2019 Equity Incentive Plan (the “Plan”) and the Global PSU Award Agreement, including any additional terms and conditions for your country included in the appendix attached thereto (the “Agreement”), which are incorporated herein in their entirety. Capitalized terms not explicitly defined herein but defined in the Plan or the Agreement shall have the meanings set forth in the Plan or the Agreement.


Participant:			______________________________
Date of Grant:			______________________________
Vesting Commencement Date:			______________________________
Target Number of PSUs:			______________________________
Maximum Number of PSUs:			______________________________

Vesting Schedule: [___________________]

The Participant must remain in Continuous Service through each such vesting date in order for the relevant portion of the Eligible PSUs to vest. Upon the Participant’s termination of Continuous Service, all then-unvested PSUs shall be immediately forfeited.

Issuance Schedule: One share of Class A Common Stock will be issued for each performance restricted stock unit which vests at the time set forth in Section 5 of the Agreement.

Participant Acknowledgements: By your signature below or by electronic acceptance or authentication in a form authorized by the Company, you understand and agree that:

The PSU Award is governed by this PSU Award Grant Notice (the “Grant Notice”), and the provisions of the Plan and the Agreement, all of which are made a part of this document. Unless otherwise provided in the Plan, this Grant Notice and the Agreement (together, the “PSU Award Agreement”) may not be modified, amended or revised except in a writing signed by you and a duly authorized officer of the Company.

You have read and are familiar with the provisions of the Plan, the PSU Award Agreement and the Prospectus. In the event of any conflict between the provisions in the PSU Award Agreement, or the Prospectus and the terms of the Plan, the terms of the Plan shall control.

The PSU Award Agreement sets forth the entire understanding between you and the Company regarding the acquisition of Class A Common Stock and supersedes all prior oral and written agreements, promises and/or representations on that subject with the exception of: (i) other equity awards previously granted to you, and (ii) any written employment agreement, offer letter, severance agreement, written severance plan or policy, or other written agreement between the Company and you in each case that specifies the terms that should govern this PSU Award.


Datadog, Inc.			Participant:
By:______________________________			______________________________
Signature			Signature
Title:_____________________________			Date:__________________________
Date:_____________________________

Datadog, Inc.

2019 Equity Incentive Plan

Global PSU Award Agreement

As reflected by your PSU Award Grant Notice (“Grant Notice”) Datadog, Inc. (the “Company”) has granted you a PSU Award under its 2019 Equity Incentive Plan (the “Plan”) for the number of performance restricted stock units as indicated in your Grant Notice (the “PSU Award”). The terms of your PSU Award as specified in this Global PSU Award Agreement for your PSU Award, including any additional terms and conditions for your country included in the appendix attached thereto (the “Agreement”) and the Grant Notice constitute your “PSU Award Agreement”. Capitalized terms not explicitly defined in this Agreement but defined in the Grant Notice or the Plan shall have the same definitions as in the Grant Notice or Plan, as applicable.

The general terms applicable to your PSU Award are as follows:

1.Governing Plan Document. Your PSU Award is subject to all the provisions of the Plan. Your PSU Award is further subject to all interpretations, amendments, rules and regulations, which may from time to time be promulgated and adopted pursuant to the Plan. In the event of any conflict between the PSU Award Agreement and the provisions of the Plan, the provisions of the Plan shall control.

2.Grant of the PSU Award. This PSU Award represents your right to be issued on a future date the number of shares of the Company’s Class A Common Stock that is equal to the number of performance restricted stock units computed in accordance with the terms of the Vesting Schedule set forth in the Grant Notice and subject to your satisfaction of the performance and vesting conditions set forth therein (the “Performance Restricted Stock Units”). Any additional Performance Restricted Stock Units that become subject to the PSU Award pursuant to Capitalization Adjustments as set forth in the Plan and the provisions of Section 3 below, if any, shall be subject, in a manner determined by the Board, to the same forfeiture restrictions, restrictions on transferability, and time and manner of delivery as applicable to the other Performance Restricted Stock Units covered by your PSU Award.

3.Dividends. You may become entitled to receive payments equal to any cash dividends and other distributions paid with respect to a corresponding number of shares of Class A Common Stock to be issued in respect of the Performance Restricted Stock Units covered by your PSU Award. Any such dividends or distributions shall be subject to the same forfeiture restrictions as apply to the Performance Restricted Stock Units and shall be paid at the same time that the corresponding shares are issued in respect of your vested Performance Restricted Stock Units, provided, however that to the extent any such dividends or distributions are paid in shares of Class A Common Stock, then you will automatically be granted a corresponding number of additional Performance Restricted Stock Units subject to the PSU Award (the “Dividend Units”), and further provided that such Dividend Units shall be subject to the same forfeiture restrictions and restrictions on transferability, and same timing requirements for issuance of shares, as apply to the Performance Restricted Stock Units subject to the PSU Award with respect to which the Dividend Units relate.

4.Withholding Obligations.

(a)You acknowledge that, regardless of any action taken by the Company or, if different, the Affiliate employing you (the “Employer”), the ultimate liability for all income tax (including U.S. federal, state, and local taxes and/or foreign taxes), social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related items related to your participation in the Plan and legally applicable to you (“Tax-Related Items”) is and remains your responsibility and may exceed the amount, if any, actually withheld by the Company or the Employer. You further acknowledge that the Company and/or your Employer (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the PSU Award, including, but not limited to, the grant of the PSU

Award, the vesting of the PSU Award, the issuance of shares in settlement of vesting of the PSU Award, the subsequent sale of any shares of Class A Common Stock acquired pursuant to the PSU Award and the receipt of any dividends, Dividend Units or other dividend equivalents; and (ii) do not commit to and are under no obligation to reduce or eliminate your liability for Tax-Related Items. Further, if you become subject to taxation in more than one country, you acknowledge that the Company and/or your Employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one country.

(b)Prior to any relevant taxable or tax withholding event, as applicable, you agree to make adequate arrangements satisfactory to the Company and/or the Employer to satisfy all Tax-Related Items. In this regard, you authorize the Company and/or the Employer, or their respective agents, at their discretion, to satisfy any applicable withholding obligations with regard to all Tax-Related Items by one or a combination of the following: (i) withholding from your wages or other cash compensation paid to you by the Company and/or the Employer; (ii) withholding from proceeds of the sale of shares of Class A Common Stock acquired upon settlement of the Performance Restricted Stock Units either through a voluntary sale or through a mandatory sale arranged by the Company (on your behalf pursuant to this authorization without further consent); (iii) withholding from shares of Class A Common Stock to be issued to you upon settlement of the Performance Restricted Stock Units; or (iv) any other method of withholding determined by the Company and permitted by Applicable Law; provided, however, that that if you are a Section 16 officer of the Company under the Exchange Act, then the Administrator shall establish the method of withholding from alternatives (i)-(iv) herein and, if the Administrator does not exercise its discretion prior to the applicable withholding event, then you shall be entitled to elect the method of withholding from the alternatives above.

(c)The Company and/or the Employer may withhold or account for Tax-Related Items by considering applicable statutory withholding amounts or other applicable withholding rates, including maximum rates applicable in your jurisdiction, in which case you may receive a refund of any over-withheld amount in cash and will have no entitlement to the equivalent amount in shares of Class A Common Stock. If the obligation for Tax-Related Items is satisfied by withholding in shares of Class A Common Stock, for tax purposes, you are deemed to have been issued the full number of shares of Class A Common Stock subject to the vested Performance Restricted Stock Units, notwithstanding that a number of the shares of Class A Common Stock is held back solely for the purpose of paying the Tax-Related Items.

(d)You agree to pay to the Company or the Employer any amount of Tax-Related Items that the Company or the Employer may be required to withhold or account for as a result of your participation in the Plan that cannot be satisfied by the means previously described. The Company may refuse to issue or deliver the shares of Class A Common Stock, or the proceeds of the sale of shares of Class A Common Stock, if you fail to comply with your obligations in connection with the Tax-Related Items.

5.Date of Issuance.

(e)To the extent your PSU Award is exempt from application of Section 409A of the Code and any state law of similar effect (collectively “Section 409A”), the Company will deliver to you a number of shares of the Company’s Class A Common Stock equal to the number of vested Performance Restricted Stock Units subject to your PSU Award, including any additional Performance Restricted Stock Units received pursuant to Section 3 above that relate to those vested Performance Restricted Stock Units on the applicable vesting date(s), or if such date is not a business day, such delivery date shall instead fall on the next following business day (the “Original Distribution Date”).

(f)Notwithstanding the foregoing, in the event that you are prohibited from selling shares of the Company’s Class A Common Stock in the public market on the scheduled delivery date by the Trading Policy or otherwise, and the Company elects not to satisfy its tax withholding obligations by withholding shares from your distribution, then such shares shall not be delivered on such Original Distribution Date

and shall instead be delivered on the first business day when you are not prohibited from selling shares of the Company’s Class A Common Stock in the open market, but in no event later than the fifteenth (15th) day of the third calendar month of the calendar year following the calendar year in which the shares covered by the PSU Award vest. Delivery of the shares pursuant to the provisions of Section 5 is intended to comply with the requirements for the short-term deferral exemption available under Treasury Regulations Section 1.409A-1(b)(4) and shall be construed and administered in such manner. However, if and to the extent the PSU Award is a Non-Exempt Award, the provisions of the Plan with respect to Non-Exempt Awards shall apply in lieu of the provisions in this Section 5.

6.Nature of Grant. In accepting the PSU Award, you acknowledge, understand and agree that:

(g)the Plan is established voluntarily by the Company, it is discretionary in nature, and may be amended, suspended or terminated by the Company at any time, to the extent permitted by the Plan;

(h)the grant of the PSU Award is exceptional, voluntary and occasional and does not create any contractual or other right to receive future grants of Performance Restricted Stock Units, other equity awards or benefits in lieu of equity awards, even if equity awards have been granted in the past;

(i)all decisions with respect to future PSU Awards or other grants, if any, will be at the sole discretion of the Company;

(j)the PSU Award grant and your participation in the Plan shall not create a right to employment or be interpreted as forming or amending an employment or service contract with the Company, the Employer or any Affiliate;

(k)you are voluntarily participating in the Plan;

(l)the PSU Award and any shares of Class A Common Stock acquired under the Plan, and the income from and value of same, are not intended to replace any pension rights or compensation;

(m)the PSU Award and any shares of Class A Common Stock acquired under the Plan, and the income from and value of same, are not part of normal or expected compensation for any purpose, including, without limitation, calculating any severance, resignation, termination, redundancy, dismissal, end-of-service payments, holiday pay, bonuses, long-service awards, pension or retirement or welfare benefits or similar mandatory payments;

(n)the future value of the shares of Class A Common Stock underlying the PSU Award is unknown, indeterminable, and cannot be predicted with certainty;

(o)if the PSU Award vests and you are issued shares of Class A Common Stock, the value of such shares of Class A Common Stock may increase or decrease in value following the date the shares are issued; even below the Fair Market Value on the date the PSU Award is granted to you;

(p)for purposes of the PSU Award, your Continuous Service will be considered terminated as of the date you are no longer actively providing services to the Company or one of its Affiliates (regardless of the reason for such termination and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where you are employed or the terms of your employment agreement, if any), and unless otherwise expressly provided in this Agreement or determined by the Company, your right to vest in the PSU Award under the Plan, if any, will terminate as of such date and will not be extended by any notice period or any period of “garden leave” or similar period mandated under employment laws in the jurisdiction where you are employed or the terms of your employment agreement, if any); and the Board shall have the exclusive discretion to determine when you are no longer actively providing services for purposes of the PSU Award (including whether you may still be considered to be providing services while on a leave of absence);

(q)no claim or entitlement to compensation or damages shall arise from forfeiture of the PSU Award resulting from your termination of Continuous Service (for any reason whatsoever, whether or not later found to be invalid or in breach of employment laws in the jurisdiction where you are employed, or the terms of your employment agreement, if any);

(r)unless otherwise agreed with the Company in writing, the PSU Award and any shares of Class A Common Stock acquired under the Plan, and the income from and value of same, are not granted as consideration for, or in connection with, any service you may provide as a director of the Company or any Affiliate; and

(s)neither the Company, the Employer or any Affiliate shall be liable for any foreign exchange rate fluctuation between your local currency and the United States Dollar that may affect the value of the PSU Award or the subsequent sale of any shares of Class A Common Stock acquired upon settlement of the PSU Award.

7.Transferability. Except as otherwise provided in the Plan, your PSU Award is not transferable, except by will or by the applicable laws of descent and distribution

8.Corporate Transaction. Your PSU Award is subject to the terms of any agreement governing a Corporate Transaction involving the Company, including, without limitation, a provision for the appointment of a stockholder representative that is authorized to act on your behalf with respect to any escrow, indemnities and any contingent consideration.

9.No Liability for Taxes. As a condition to accepting the PSU Award, you hereby (a) agree to not make any claim against the Company, or any of its Officers, Directors, Employees or Affiliates related to tax liabilities arising from the PSU Award or other Company compensation and (b) acknowledge that you were advised to consult with your own personal tax, financial and other legal advisors regarding the tax consequences of the PSU Award and have either done so or knowingly and voluntarily declined to do so.

10.Severability. If any part of this Agreement or the Plan is declared by any court or governmental authority to be unlawful or invalid, such unlawfulness or invalidity will not invalidate any portion of this Agreement or the Plan not declared to be unlawful or invalid. Any Section of this Agreement (or part of such a Section) so declared to be unlawful or invalid will, if possible, be construed in a manner which will give effect to the terms of such Section or part of a Section to the fullest extent possible while remaining lawful and valid.

11.Waiver. You acknowledge that a waiver by the Company of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach of this Agreement.

12.No Advice Regarding Grant. The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding your participation in the Plan, or your acquisition or sale of the underlying shares of Class A Common Stock.

13.Data Privacy. By signing the Grant Notice or otherwise accepting this Agreement in accordance with the Company’s acceptance procedures, you acknowledge that, in order for the Company to administer the grant of the PSU and any future participation in the Plan, the Company and the Employer must collect, process and transfer certain of your personal data, subject to the GDPR privacy policy for employees, workers and contractors (Europe).

14.Language. You acknowledge that you are sufficiently proficient in the English language, or have consulted with an advisor who is sufficiently proficient in English, so as to allow you to understand the terms and conditions of this Agreement. If you have received this Agreement or any other documents

related to the Plan translated into a language other than English, and if the meaning of the translated version is different than the English version, the English version will control.

15.Governing Law/Venue. This Agreement and any controversy arising out of or relating to this Agreement shall be governed by, and construed in accordance with, the internal laws of the State of Delaware, without regard to conflict of law principles that would result in any application of any law other than the law of the State of Delaware. For purposes of any action, lawsuit or other proceeding brought to enforce this Agreement, relating to it, or arising from it, the parties hereby submit to and consent to the sole and exclusive jurisdiction of the courts of New York County, New York, or the federal courts for the United States for the Southern District of New York, and no other courts where this grant is made and/or to be performed.

16.Insider Trading Restrictions / Market Abuse Law. You may be subject to insider trading restrictions and/or market abuse laws based on the exchange on which the shares of Class A Common Stock are listed and in applicable jurisdictions, including the United States, your country and the designated broker’s country, which may affect your ability to accept, acquire, sell or otherwise dispose of shares of Class A Common Stock, rights to shares of Class A Common Stock (i.e., PSU Awards) or rights linked to the value of the shares of Class A Common Stock under the Plan during such times as you are considered to have “inside information” regarding the Company (as defined by the laws in the applicable jurisdiction(s)). Local insider trading laws and regulations may prohibit the cancellation or amendment of orders you placed before you possessed inside information. Furthermore, you could be prohibited from (i) disclosing the inside information to any third party, which may include fellow employees and (ii) “tipping” third parties or causing them otherwise to buy or sell securities. Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under the Company’s Insider Trading Policy, or any other applicable insider trading policy then in effect. You acknowledge that you are responsible for complying with any applicable restrictions and are encouraged to speak with your personal legal advisor for further details regarding any applicable insider-trading and/or market-abuse laws in your country.

17.Foreign Asset/Account, Exchange Control and Tax Reporting. You may be subject to foreign asset/account, exchange control and/or tax reporting requirements as a result of the acquisition, holding and/or transfer of shares of Class A Common Stock or cash (including dividends and the proceeds arising from the sale of shares of Class A Common Stock) derived from your participation in the Plan in, to and/or from a brokerage/bank account or legal entity located outside your country. The Applicable Laws in your country may require that you report such accounts, assets and balances therein, the value thereof and/or the transactions related thereto to the applicable authorities in such country. You may also be required to repatriate sale proceeds or other funds received as a result of your participation in the Plan to your country through a designated bank or broker within a certain time after receipt. You acknowledge that it is your responsibility to be compliant with such regulations and you are encouraged to consult with your personal legal advisor for any details.

18.Country-Specific Provisions. Notwithstanding any provisions of this Agreement to the contrary, if you reside or are employed outside of the United States, the PSU Award shall be subject to any terms and conditions for your country of residence (and country of employment, if different) set forth in the appendix attached hereto (the “Appendix”). Further, if you transfer residence and/or employment to another country reflected in the Appendix, the terms and conditions for such country will apply to you to the extent the Company determines, in its sole discretion, that the application of such terms and conditions is necessary or advisable for legal or administrative reasons. The Appendix constitutes part of this Agreement.

19.Imposition of Other Requirements. The Company reserves the right to impose other requirements on your participation in the Plan, on the PSU Award and on any shares of Class A Common Stock acquired under the Plan, to the extent the Company determines it is necessary or advisable for legal

or administrative reasons, and to require you to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.

20.Other Documents. You hereby acknowledge receipt of or the right to receive a document providing the information required by Rule 428(b)(1) promulgated under the Securities Act, which includes the Prospectus. In addition, you acknowledge receipt of the Company’s Trading Policy.

21.Questions. If you have questions regarding these or any other terms and conditions applicable to your PSU Award, including a summary of the applicable federal income tax consequences please see the Prospectus.

APPENDIX
TO THE

DATADOG, INC.
2019 EQUITY INCENTIVE PLAN
GLOBAL PSU AWARD AGREEMENT

Capitalized terms used but not defined in this Appendix have the meanings set forth in the Plan, the Grant Notice and/or the Global PSU Award Agreement.

Terms and Conditions

This Appendix includes additional terms and conditions that govern the PSU Award granted to you under the Plan if you are an employee that works or resides outside the U.S. and/or in one of the countries listed below. If you are a citizen or resident of a country other than the one in which you are currently working and/or residing, transfer employment and/or residency to another country after the date of grant, are a consultant, change employment status to a consultant position, or are considered a resident of another country for local law purposes, the Company shall, in its discretion, determine the extent to which the special terms and conditions contained herein shall be applicable to you. References to your Employer shall include any entity that engages your services.

Notifications

This Appendix also includes information regarding exchange controls and certain other issues of which you should be aware with respect to your participation in the Plan. The information is provided solely for your convenience and is based on the securities, exchange control and other laws in effect in the respective countries as of September 2019. Such laws are often complex and change frequently. As a result, the Company strongly recommends that you not rely on the information noted herein as the only source of information relating to the consequences of your participation in the Plan because the information may be out of date by the time you vest in the PSU or sell any shares of Class A Common Stock acquired upon settlement of the vested PSU.

In addition, the information contained in this Appendix is general in nature and may not apply to your particular situation, and the Company is not in a position to assure you of any particular result. Accordingly, you should seek appropriate professional advice as to how the applicable laws in your country may apply to your situation.

Finally, if you are a citizen or resident of a country other than the one in which you are currently residing and/or working, transfer to another country after the date of grant, or are considered a resident of another country for local law purposes, the notifications contained herein may not be applicable to you in the same manner.

AUSTRALIA

Notifications

Tax Conditions. Subdivision 83A-C of the Income Tax Assessment Act 1997 (Cth) applies to the PSU Award granted under the Plan, such that the PSU Award is intended to be subject to deferred taxation.

Securities Law Information. If you acquire shares of Class A Common Stock under the Plan and offer such shares of Class A Common Stock for sale to a person or entity resident in Australia, the offer may be subject to disclosure requirements under Australian law. You should obtain legal advice regarding your disclosure obligations prior to making any such offer.

Exchange Control Information. If you are an Australian resident, exchange control reporting is required for cash transactions exceeding AUD10,000 and international fund transfers. If an Australian

A-1

bank is assisting with the transaction, the bank will file the report on your behalf. If there is no Australian bank involved with the transfer, you will be required to file the report.

AUSTRIA

Notifications

Exchange Control Information. If you hold securities (including shares of Class A Common Stock acquired under the Plan) outside of Austria, you will be required to submit reports to the Austrian National Bank as follows: (i) on a quarterly basis if the value of the shares of Class A Common Stock as of any given quarter meets or exceeds €30,000,000; and (ii) on an annual basis if the value of the shares of Class A Common Stock as of December 31 meets or exceeds €5,000,000. The deadline for filing the quarterly report is the 15th day of the month following the end of the respective quarter. The deadline for filing the annual report is January 31 of the following year.

In addition, if you hold cash (including proceeds from the shares of Class A Common Stock and any cash dividend equivalents or cash dividends) outside of Austria, you may be required to comply with certain exchange control obligations. If the transaction volume of all of your cash accounts abroad meets or exceeds €10,000,000, the movements and balances of all accounts must be reported monthly, as of the last day of the month, on or before the 15th day of the following month, on a prescribed form (Meldungen SI-Forderungen und/oder SI-Verpflichtungen).

BRAZIL

Terms and Conditions

Compliance with the Law. By accepting the Performance Restricted Stock Units, you acknowledge your agreement to comply with applicable Brazilian laws and to pay any and all applicable Tax-Related Items.

Nature of Grant. The following provision supplements Section 6 of the Global PSU Award Agreement:

By accepting the Performance Restricted Stock Units, you agree that (i) you are making an investment decision and (ii) the value of the underlying shares of Class A Common Stock is not fixed and may increase or decrease over the vesting period without compensation to you. You understand that the PSU is granted to you by the Company and does not constitute part of your normal compensation or salary. You further understand that the PSU was granted by the Company as a one-time benefit.

Notifications

Exchange Control Notification. If you hold assets and rights outside Brazil with an aggregate value exceeding USD 100,000, you will be required to prepare and submit to the Central Bank of Brazil an annual declaration of such assets and rights, including: (i) bank deposits; (ii) loans; (iii) financing transactions; (iv) leases; (v) direct investments; (vi) portfolio investments, including shares of Common Stock acquired under the Plan; (vii) financial derivatives investments; and (viii) other investments, including real estate and other assets. Please note that foreign individuals holding Brazilian visas are considered Brazilian residents for purposes of this reporting requirement and must declare at least the assets held abroad that were acquired subsequent to the date of admittance as a resident of Brazil. Individuals holding assets and rights outside Brazil valued at less than USD 100,000 are not required to submit a declaration. Individuals holding assets and rights outside Brazil valued at more than USD 100,000,000 are required to submit a quarterly declaration.

CANADA

Terms and Conditions

A-2

Settlement of Performance Restricted Stock Units. Notwithstanding any terms or conditions of the Plan or the PSU Award Agreement to the contrary, Performance Restricted Stock Units and any dividend equivalents will be settled in shares of Common Stock only, not cash.

Termination. The following provision replaces Section 6(j) of the Global PSU Award Agreement in its entirety:

(j) In the event of the termination of your Continuous Service (whether or not later found to be invalid or in breach of employment laws in the jurisdiction where you are employed or the terms of your employment agreement, if any), unless otherwise provided in the PSU Award Agreement or determined by the Company, your right to vest in the PSU Award under the Plan will terminate effective as of the earlier of (i) the date upon which you cease to provide services, or (ii) the date upon which you receive a notice of termination and will not in either case be extended by any contractual notice period in which you do not actively provide services or any period of pay in lieu of such notice (including, but not limited to Canadian statutory law, regulatory law and/or common law) mandated under employment laws in the jurisdiction where you are employed or the terms of your employment agreement, if any; the Board shall have the exclusive discretion to determine when you are no longer actively providing services for purposes of the PSU Award (including whether you may still be considered to be providing services while on a leave of absence);

The following terms and conditions apply to employees resident in Quebec:

Language. The parties acknowledge that it is their express wish that this Agreement, as well as all documents, notices and legal proceedings entered into, given or instituted pursuant hereto or relating directly or indirectly hereto, be drawn up in English.

Les parties reconnaissent avoir exigé la rédaction en anglais de cette Convention, ainsi que de tous documents, avis et procédures judiciaires, exécutés, donnés ou intentés en vertu de, ou liés directement ou indirectement à, la présente convention.

Data Privacy. This provision supplements Section 13 of the Global PSU Award Agreement:

You hereby authorize the Company or any Affiliate, including the Employer, and any agents or representatives to (i) discuss with and obtain all relevant information from all personnel, professional or non-professional, involved in the administration and operation of the Plan, and (ii) disclose and discuss any and all information relevant to the Plan with their advisors. You further authorize the Company or any Affiliate, including the Employer, and any agents or representatives to record such information and to keep such information in your employee file.

Notifications

Securities Law Information. You are permitted to sell shares of Class A Common Stock acquired under the Plan through the designated broker appointed under the Plan, if any, provided the resale of shares of Class A Common Stock acquired under the Plan takes place outside Canada through the facilities of the exchange on which the shares of Class A Common Stock are then listed.

Foreign Asset/Account Reporting Information. Canadian residents are required to report any foreign specified property held outside Canada (including PSU Awards and shares of Class A Common Stock acquired under the Plan) annually on form T1135 (Foreign Income Verification Statement) if the total cost of the foreign specified property exceeds CAD 100,000 at any time during the year. Thus, if the CAD 100,000 cost threshold is exceeded by other foreign specified property held by the individual, PSU Awards must be reported (generally at a nil cost). For purposes of such reporting, shares of Class A Common Stock acquired under the Plan may be reported at their adjusted cost basis. The adjusted cost basis of a share is generally equal to the fair market value of such share at the time of acquisition; however, if you own other shares of Class A Common Stock (e.g., acquired under other circumstances or at another time), the adjusted cost basis may have to be averaged with the adjusted cost bases of the other shares of Class A Common Stock. You should consult with your personal legal advisor to ensure compliance with applicable reporting obligations.

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CZECH REPUBLIC

Notifications

Exchange Control Notification. You may be required to fulfill certain notification duties in relation to the Performance Restricted Stock Units and the opening and maintenance of a foreign account, including reporting foreign financial assets with a value of CZK 200,000,000 or more. You should consult your personal legal advisor to ensure compliance with the applicable requirements.

DENMARK

Terms and Conditions

Stock Option Act. You acknowledge that you received the Employer Statement in Danish which sets forth additional terms of the Performance Restricted Stock Units, to the extent the Danish Stock Option Act applies.

Notifications

Foreign Asset / Account Reporting Notification. If you establish an account holding cash or shares of Class A Common Stock outside Denmark, you must report the account to the Danish Tax Administration. The form may be obtained from a local bank.

FRANCE

Terms and Conditions

Language Consent. By accepting the PSU Award, you confirm having read and understood the documents related to the PSU Award (the Plan and the PSU Award Agreement) which were provided in the English language. You accept the terms of these documents accordingly.

Consentement à la Langue Utilisée. En acceptant l’attribution de droits sur des actions assujettis à restrictions (PSU Award, l' « Attribution de PSU »), vous confirmez avoir lu et compris les documents relatifs à l’attribution (le Plan et le Contrat d’Attribution de PSU) qui ont été remis en anglais. Vous acceptez les termes de ces documents en connaissance de cause.

Notifications

Tax Information. This PSU Award is not intended to qualify for specific tax and social security treatment applicable to awards granted under Section L. 225-197.1 to L. 225-197.6 of the French Commercial Code, as amended.

Foreign Asset/Account Reporting Information. If you hold cash or shares of Class A Common Stock outside of France or maintain a foreign bank or brokerage account (including accounts that were opened and closed during the tax year), you are required to report such assets and accounts to the French tax authorities on an annual basis on a specified form, together with your income tax return. Failure to complete this reporting can trigger significant penalties.

GERMANY

Notifications

Exchange Control Information. Cross-border payments in excess of EUR 12,500 must be reported monthly to the German Federal Bank (Bundesbank). If you receive a payment in excess of EUR 12,500 in connection with the sale of shares of Class A Common Stock acquired under the Plan or the receipt of any cash dividends, the report must be filed electronically by the fifth day of the month following the

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month in which the payment was received. The form of report (Allgemeines Meldeportal Statistik) can be accessed via the Bundesbank’s website (www.bundesbank.de) and is available in both German and English.

Foreign Asset/Account Reporting Information. German residents holding shares of Class A Common Stock must notify their local tax office of the acquisition of shares of Class A Common Stock when they file their returns for the relevant year if the value of the shares of Class A Common Stock exceeds EUR 150,000 or in the unlikely event that the resident holds shares of Class A Common Stock exceeding 10% of the Company’s share capital.

INDIA

Notifications

Exchange Control Information. Indian residents are required to repatriate the proceeds from the sale of shares of Class A Common Stock to India within specified timeframes. You must retain the foreign inward remittance certificate received from the bank where the foreign currency is deposited in the event that the Reserve Bank of India or the Employer requests proof of repatriation. It is your responsibility to comply with these requirements. Neither the Company nor the Employer will be liable for any fines or penalties resulting from your failure to comply with any Applicable Laws.

Foreign Asset/Account Reporting Information. Indian residents are required to declare any foreign bank accounts and any foreign financial assets (including shares of Class A Common Stock held outside of India) in their annual tax returns. You are responsible for complying with this reporting obligation and should confer with your personal tax advisor to determine your obligations in this regard.

IRELAND

There are no country-specific provisions.

ITALY

Terms and Conditions

Plan Document Acknowledgement. By accepting the Performance Restricted Stock Units, you acknowledge that you have received a copy of the Plan, have reviewed the Plan and the PSU Award Agreement in their entirety and fully understand and accept all provisions of the Plan and the PSU Award Agreement.

You acknowledge that you have read and specifically and expressly approve the following sections of the Global PSU Award Agreement and this Appendix, including: (4) Withholding Obligations; (9) No Liability for Taxes; (10) Severability; (11) Waiver; (13) Data Privacy; (14) Language; (15) Venue; and the Italy country-specific Terms and Conditions of this Appendix.

Notifications

Foreign Asset/Account Reporting Information. If you are an Italian resident and, during any fiscal year, hold investments or financial assets outside of Italy (e.g., cash, shares of Class A Common Stock) which may generate income taxable in Italy (or if you are the beneficial owner of such an investment or asset even if you do not directly hold the investment or asset), you are required to report such investments or assets on your annual tax return for such fiscal year (on UNICO Form, RW Schedule, or on a special form if you are not required to file a tax return).

Foreign Financial Assets Tax. The fair market value of any shares of Common Stock held outside of Italy is subject to a foreign assets tax. Financial assets include shares of Class A Common Stock acquired under the Plan. The taxable amount will be the fair market value of the financial assets assessed at the end of the calendar year. You should consult with your personal tax advisor about the foreign financial assets tax.

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JAPAN

Notifications

Exchange Control Information. Japanese residents acquiring shares of Class A Common Stock valued at more than JPY 100,000,000 in a single transaction must file a Securities Acquisition Report with the Ministry of Finance (“MOF”) through the Bank of Japan within twenty (20) days of the acquisition of the shares.

Foreign Asset/Account Reporting Information. Japanese residents are required to report details of any assets held outside Japan as of December 31st (including shares of Class A Common Stock acquired under the Plan), to the extent such assets have a total net fair market value exceeding JPY 50,000,000. Such report is due by March 15th each year. You should consult your personal legal advisor to ensure compliance with applicable reporting obligations.

NETHERLANDS

There are no country-specific provisions.

NEW ZEALAND

Notifications

Securities Law Information.

Warning

This is an offer of rights to receive shares of Class A Common Stock underlying the Performance Restricted Stock Units. Performance Restricted Stock Units give you a stake in the ownership of the Company. You may receive a return if dividends are paid on the shares of Class A Common Stock. Shares of Class A Common Stock are quoted on the Nasdaq. This means you may be able to sell them on the Nasdaq if there are interested buyers. You may get less than invested. The price will depend on the demand for the shares of Class A Common Stock

If the Company runs into financial difficulties and is wound up, you will be paid only after all creditors and holders of preferred shares have been paid. You may lose some or all of your investment.

New Zealand law normally requires people who offer financial products to give information to investors before they invest. This information is designed to help investors to make an informed decision.

The usual rules do not apply to this offer because it is made under an employee share scheme. As a result, you may not be given all the information usually required. You will also have fewer other legal protections for this investment.

In compliance with applicable New Zealand securities laws, you are entitled to receive, in electronic or other form and free of cost, copies of the Company’s latest annual report, relevant financial statements and the auditor’s report on said financial statements (if any). You may obtain copies of such documents on written request to the Company at attn: General Counsel, Datadog, Inc., 620 8th Avenue, New York, New York 10018, United States of America. Filings made with the U.S. SEC also may be found at http://www.sec.gov. You are advised to ask questions, read all documents carefully, and seek independent financial advice before committing yourself.

NORWAY

There are no country-specific provisions.

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POLAND

Notifications

Exchange Control Information. Polish residents holding foreign securities (including shares of Class A Common Stock) abroad must report information to the National Bank of Poland on transactions and balances of the securities deposited in such accounts if the value of such transactions or balances (calculated individually or together with other assets or liabilities held abroad) exceeds PLN 7,000,000. If required, the reports are due on a quarterly basis. Polish residents are also required to transfer funds through a bank account or payment institution in Poland if the transferred amount in any single transaction exceeds a specified threshold (currently EUR 15,000, unless the transfer of funds is considered to be connected with the business activity of an entrepreneur, in which case a lower threshold may apply). Further, upon the request of a Polish bank, Polish residents are required to inform the bank about all foreign exchange transactions performed through such bank. In addition, Polish residents are required to store documents connected with any foreign exchange transaction for a period of 5 years from the end of the year in which such transaction was made. Penalties may apply for failure to comply with exchange control requirements.

ROMANIA

Notifications

Exchange Control Information. Any transfer of funds exceeding €15,000 (whether made through a single transfer or a series of transfers) must be reported to the National Office for Prevention and Control of Money Laundering on specific forms by the relevant bank of financial institution. If you deposit proceeds from the sale of Class A Common Stock in a bank account in Romania, you may have to provide the Romanian bank through which the operations are effected with the appropriate documenting regarding receipt of the funds. You should consult with your personal legal advisor to determine whether you will be required to submit such documentation to the Romanian bank.

SINGAPORE

Terms and Conditions

Restriction on Sale of Shares. Shares of Class A Common Stock acquired under the Plan prior to the six (6) month anniversary of the date of grant may not be sold or otherwise offered for sale in Singapore, unless such sale or offer is made pursuant to the exemptions under Part XIII Division (1) Subdivision (4) (other than section 280) of the Singapore Securities and Futures Act (Chapter 289, 2006 Ed.) (“SFA”) or pursuant to, and in accordance with the conditions of, any other applicable provision(s) of the SFA.

Notifications

Securities Law Information. The PSU Award is being granted to you pursuant to the “Qualifying Person” exemption under section 273(1)(f) of the SFA. The Plan has not been, nor will it be, lodged or registered as a prospectus with the Monetary Authority of Singapore.

Chief Executive Officer and Director Notification Obligation. You acknowledge that if you are the Chief Executive Officer (“CEO”) a director, associate director or shadow director of a Singapore Subsidiary, you are subject to certain notification requirements under the Singapore Companies Act. Among these requirements is an obligation to notify the Singapore Subsidiary in writing when you receive an interest (e.g., PSU Awards or shares of Class A Common Stock) in the Company or any Subsidiary within two business days of (i) its acquisition or disposal, (ii) any change in previously disclosed interest (e.g., when the shares of Class A Common Stock are sold), or (iii) becoming a CEO, director, associate director or shadow director.

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SOUTH KOREA

Notifications

Foreign Asset/Account Reporting Information. Korean residents must declare all foreign financial accounts (e.g., non-Korean bank accounts, brokerage accounts, etc.) to the Korean tax authority and file a report with respect to such accounts if the value of such accounts exceeds KRW 500 million (or an equivalent amount in foreign currency). You should consult with your personal tax advisor to determine how to value your foreign accounts for purposes of this reporting requirement and whether you are required to file a report with respect to such accounts.

SPAIN

Terms and Conditions

Nature of Grant. The following provision supplements Section 6 of the Global PSU Award Agreement:

In accepting the PSU, you consent to participate in the Plan and acknowledge that the Plan was made available to you and that you read a copy of the Plan and you consent to the terms and conditions of the PSU Award Agreement and acknowledge having received and read a copy of the PSU Award Agreement.

You understand and agree that, as a condition of the PSU grant, your termination of employment for any reason (including for the reasons listed below) will automatically result in the forfeiture of the PSU and loss of the shares of Class A Common Stock that may have been granted to you and that have not vested as of the date of your termination of employment.

In particular, you understand and agree that the PSU will be forfeited without entitlement to the underlying shares of Class A Common Stock or to any amount as indemnification in the event of your termination of employment prior to vesting by reason of, including, but not limited to: resignation, disciplinary dismissal adjudged to be with cause, disciplinary dismissal adjudged or recognized to be without good cause (i.e., subject to a “despido improcedente”), individual or collective layoff on objective grounds, adjudged or recognized to be with or without good cause, material modification of the terms of employment under Article 41 of the Workers’ Statute, relocation under Article 40 of the Workers’ Statute, Article 50 of the Workers’ Statute, unilateral withdrawal by the Company, and under Article 10.3 of Royal Decree 1382/1985.

Furthermore, you understand that the Company has unilaterally, gratuitously and discretionally decided to grant the Performance Restricted Stock Units under the Plan to employees of the Company. The decision is a limited decision that is entered into upon the express assumption and condition that any grant will not economically or otherwise bind the Company on an ongoing basis. Consequently, you understand that the PSU is granted on the assumption and condition that the PSU and the shares of Class A Common Stock underlying the PSU shall not become a part of any employment or service contract with the PSU and shall not be considered a mandatory benefit, salary for any purposes (including severance compensation) or any other right whatsoever. In addition, you understand that the PSU would not be granted to you but for the assumptions and conditions referred to above; thus, you acknowledge and freely accept that should any or all of the assumptions be mistaken or should any of the conditions not be met for any reason, then any PSU granted to you shall be null and void.

Notifications

Securities Law Information. The Performance Restricted Stock Units described in the PSU Award Agreement do not qualify as a security under Spanish regulations. No “offer of securities to the public,” within the meaning of Spanish law, has taken place or will take place in the Spanish territory. The PSU Award Agreement and any other documents evidencing the Performance Restricted Stock Units have not

A-8

been, nor will they be, registered with the Comisión Nacional del Mercado de Valores (Spanish Securities Exchange Commission), and none of these documents constitutes a public offering prospectus.

Exchange Control Information. The acquisition, ownership and sale of shares of Class A Common Stock under the Plan must be declared for statistical purposes to the Spanish Dirección General de Comercio e Inversiones (the “DGCI”), the Bureau for Commerce and Investments, which is a department of the Ministry of Economy and Competitiveness. You also must declare ownership of any shares of Class A Common Stock as of December 31 of the prior year with the Directorate of Foreign Transactions each January. In addition, if the acquisition or sale of any shares of Class A Common Stock exceeds certain thresholds, it must be declared to the DGCI within 1 month after the sale.

When receiving foreign currency payments derived from the ownership of the Performance Restricted Stock Units or shares of Class A Common Stock (i.e., sale proceeds), you must inform the financial institution receiving the payment of the basis upon which such payment is made if the payment exceeds €50,000. You will need to provide the following information: (i) your name, address, and fiscal identification number; (ii) the name and corporate domicile of the Company; (iii) the amount of the payment and the currency used; (iv) the country of origin; (v) the reasons for the payment; and (vi) further information that may be required.

In addition, you may be required to declare electronically to the Bank of Spain any foreign accounts (including brokerage accounts held abroad), any foreign instruments (including the Performance Restricted Stock Units or any shares of Class A Common Stock acquired under the Plan) and any transactions with non-Spanish residents (including any payments of shares of Class A Common Stock made to you by the Company) depending on the value of such accounts and instruments and the amount of the transactions during the relevant year as of December 31 of the relevant year.

SWEDEN

There are no country-specific provisions.

SWITZERLAND

Notifications

Securities Law Information. The PSU grant is not intended to be publicly offered in or from Switzerland. Because it is considered a private offering, it is not subject to securities registration in Switzerland. Neither this document nor any other materials relating to the Performance Restricted Stock Units (i) constitutes a prospectus as such term is understood pursuant to article 652a of the Swiss Code of Obligations, (ii) may be publicly distributed nor otherwise made publicly available in Switzerland or (iii) has been or will be filed with, approved or supervised by any Swiss regulatory authority, including the Swiss Financial Market Supervisory Authority (“FINMA”).

UNITED ARAB EMIRATES

Terms and Conditions

Nature of Grant. The following provision supplements Section 6 of the Global PSU Award Agreement:

You acknowledge that the Performance Restricted Stock Units and related benefits do not constitute a component of your “wages” for any legal purpose. Therefore, the Performance Restricted Stock Units and related benefits will not be included and/or considered for purposes of calculating any and all labor benefits, such as social insurance contributions and/or any other labor-related amounts which may be payable.

Notifications

A-9

Securities Law Notification. Performance Restricted Stock Units are being offered only to eligible employees of the Company and are in the nature of providing equity incentives to employees in the United Arab Emirates. Any award agreement related to the PSU Award is intended for distribution only to such eligible employees and must not be delivered to, or relied on by, any other person. Prospective acquirers of the securities offered should conduct their own due diligence on the securities.

United Arab Emirates securities or financial/economic authorities have no responsibility for reviewing or verifying any award documentation and have not approved the award documentation nor taken steps to verify the information set out therein, and thus, are not responsible for the content.

You should, as a prospective stockholder, conduct your own due diligence on the securities. If you do not understand the contents of the award documentation, you should consult an authorized financial advisor.

UNITED KINGDOM

Terms and Conditions

Withholding Obligations. This provision supplements Section 4 of the Global PSU Award Agreement:

Without limitation to this Section 4, you hereby agree that you are liable for any Tax-Related Items related to your participation in the Plan and hereby covenants to pay such Tax-Related Items, as and when requested by the Company or (if different) the Employer or by Her Majesty’s Revenue & Customs (“HMRC”) (or any other tax authority or any other relevant authority). You also hereby agree to indemnify and keep indemnified the Company and (if different) the Employer against any Tax-Related Items that they are required to pay or withhold or have paid or will pay to HMRC (or any other tax authority or any other relevant authority) on your behalf.

Notwithstanding the indemnification provision in this Section 4, if you are a director or executive officer of the Company (within the meaning of Section 13(k) of the Exchange Act), the amount of any income tax due but not collected from or paid by you within ninety (90) days of the end of the U.K. tax year in which an event giving rise to the Withholding Obligation occurs may constitute an additional benefit to you on which additional income tax and National Insurance Contributions (“NICs”) may be payable. You will be responsible for reporting and paying any income tax due on this additional benefit directly to Her Majesty’s Revenue and Customs under the self-assessment regime and for reimbursing the Company and/or the Employer for the value of any employee NICs due on this additional benefit, which the Company and/or the Employer may recover at any time thereafter by any of the means referred to in this Agreement.

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Document

Certain information has been excluded from this agreement (indicated by “[***]”) because such information is both not material and the type that the registrant customarily and actually treats as private or confidential.

Redacted – Execution Counterpart

LEASE

FC EIGHTH AVE., LLC
as Landlord,

to

DATADOG, INC.,
as Tenant

Date: as of July 28, 2022

Premises:

Entire 29th, 30th, 36th, 37th, 45th, 46th, 47th, 48th, 49th and 50th floors,
a portion of the 51st floor, Tenant’s Roof Top Space and certain space
on the ground level of the building located at
620 Eighth Avenue
New York, New York

Table of Contents


ARTICLE 1 DEFINITIONS; PREMISES; TERM			1
ARTICLE 2 COMMENCEMENT OF TERM; ACCESS TO AND POSSESSION OF DEMISED PREMISES; LANDLORD'S WORK			19
ARTICLE 3 RENT			28
ARTICLE 4 TAXES, OPERATING EXPENSE PAYMENTS, ADJUSTMENT OF RENT, ESCALATION			33
ARTICLE 5 USE			55
ARTICLE 6 SERVICES AND EQUIPMENT			62
ARTICLE 7 ELECTRIC			71
ARTICLE 8 ASSIGNMENT, SUBLETTING, MORTGAGING			78
ARTICLE 9 SUBORDINATION, NON DISTURBANCE, SUPERIOR INSTRUMENTS			95
ARTICLE 10 ENTRY; RIGHT TO CHANGE PUBLIC PORTIONS OF THE BUILDING			101
ARTICLE 11 LAWS, ORDINANCES, REQUIREMENTS OF PUBLIC AUTHORITIES			103
ARTICLE 12 REPAIRS			105
ARTICLE 13 TENANT CHANGES; FIXTURES			106
ARTICLE 14 RIGHT TO PERFORM OBLIGATIONS			120
ARTICLE 15 NO LIABILITY OF LANDLORD; FORCE MAJEURE			121
ARTICLE 16 INSURANCE; INDEMNIFICATION			123
ARTICLE 17 DAMAGE BY FIRE OR OTHER CAUSE			129
ARTICLE 18 CONDEMNATION			132
ARTICLE 19 BANKRUPTCY			134
ARTICLE 20 DEFAULTS AND REMEDIES; WAIVER OF REDEMPTION			135
ARTICLE 21 COVENANT OF QUIET ENJOYMENT			139
ARTICLE 22 SURRENDER OF PREMISES			139
ARTICLE 23 DEFINITION OF LANDLORD			141
ARTICLE 24 NOTICES			141
ARTICLE 25 ARBITRATION			142
ARTICLE 26 RULES AND REGULATIONS			144
ARTICLE 27 BROKER			145
ARTICLE 28 ZONING RIGHTS			145
ARTICLE 29 WINDOW CLEANING			146
ARTICLE 30 CONSENTS; ESTOPPEL CERTIFICATES			146
ARTICLE 31 MISCELLANEOUS			147
ARTICLE 32 SUCCESSORS AND ASSIGNS			152
ARTICLE 33 HAZARDOUS MATERIALS			152
ARTICLE 34 CONDOMINIUM			153


ARTICLE 35 LANDLORD'S CONTRIBUTION			155
ARTICLE 36 SATELLITE ANTENNA			158
ARTICLE 37[***]			161
ARTICLE 38 NAME OF BUILDING; SIGNAGE			161
ARTICLE 39 MESSAGE CENTER			162
ARTICLE 40 MEMORANDUM OF LEASE			163
ARTICLE 41 EMERGENCY POWER			164
ARTICLE 42 TENANT'S ROOF TOP SPACE			166
ARTICLE 43 [***]			173
ARTICLE 44 [***]			173

Certain schedules and exhibits to this exhibit have been omitted pursuant to Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule and/or exhibit will be furnished to the SEC upon request

TABLE OF CONTENTS - EXHIBITS

EXHIBIT A FLOOR PLANS FOR THE EXECUTION DATE INITIAL OFFICE SPACE

EXHIBIT B DESCRIPTION OF LAND

EXHIBIT C RENTABLE SQUARE FEET OF OFFICE FLOORS AND TENANT’S PROPORTIONATE SHARE FOR EACH PREMISES PORTION

EXHIBIT D RESERVED

EXHIBIT E DESIGN GUIDELINES

EXHIBIT F TENANT’S ROOF TOP SPACE

EXHIBIT G FLOOR PLANS FOR THE 51ST FLOOR SPACE

EXHIBIT H FLOOR PLANS FOR THE GROUND FLOOR SPACE (AND ACCESS POINTS THERETO)

EXHIBIT 2.02A LANDLORD’S COMMENCEMENT DATE WORK

EXHIBIT 2.07 PRIVATE SHUTTLE ELEVATOR WORK AREAS

EXHIBIT 4.06C FORM OF CONFIDENTIALITY AGREEMENT

EXHIBIT 5.07 FLOOR LOAD

EXHIBIT 6.01A(i) ELEVATOR SPECIFICATIONS

EXHIBIT 6.01A(ii) BASE HVAC SPECIFICATIONS

EXHIBIT 6.01A(iii) CLEANING SPECIFICATIONS

EXHIBIT 6.01A(v) ACCESS CONTROL STANDARDS

EXHIBIT 6.03A SHAFT SPACE LOCATION FOR CONDUIT

EXHIBIT 8.03 FORM OF ASSIGNMENT AND ASSUMPTION OF LEASE

EXHIBIT 8.05E-1 FORM OF CONSENT TO ASSIGNMENT

EXHIBIT 8.05E-2 FORM OF CONSENT TO SUBLEASE

EXHIBIT 8.12 FORM OF SNDA FOR SUBTENANTS

EXHIBIT 9.02A-1 FORM OF SUPERIOR LESSOR SNDA

EXHIBIT 9.02A-2 FORM OF SUPERIOR MORTGAGEE SNDA

EXHIBIT 9.02A-3 FORM OF BOARD OF MANAGER SNDA

EXHIBIT 9.02A-4 FORM OF FC BOARD OF MANAGER SNDA

EXHIBIT 13.03 LIST OF APPROVED CONTRACTORS

EXHIBIT 13.06B CONSTRUCTION RULES AND REGULATIONS

EXHIBIT 13.06D LOCATIONS FOR PROPOSED SPECIALTY BATHROOM WORK

EXHIBIT 26.01 RULES AND REGULATIONS

EXHIBIT 36.01 ANTENNA INSTALLATION REQUIREMENTS

EXHIBIT 38.02A EIGHTH AVENUE PYLON SIGNAGE

EXHIBIT 38.02B NORTH CONCIERGE DESK SIGNAGE

EXHIBIT 40.01 FORM OF MEMORANDUM OF LEASE

EXHIBIT 42.03E TENANT’S ROOF TOP SPACE PLANTER REQUIREMENTS

INDENTURE OF LEASE, dated as of this 28th day of Jul, 2022 between FC EIGHTH AVE., LLC, a Delaware limited liability company, having an office at c/o Brookfield Properties, 250 Vesey Street, 12th floor, New York, New York 102811 (subject to the terms hereof, “Landlord”) and DATADOG, INC., a Delaware corporation, having offices at 620 Eighth Ave., 45th Floor, New York, New York 10018 (“Original Tenant”).

W I T N E S E T H

In consideration of the mutual covenants and conditions herein contained, Landlord and Tenant hereby covenant and agree as follows:

ARTICLE 1

DEFINITIONS; PREMISES; TERM

Article 1A. Defined Terms. As used in this Lease, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):

“42DP” shall mean 42nd St. Development Project, Inc., a subsidiary of New York State Urban Development Corporation d/b/a Empire State Development Corporation, a corporate governmental agency of the State of New York constituting a political subdivision and public benefit corporation, having an office at 633 Third Avenue, 33rd floor, New York, New York 10017.

“51st Floor Space” shall mean a portion of the Special FC Limited Area located on a portion of the 51st floor of the Building as shown on Exhibit G annexed hereto and made a part hereof; it being agreed, however, if there is a 51st Floor Space CofO Change Denial and Tenant makes the 51st Floor Shuttle Elevator Area Election, then the 51st Floor Space shall be limited to the portion of the 51st floor of the Building in which the Private Shuttle Elevator therein is located, which the parties agree shall be deemed to contain fifty (50) RSF (the “51st Floor Shuttle Area Space”).

“51st Floor Space Shuttle Elevator Area Election” shall mean, if there is a 51st Floor Space CofO Change Denial, the election (or deemed election) made by Tenant, subject to the last sentence of Section 2.02B hereof, to only utilize the 51st Floor Shuttle Area Space, which election must be given not later than one hundred twenty (120) days following Landlord giving Tenant notice that there has been a 51st Floor CofO Change Denial.

“51st Floor Space Storage Use Election” shall mean, if there is a 51st Floor Space CofO Change Denial, the election made by Tenant to use the 51st Floor Space for storage purposes as contemplated by the current certificate of occupancy for the Building, which election must be given not later than one hundred twenty (120) days following Landlord giving Tenant notice that there has been a 51st Floor CofO Change Denial; it being agreed that if Tenant does not timely give such election, Tenant shall be deemed to have made the 51st Floor Shuttle Elevator Area Election.

“51st Floor Space Use Change Election” shall mean, as applicable, a 51st Floor Space Shuttle Elevator Area Election or a 51st Floor Space Storage Use Election.

“AAA” shall mean the American Arbitration Association or any successor thereto.

“Actual Damages” shall mean actual, direct damages of Tenant or Landlord (as the case may be) but in no event to include (i) consequential, indirect or punitive damages or (ii) damages on account of loss of business, inconvenience or annoyance.

“ADA” shall mean the Americans with Disabilities Act, Title III, 42 U.S.C.S. §§ 12181-12189 and any amendments thereto.

“Additional Rent” shall mean any and all sums and payments that this Lease requires Tenant to pay Landlord or any third party to which Landlord might be liable as required under this Lease whether or not expressly designated as Additional Rent, except Fixed Rent and RTS Fixed Rent.

“Affiliate” shall mean with respect to any Person, any Person who or which directly or indirectly controls, is controlled by or is under common control with such Person. The term “Affiliated” shall have the correlative meaning.

“alterations” shall mean every alteration, installation, improvement, addition, removal, demolition, decoration or other physical change.

“Approved Maintenance Personnel” means without limiting any other requirements of this Lease, a service provider that meets the following qualifications: (A) neither such service provider nor the individual(s) performing the service in question are a Prohibited Entity and (B) such service provider must either be (i) if the service involved involves particular original equipment manufacturer (“OEM”) equipment or components, a party on such OEM manufacturer’s approved list to perform such service or otherwise approved in writing by such manufacturer, (ii) a factory service person of the manufacturer of the relevant equipment or component (if applicable) or (iii) approved by Landlord (such approval not to be unreasonably withheld).

“Bankruptcy Code” shall mean the United States Bankruptcy Code, 11 U.S.C. §101 et. seq., as amended.

“Bankruptcy Event” shall mean any or all of the following events: there shall be filed by or against Tenant in any court pursuant to any statute either of the United States or of any State a petition in bankruptcy, or there shall be commenced a case under the Bankruptcy Code by or against Tenant, or a petition filed for insolvency or for reorganization or for the appointment of a receiver or trustee of all or a portion of Tenant’s property, and, in any case (other than a voluntary filing by Tenant), within ninety (90) days thereof Tenant fails to secure a discharge thereof, or if Tenant makes a general assignment for the benefit of creditors, or petitions for or enters into an arrangement with its creditors.

“Base HVAC System” shall mean the HVAC system for the Building, including the Building cooling towers, pumps and associated risers and equipment, ventilation systems and heating systems providing air-conditioning, ventilation and heat for the Premises, the Building common Areas and other leased or leasable space in the Building; it being agreed that any supplemental HVAC systems in the Building by or for any individual tenants (including Tenant) or occupants of the Building shall not be part of the Base HVAC System.

“Base Systems” shall mean all utilities, systems and fixtures (including, without limitation, all plumbing systems, heating systems, all electrical branches and systems, the Base HVAC System, and all fire safety/life safety systems) serving all or any portion of the Unit other than the NYTC Limited Common Elements (as defined in the Condominium Documents); it being agreed that in no event shall any Tenant Change, the RTS Build-out Work and/or the Private Shuttle Elevator be part of any of the Base Systems.

“BID” shall mean a Business Improvement District or any successor in function.

“Broker” shall mean CBRE Inc.

“Building” shall mean the building known as The New York Times Building located on the Land.

“Building common areas” shall mean collectively all of the common facilities in the Building and the Land designed and intended for use by tenants or other occupants in the Building in common with Landlord, the other Unit Owners and each other, including, without limitation, elevators, fire stairs, mechanical areas and telephone and electrical closets and riser shafts, walkways, truck docks, plazas, courts, public areas within the property line of the Building, service areas, lobbies, landscaped and garden areas and all other common and service areas of the Building; it being agreed that no portion of Tenant’s Roof Top Space or the Private Shuttle Elevator Areas shall be deemed to be a Building common area.

“Building Service Employees Union Contract” shall mean the contract from time to time in effect between Locals 32B and 32J of the Building Service Employees Union AFL-CIO (or any successor thereto) and the Real Estate Advisory Board of New York, Inc. (or any successor thereto).

“Business Days” shall mean Monday through Friday exclusive of Holidays.

“Business Hours” shall mean 8:00 A.M. to 6:00 P.M. on Business Days or such additional (but not lesser) hours of operations that Landlord may designate for the Unit from time to time.

“City” shall mean the City of New York, both geographically and as a governmental entity, as the context requires.

“Commencement Date” shall mean the following, as applicable:

(A) with respect to any Office Space Portion (except for the 51st Floor Space) in which Landlord is performing any Landlord’s Commencement Date Work therein, the date which is the earlier to occur of (i) the date on which Landlord’s Commencement Date Work for such Office Space Portion is Substantially Completed (or deemed Substantially Completed) and (ii) the date Tenant, or anyone claiming by, under or through Tenant, first takes possession of such Office Space Portion or any part thereof, for any purpose (other than the access as permitted under Section 2.01B hereof),

(B) with respect to the 51st Floor Space, the date which is the earlier to occur of (i) the date on which Landlord’s Commencement Date Work therein is Substantially Completed (or deemed Substantially Completed) and (ii) the date Tenant, or anyone claiming by, under or through Tenant, first takes possession of the 51st Floor Space or any part thereof, for any purpose (other than the access and Tenant Changes therein, in each case, as permitted under Section 2.01B hereof); it being agreed, with respect to the 51st Floor Space, that, except as hereinafter provided, Landlord’s Commencement Date Work therefor shall also include (1) the certificate of occupancy for the Building has been amended to allow for the 51st Floor Space to be used for office purposes (the “51st Floor Space CofO Change”); it being agreed that the costs incurred by Landlord to obtain the 51st Floor CofO Change shall be the responsibility Landlord; provided, however, in the event of a 51st Floor Space CofO Change Denial and Tenant electing, as hereinafter provided, to challenge the 51st Floor Space CofO Change Denial and seek to obtain the 51st Floor Space CofO Change, Tenant shall be responsible for all costs and expenses of pursing such challenge and any costs incurred by Tenant with respect thereto (including,

reimbursing Landlord for the reasonable costs incurred by Landlord in cooperating in any such challenge in order to get the 51st Floor Space CofO Change approved) in seeking to obtain the 51st Floor CofO Change; provided, however, if Tenant is successful in obtaining the 51st Floor Space CofO Change, then Tenant shall not be obligated to reimburse Landlord for any of Landlord’s costs as aforesaid and Landlord shall, within thirty (30) days after receipt of demand therefor (together with reasonable supporting documentation), reimburse Tenant for fifty percent (50%) of Tenant’s reasonable costs and expenses incurred by Tenant in connection therewith and (2) Substantial Completion (or deemed Substantial Completion) of the Private Shuttle Elevator Work.

(D) with respect to the Ground Floor Space, the date which is the earlier to occur (i) the date on which Landlord’s Commencement Date Work therein is Substantially Completed (or deemed Substantially Completed) and (ii) the date Tenant, or anyone claiming by, under or through Tenant, first takes possession of the Ground Floor Space or any part thereof, for any purpose (other than the access as permitted under Section 2.01B hereof); it being agreed with respect to the Ground Floor Space, Landlord’s Commencement Date Work shall also include (at Landlord’s cost and expense) that the certificate of occupancy for the Building has been amended to allow for the Ground Floor Space to be used for storage purposes.

Notwithstanding the foregoing, it is acknowledged and agreed that: (a) with respect to the Office Space Portions located on the Execution Date Occupied Floors, (1) Tenant is currently in occupancy thereof pursuant to one or more subleases or sub-subleases (collectively, the “Existing Subleases”), (2) no Landlord’s Commencement Date Work is required therefor and (3) the Commencement Date for the Execution Date Occupied Floors shall be the earlier to occur of (x) January 1, 2024 and (y) the day immediately following the expiration of the term of the applicable Existing Subleases; and (b) if (1) Landlord does not enter into a short term extension of the term of the lease for the current tenant/occupant of the 47th, 48th and 50th floors of the Building (the “47-48-50 Short Term Extension”) and (2) [***]. For the avoidance of doubt, in no event shall completion of the Private Shuttle Elevator Work or any other Landlord’s Supplemental Work be a condition to the occurrence of the Commencement Dates for any portion of the Demised Premises, except that, solely for the 51st Floor Space, Substantial Completion (or deemed Substantial Completion) of the Private Shuttle Elevator Work shall be a condition for the occurrence of the Commencement Date therefor.

“Common Elements” shall have the meaning set forth in the Condominium Declaration (it being acknowledged, however, that “Common Elements” shall not include any NYTC Limited Common Elements or any FC Limited Common Elements (as defined in the Condominium Declaration)) but shall expressly include the Common Elements Leaseable Space (as defined in the Unit Ground Lease).

“Comparable Buildings” shall mean first class office buildings of comparable size located in the area bounded by 34th Street to 60th Street, from 1st Avenue to 10th Avenue, City of New York.

“Competitively Bid” shall mean the process of having bid in a commercially reasonable manner to at least three (3) reputable, unrelated entities on an arm’s length basis.

“Condominium” shall mean that certain condominium known as The New York Times Building Condominium formed or to be formed pursuant to the Condominium Declaration.

“Condominium Act” shall mean Article 9-B of the Real Property Law of the State of New York or any statute enacted in lieu thereof.

“Condominium Board” shall mean, as applicable, the Board of Managers, the FC Board of Managers and/or the NYTC Board of Managers (as such terms are each defined in the Condominium Declaration), and, collectively, the “Condominium Boards”.

“Condominium By-Laws” shall mean the by-laws annexed to the Condominium Declaration, together with (but subject to the applicable provisions of this Lease) all amendments, modifications and supplements thereto and/or replacements thereof.

“Condominium Declaration” shall mean the instrument by which Landlord’s leasehold estate in the Real Property is subjected to the Condominium Act, together with (but subject to the applicable provisions of this Lease) all amendments, modifications and supplements thereto and/or replacements thereof.

“Condominium Documents” shall mean, collectively, the Condominium Declaration, the Condominium By-Laws and any other documents executed or recorded in connection with subjecting the Real Property to the Condominium Act, together with (but subject to the applicable provisions of this Lease) all amendments, modifications and supplements thereto and/or restatements thereof.

“Control” or “control” shall mean either (A) ownership of fifty percent (50%) or more of the outstanding voting stock of a corporation or other majority equity and control interest if not a corporation or (B) ownership of twenty-five (25%) percent or more of the outstanding voting stock of a corporation or other majority equity and beneficial interest if not a corporation and the possession of power to direct or cause the direction of the management and policy of such corporation or other entity, whether through the ownership of voting securities, by statute or according to the provisions of a contract or other agreement.

“CPI” shall mean “The Consumer Price Index (New Series) (Base Period 1982-84=100) (all items for all urban consumers for New York-Northeastern New Jersey (CPI-U) Area)” as published by the Bureau of Labor Statistics of the United States Department of Labor or if the same is discontinued, a replacement index published by the Department of Labor or other applicable Governmental Authority, appropriately adjusted. In the event that the CPI is converted to a different standard reference base or otherwise revised, the determination of those increases provided for herein to be made with reference to the CPI shall be made with the use of such conversion factor, formula or table for converting the CPI as may be published by the Bureau of Labor Statistics or, if said Bureau shall not publish the same, then with the use of such conversion factor, formula or table as may be published by Prentice Hall, Inc., or any other nationally recognized publisher of similar statistical information reasonably selected by Landlord and reasonably approved by Tenant. If the CPI ceases to be published, and there is no successor thereto, such other index as Landlord and Tenant shall agree upon in writing shall be substituted for the CPI. If Landlord and Tenant are unable to agree as to such substituted index, such matter shall be resolved by arbitration in accordance with the provisions of Section 25.01 hereof. Pending the resolution of such dispute, CPI-based increases provided for herein shall be determined in accordance with the substituted index selected by Landlord; subject to adjustment when finally determined with the appropriate party being entitled to a prompt refund from the other party of any overpayment as a result of the use of such index selected by Landlord together with interest at the Prime Rate from the date of such overpayment until the date so repaid to the appropriate party.

“Demised Premises” or “Premises” shall mean the Initial Space, taking into account any reduction or increase in or expansion of the space comprising the Demised Premises pursuant to the terms hereof.

“Design Guidelines” shall mean the guidelines for any Tenant Change as set forth on Exhibit E annexed hereto and made a part hereof, as the same may (subject to the provisions of this Lease) be modified from time to time.

“DUO” shall mean the Design, Use and Operating Requirements which are attached to the Unit Ground Lease as Exhibits E-1 through E-7, which Exhibits are incorporated herein by reference.

“EDC” shall mean the New York City Economic Development Corporation or any successor thereto.

“Electrical Capacity” shall mean the Office Space Electrical Capacity, the RTS Electrical Capacity and the Ground Floor Space Electrical Capacity, as the context may require.

“Execution Date” shall mean the date upon which this Lease is fully executed and unconditionally delivered by both parties hereto as set forth in Section 31.16 hereof.

“Execution Date Encumbered Office Space” shall mean the entire 29th, 30th, 37th, 47th, 48th, and 50th floors of the Building.

“Execution Date Initial Office Space” shall mean the entire 29th, 30th, 36th, 37th, 45th, 46th, 47th, 48th, 49th, and 50th floors of the Building and, subject to the terms hereof, the 51st Floor Space, the rentable areas of which are shown on the Floor Plans and Exhibit C, as the Execution Date Initial Office Space may be reduced as provided in Section 1.03 hereof, and Tenant’s Percentages for each of which during the Initial Term are listed on Exhibit C annexed hereto and made a part hereof.

“Execution Date Occupied Floors” shall mean the entire 45th, 46th and 49th floors of the Building.

“Expiration Date” shall mean the Stated Expiration Date [***] or the date upon which the Term of this Lease shall otherwise terminate sooner pursuant to any of the terms of this Lease or pursuant to law.

“FF&E Work” shall refer to the work which Tenant shall be responsible to perform and to pay for at Tenant’s sole cost and expense (it being agreed that the cost of which work shall not be subject to reimbursement from Landlord’s Contribution) to provide furniture, fixtures and equipment for the Demised Premises, including, without limitation, telephones, computers, monitors, data center equipment, networking equipment, movable work stations, office equipment, radios and related equipment, and/or audio visual equipment in connection with Tenant’s preparation of the Demised Premises for Tenant’s initial occupancy thereof.

“Floor Plans” shall mean the floor plans for the Initial Space annexed hereto as Exhibits A, G and H and made a part hereof.

“Force Majeure” shall mean any delays resulting from any causes beyond Landlord’s or Tenant’s reasonable control, as the case may be, including, without limitation, governmental regulation, governmental restriction, strike, labor dispute, riot, inability to obtain materials or supplies (exclusive of delays inherent in ordering Long Lead Items except as otherwise expressly provided herein), acts of God, war, terrorist or bio-chemical attack, fire or

other casualty, governmental preemption of priorities or other controls or restrictions in connection with a national or other public emergency or shortages of fuel, supplies or labor resulting therefrom, weather conditions that render the performance of construction unsafe or impracticable, or any actual or threatened health emergency, including, but not limited to, epidemics, pandemics (including, without limitation, COVID-19), famine, disease, plague, quarantine, and other health risks, including, but not limited to, health risks declared or recognized by the Centers for Disease Control, the World Health Organization, any governmental authority or similar body having jurisdiction and any order by any federal, state or local governmental authority having jurisdiction in connection with any such health emergency described above (including work stoppages on account thereof) and other like circumstances. Under no circumstances shall the non-payment of money or a failure attributable to a lack of funds be deemed to be (or to have caused) an event of Force Majeure nor shall weather conditions which are reasonably anticipatable as to frequency, duration and severity in their season of occurrence be deemed an event of Force Majeure except that weather conditions that under good construction practices would prevent or limit the performance of the RTS Build-out Work shall be deemed to be Force Majeure. For purposes of this Lease, Force Majeure delays shall be deemed to exist only if Landlord or Tenant (as the case may be) promptly notifies the other party in writing of such delay and, after such initial notification promptly after request of the other party, Landlord or Tenant (as the case may be) notifies the other party of the status of such delay. Each party shall use all commercially reasonable efforts to mitigate the delay caused by any event of Force Majeure to the extent reasonably commercially practicable, but without the necessity of employing overtime or premium pay labor unless such party elects to do so within its sole discretion or unless the other party elects to pay for such overtime or premium pay labor. Any dispute as to whether any matter constitutes Force Majeure shall be resolved by arbitration pursuant to Article 25 hereof.

“GAAP” shall mean generally accepted accounting principles (consistently applied).

“Governmental Authority” shall mean the United States of America, the State of New York, the City of New York, any political subdivision thereof and any agency, department, commission, board, bureau or instrumentality of any of the foregoing, or any quasi-governmental authority, now existing or hereafter created, having jurisdiction over the Real Property or any portion thereof.

“Ground Floor Space” shall mean that portion of the ground floor level of the Building, as shown on Exhibit H annexed hereto and made a part hereof consisting of, for the purposes of this Lease, [***] usable square feet, which Exhibit H indicates thereon the path of travel to the Building lobby.

“Ground Lease” shall mean the Initial Ground Lease, as the same has been amended by the Tri-Party Agreement and as may (subject to the provisions of this Lease) be further amended, modified, supplemented, severed and/or restated from time to time.

“Ground Lease Landlord” shall mean the then landlord under the Ground Lease.

“Hard Costs” shall mean all labor costs and all forms of demolition, construction, materials, alterations and decoration work included in the Premises as part of Tenant’s Initial Work (but not any costs relating to the FF&E Work).

“Holidays” or “holidays” shall mean all Building Service Employees Union Contract holidays of general applicability to all employees.

“HVAC” shall mean heating, ventilation and air-conditioning.

“Improvements” shall mean the Unit, and any building machinery, equipment and fixtures (including Base Systems) affixed to and forming a part of the Building (including the Unit and the Common Elements), which may be erected or located wholly or partially on the Building during the Term of this Lease by or on behalf of the Condominium Board, Landlord, Tenant or any subtenant or any other occupant, but excluding any personal property owned or leased by Landlord, Tenant or any subtenant or any other occupant.

“Indemnitees” shall mean Landlord, each other Landlord Party and their respective partners, shareholders, officers, directors, members, employees, agents and contractors, the Public Parties, the Ground Lease Landlord, the Superior Lessors and the Superior Mortgagees.

“Initial Ground Lease” shall mean that certain Agreement of Lease, dated as of December 12, 2001, between 42DP, as landlord, and NYTB, as tenant, entered into in respect of the Real Property, as modified by the Tri-Party Agreement and as the same may (subject to the provisions of this Lease) be further amended or otherwise modified prior to the Lease Assignment Date.

“Initial Office Space” shall mean the Execution Date Initial Office Space, as the same may be reduced as provided in Section 1.03 hereof and each individual full floor portion thereof and, subject to the terms hereof, the 51st Floor Space being referred to herein as an “Office Space Portion”; it being agreed, however, in the event of a 51st Floor Space Use Change Election, subject to the last sentence of Section 2.02B hereof, the 51st Floor Space shall no longer be part of the Initial Office Space or Office Space Portion under any of the applicable terms of this Lease, including Article 35 hereof and, subject to the last sentence of Section 2.02B hereof, Tenant’s Proportionate Operating Expense Share and Tenant’s Proportionate Tax Share shall each be adjusted accordingly.

“Initial Space” shall mean, collectively, the Initial Office Space, the Ground Floor Space, and, if not included in the Initial Office Space due to a 51st Floor Space Use Change Election, the 51st Floor Space, subject, however, to the last sentence of Section 2.02B hereof.

“Initial Term” shall mean the initial term of this Lease commencing on the Commencement Date for the first Premises Portion hereunder and ending on the Expiration Date.

“Insurance Requirements” shall mean all customary requirements, now or hereinafter in effect, of any insurance policy covering or applicable to all or any part of the Real Property, the Building, the Unit, the Demised Premises, the Roof Top Garden Space, or the use thereof, all requirements of the issuer of any such policy and all orders, rules, regulations, and other customary requirements of the Insurance Services Office, Inc. or any other body exercising the same or similar functions and having jurisdiction of all or any part of the Real Property, the Building, the Unit or the Demised Premises or the Roof Top Garden Space.

“Interest Rate” shall mean the Prime Rate plus two percent (2%) per annum.

“Interim Vacancy” shall mean that a Tenant Entity ceases to be in actual occupancy (i.e., exclusive of assignees, subtenants or other occupants which are not Tenant Entities) of any portion of the Office Space on an interim basis while the Tenant Entity is either reconfiguring or renovating its space for its own use or because of fire, casualty or, subject to the limitations contained herein, other Force Majeure causes, but in no event in connection with any assignment or subletting.

“Land” shall mean the land described in Exhibit B annexed hereto and made a part hereof, in the Borough of Manhattan, City, County and State of New York.

“Landlord” on the date as of which this Lease is made, shall mean, FC Eighth Ave., LLC, a Delaware limited liability company, having an office at c/o Brookfield Properties, 250 Vesey Street, 12th Floor, New York, New York 10281, and thereafter, shall mean only the owner, at the time in question, of the Unit or that portion of the Unit of which the Demised Premises are a part, or of a lease of the Unit or that portion of the Unit of which the Demised Premises are a part.

“Landlord Entity” shall mean the named Landlord herein (i.e., FC Eighth Ave., LLC) and Affiliates of Landlord and after any transfer of Landlord’s interest herein, the then landlord and the Affiliates of the then landlord.

“Landlord Party” shall mean a Landlord Entity and any principal, partner, member, officer, stockholder, director, trustees, employee or agent of a Landlord Entity or of any partner or member of any Person constituting a Landlord Entity or any other direct or indirect holder of an ownership interest in Landlord, disclosed or undisclosed.

“Lease Assignment Date” shall have the meaning set forth in the Initial Ground Lease.

“Legal Requirements” shall mean all laws, statutes and ordinances (including, without limitation, all building codes and zoning regulations and ordinances) and the orders, rules, regulations, directives and requirements of all Governmental Authorities, which may be applicable to or affecting this Lease, the Real Property, the Demised Premises, the Building, the Unit and/or the Common Elements or the use or occupancy thereof, whether now or hereafter enacted or in force, ordinary or extraordinary, foreseen or unforeseen and all requirements, obligations and conditions of all instruments of record relating to the Real Property.

“List” shall mean, collectively, as updated from time to time, the Specially Designated Nationals and Blocked Persons List maintained by OFAC and/or on any other similar list maintained by OFAC pursuant to any authorizing statute, executive order or regulation.

“Long Lead Item” shall mean any item which is not a stock item and must be specially manufactured, fabricated or installed or is of such an unusual, delicate or fragile nature that, in any such case, there is a substantial risk that (A) there will be a delay in its manufacture, fabrication, delivery or installation, or (B) after delivery, such item will need to be reshipped or redelivered or repaired so that in Landlord’s reasonable judgment the item in question cannot be completed when the standard items are completed even though the item in question is (1) ordered together with the other items required and (2) installed or performed (after the manufacture or fabrication thereof) in the order and sequence that such item and other items are normally installed or performed in accordance with good construction practice. In addition, “Long Lead Item” shall include any standard item which in accordance with good construction practice should be completed after the completion of any item of work in the nature of the items described in the immediately preceding sentence. Any dispute as to whether any work, materials, equipment, finishes, facilities, improvements or installations constitutes a Long Lead Item hereunder shall be resolved by arbitration pursuant to Article 25 hereof.

“Material Window Blocking” shall mean any permanent (or temporary if it continues for a period of sixty (60) consecutive days affecting any of the floors of the Office Space) Window Blocking erected by Landlord; it being agreed that none of the following shall constitute Material Window Blocking hereunder: (A) any Window Blocking erected (1) in connection with the performance of repairs, maintenance or improvements to the Building or performance of Landlord’s Work and/or (2) to comply with applicable Legal Requirements, including the permanent closing, darkening or bricking up of any such windows as required by

any Legal Requirements or (B) any exterior windows of the 51st Floor Space that are opaque as of the Execution Date.

“Milestone Date Agreements” shall mean one or more agreements stating, among other things, as applicable, the RSF of the Initial Space (as finally constituted), the Commencement Dates, the Rent Commencement Dates, the Trigger Rent Commencement Date, the applicable Tenant’s Proportionate Tax Shares, and Tenant Proportionate Operating Expense Shares (and other dates, obligations or rights of the parties which may be affected by the determination of such dates and shares).

“NYTB” shall mean New York Times Building LLC.

“NYTC” shall mean New York Times Company and its successors and assigns.

“NYTC Unit” shall mean the space demised to NYTC from time to time pursuant to that certain Agreement of Sublease, dated as of December 12, 2001, as the same may be amended, modified, supplemented and/or restated from time to time.

“Occupancy Date” shall mean the date upon which Tenant has Substantially Completed Tenant’s Initial Work in the applicable Office Space Portion and is otherwise able to open for the conduct of business therein; it being expressly understood and agreed that the performance of Tenant’s Initial Work, including any FF&E Work, and/or the presence of Tenant’s technical people in any portion of the Demised Premises, to install and test the operation of Tenant’s computer and other systems and equipment shall not be deemed the conduct of business by Tenant.

“Occupies” shall mean with respect to Tenant, actual occupancy of built-out Office Space (i.e., exclusive of subtenants (other than Affiliates of Tenant)) in space leased directly from Landlord (it being agreed that (A) any portion of the Office Space which is vacant as a result of an Interim Vacancy and (B) space occupied by or sublet to a Tenant Affiliate (but only for so long as an Affiliate) or occupied by Permitted Occupants, in each instance, shall be treated as being Occupied). “Occupied” and “Occupancy” shall have a correlative meanings.

“OFAC” shall mean the Office of Foreign Assets Control of the Department of the Treasury.

“Office Space” shall mean those portions of the Demised Premises (except for the Ground Floor Space) which are located in the Unit and are permitted to be used for office purposes, including, for avoidance of doubt, the 51st Floor Space; provided, however, in the event of a 51st Floor Space CofO Change Denial, the 51st Floor Space, subject to the last sentence of Section 2.02B hereof, shall no longer be part of the Office Space under any of the applicable terms of this Lease, including Article 35 hereof.

“Operational Hazardous Materials” shall mean any Hazardous Materials which are normally or reasonably used in the operation, maintenance or use of a Comparable Building, provided that the same are permitted to be used in such operation, maintenance or use by Legal Requirements and/or Insurance Requirements and are used, stored and disposed of in compliance in all material respects with Legal Requirements and/or Insurance Requirements, including, without limitation, use of fuels, heating oil, lubricants, pesticides, cleaning materials, paint and paint thinners, asphalt, caulks, and chemicals commonly used in connection with heating, plumbing, mechanical and electrical systems and in photocopying machines, computers, word processing equipment and other business machines (but excluding any Hazardous Materials which have been incorporated into the structure of the Building or the Base Systems).

“Organized Crime Figure” shall mean any Person (A) who has been convicted in a criminal proceeding for a felony or any crime involving moral turpitude or that is an organized crime figure or is reputed to have substantial business or other affiliations with an organized crime figure, or (B) who, directly or indirectly controls, is controlled by, or is under common control with, a Person who has been convicted in a criminal proceeding for a felony or any crime involving moral turpitude or that is an organized crime figure or is reputed to have substantial business or other affiliations with an organized crime figure. The determination as to whether any Person is an organized crime figure or is reputed to have substantial business or other affiliations with an organized crime figure shall be within the sole discretion of Landlord, which discretion shall be exercised in good faith or as determined by the Ground Lease Landlord in accordance with the terms of the Ground Lease.

“Permitted Entity” shall mean Original Tenant or a Successor to Original Tenant and/or an Affiliate of Original Tenant, in each case, that is then tenant under this Lease.

“Person” shall mean (A) an individual, corporation, limited liability company, partnership, joint venture, estate, trust, unincorporated association or other business entity, (B) any federal, state, county or municipal government (or any bureau, department, agency or instrumentality thereof), and (C) any fiduciary acting in such capacity on behalf of any of the foregoing.

“PILOT” shall have the meaning set forth in the Unit Ground Lease.

“Premises Portion” shall mean, on an individual basis (and not collectively), each Office Space Portion and the Ground Floor Space and, if not included in the Office Space Portion due to a 51st Floor Space Use Change Election, the 51st Floor Space, subject, however, to the last sentence of Section 2.02B hereof.

“Prime Rate” shall mean, for any period of time during the Term of this Lease, the then published annual prime or base interest rate upon unsecured loans charged by JPMorgan Chase (or any successor thereto) or Citibank, N.A. (or any successor thereto) if JPMorgan Chase N.A., Citibank, N.A. (or such successor shall not then have an announced prime or base rate).

“Principal” shall mean, with respect to any Person, (A) any director or the president, any vice president, the treasurer, or the secretary thereof if such Person is a corporation, (B) any general partner of a partnership or managing member or manager of a limited liability company, or (C) any shareholder, limited partner, member or other Person having a direct or indirect economic interest in such Person, whether beneficially or of record, in excess of ten percent (10%) of all of the issued and outstanding shares, partnership interests, limited liability company interests or other ownership interests of such Person. In calculating the percentage interest of any shareholder, partner, member or other beneficially interested Person referred to in the prior sentence, the interest in the equity of any Affiliate of such shareholder, partner, member or beneficially interested Person shall be attributed to such shareholder, partner, member or beneficially interested Person.

“Private Shuttle Elevator” shall mean that certain passenger elevator to be constructed and installed as part of Landlord’s Supplemental Work (and part of Landlord’s Commencement Date Work solely with respect to the 51st Floor Space) in a portion of the Primary Block between the 49th, 50th, 51st floors of the Building and Tenant’s Roof Top Space, which Private Shuttle Elevator shall consist of equipment and finishes that are consistent with similar installations in Comparable Buildings; it being agreed that the major equipment therefor shall be obtained from the top three (3) national suppliers of such equipment (one of which is Fujitec).

“Private Shuttle Elevator Areas” shall mean the portions of the Demised Premises in which the Private Shuttle Elevator and the equipment and elevator pit therefor are located.

“Prohibited Entity” shall mean (A) any Prohibited Person, (B) any Person that is identified on the List or (C) any Person that is a NYTC Competing User (as defined in the Condominium Declaration).

“Prohibited Person” shall mean (A) any Person (1) that is in default after notice and beyond the expiration of any applicable cure period, of such Person’s obligations under any material written agreement with the City, the State or any of their instrumentalities, or (2) that directly controls, is controlled by, or is under common control with a Person that is in default after notice and beyond the expiration of any applicable cure period, of such Person’s obligations under any material written agreement with the City, the State or any of their instrumentalities, unless, in each instance, such default or breach either (a) has been waived in writing by the City, the State or any of their instrumentalities as the case may be or (b) is being disputed in a court of law, administrative proceeding, arbitration or other forum or (c) is cured within thirty (30) days after a determination and notice to Tenant from Landlord that such Person is a Prohibited Person as a result of such default; (B) any Person that is an Organized Crime Figure; (C) any government, or any Person that is directly or indirectly controlled (rather than only regulated) by a government, that is finally determined to be in violation of (including, but not limited to, any participant in an international boycott in violation of) the Export Administration Act of 1979, as amended, or any successor statute, or the regulations issued pursuant thereto, or any government that is, or any Person that, directly or indirectly, is controlled (rather than only regulated) by a government that is subject to the regulations or controls thereof; (D) any government, or any Person that, directly or indirectly, is controlled (rather than only regulated) by a government, the effects or the activities of which are regulated or controlled pursuant to regulations of the United States Treasury Department or executive orders of the President of the United States of America issued pursuant to the Trading with the Enemy Act of 1917, as amended; (E) any Person that is in default in the payment to the City of any real estate taxes, sewer rents or water charges totaling more than $10,000, unless such default is then being contested in good faith in accordance with applicable Legal Requirements or unless such default is cured within thirty (30) days after a determination and notice to Tenant from Landlord that such Person is a Prohibited Person as a result of such default; or (F) any Person (1) that has solely owned, at any time during the 3-year period immediately preceding a determination of whether such Person is a Prohibited Person, any property which, while in the ownership of such Person, was acquired by the City by in rem tax foreclosure, other than a property in which the City has released or is in the process of releasing its interest pursuant to the Administrative Code of the City, or (2) that, directly or indirectly controls, is controlled by, or is under common control with a person that has owned, at any time in the 3-year period immediately preceding a determination of whether such Person is a Prohibited Person, any property which, while in the ownership of such person, was acquired by the City by in rem tax foreclosure, other than a property in which the City has released or is in the process of releasing its interest to such person pursuant to the Administrative Code of the City.

“Project Documents” shall have the meaning set forth in the Unit Ground Lease.

“Real Property” shall mean collectively the Land and the Building.

“Recognized Mortgagee” shall have the meaning set forth in the Unit Ground Lease.

“Recurring Additional Rent” shall mean the recurring monthly payments of Tenant’s Tax Payment, Tenant’s BID Payment and/or Tenant’s Operating Expense Payment.

“Related Entity” shall mean any Successor to Tenant or any Affiliate of Tenant, Permitted Occupants, any subtenant or any other occupant of the Premises or any other Person claiming by, through or under Tenant at the Premises, and each of their respective direct or indirect partners, officers, shareholders, directors, principals, partnerships, managers, trustees, members, beneficiaries, employees, contractors, licensees, agents, representatives, guests and invitees at the Premises.

“Rent” or “rent” shall mean all Fixed Rent, Additional Rent and all other charges payable under this Lease.

“Rent Commencement Date” or “RCD” shall mean, with respect to each Premises Portion, the date that is [***] after the Commencement Date for such Premises Portion has occurred.

“Rentable Square Feet” or “RSF” shall mean the rentable square feet of the Demised Premises (it being agreed, for avoidance of doubt, that any space located in the Demised Premises in which the Private Shuttle Elevator is located shall be included in the RSF of the Demised Premises), the Unit and/or other portions of the Building (as the case may be), which RSF for each floor as of the Execution Date Initial Office Space is set forth on Exhibit C annexed hereto and made a part hereof.

“Restricted Work” shall mean any Tenant Changes (including Tenant’s Initial Work) creating excessive noise, vibration or fumes (including, but not limited to any Tenant Change (s) involving (A) demolition, (B) cutting, trenching, chopping and drilling of floor slabs, (C) shooting fasteners into slab, floor or overhead, (D) spraying of paint or other coatings, (E) disconnects or shutdowns affecting other tenants or other parts of the Building, (F) burning or welding of steel which causes fumes to be transmitted to other parts of the Building or (G) the use of air-hammers or concrete saws).

“Retail PILOT” shall have the meaning set forth in the Unit Ground Lease.

“Retail Unit” shall mean the space demised under the Retail Unit Lease.

“Retail Unit Lease” shall mean that certain Agreement of Sublease (Retail), dated as of December 12, 2001, originally between NYTB, as landlord, and Landlord’s predecessor-in-interest, as tenant, as the same may be amended, assigned, modified, supplemented and/or restated from time to time.

“Roof Top Garden Space” shall mean that portion of the Special FC Limited Areas as shown on Exhibit F annexed hereto, a portion of which, up to [***] square feet shall be permitted to be Tenant’ Roof Top Space hereunder.

“RTS Build-out Work” shall mean all of the materials and work required to construct and finish Tenant’s Roof Top Space and other applicable portions of the Roof Top Garden Space in accordance with Article 42 hereof (exclusive of any supplemental work thereon that Tenant elects to have Landlord perform on Tenant’s behalf on the Roof Top Garden Space as permitted under Article 42 hereof).

“RTS User” shall mean Tenant, Tenant Parties and the employees, licensees or invitees of the permitted occupants of the Premises that are permitted to use Tenant’s Roof Top Space under Article 42 hereof.

“Scheduled PILOT Conversion Date” shall have the meaning set forth in the Unit Ground Lease, which date is December 31, 2032.

“Signage Threshold Conditions” shall mean the following conditions (any of which may be waived by Landlord in its sole discretion):

(A) for purposes of the provisions of Section 38.02A hereof (i) a Permitted Entity is then the tenant under this Lease and has at least six (6) full floors of Office Space under direct lease with Landlord, (ii) the then Permitted Entity shall be in Occupancy of at least six (6) full floors of Office Space, (iii) in Landlord’s reasonable judgment, such Permitted Entity is engaged in a business or activity, and the Demised Premises are being used in a manner, as reasonably determined by Landlord, consistent with tenancies of a character and corporate identity in Comparable Buildings and (iv) there shall be no monetary default or material non-monetary default by Tenant under this Lease, in each case, beyond the expiration of any applicable notice and/or cure periods, if any (collectively, the “Primary Signage Threshold Conditions”).

(B) for purposes of Section 38.02B hereof, (i) a Permitted Entity is then the tenant under this Lease and has at least four (4) full floors of Office Space under direct lease with Landlord, (ii) the then Permitted Entity shall be in Occupancy of at least four (4) full floors of Office Space, (iii) in Landlord’s reasonable judgment, such Permitted Entity is engaged in a business or activity, and the Demised Premises are being used in a manner, as reasonably determined by Landlord, consistent with tenancies of a character and corporate identity in Comparable Buildings and (iv) there shall be no monetary default or material non-monetary default by Tenant under this Lease, in each case, beyond the expiration of any applicable notice and/or cure periods, if any (collectively, the “Secondary Signage Threshold Conditions”).

For avoidance of doubt, Tenant acknowledges for the purposes of this definition and any other Occupancy (or leasing tests) based on a full floor, the 51st Floor Space in no event shall be deemed to be a full floor.

“Soft Costs” shall mean the amounts paid by Tenant solely in connection with Tenant’s Initial Work attributable to architect, construction management, consulting, attorney (but only to the extent that the same relates to Tenant’s Initial Work, and not on account of the negotiation or entering into of this Lease or any other agreement with Landlord or any other Person), engineering, permit and filing, and other similar fees (including, without limitation, general conditions and contractor fees).

“Special FC Limited Areas” shall have the meaning set forth in the Condominium Declaration.

“Specialty Alterations” shall mean Tenant Changes made in or to the Demised Premises (or other portions of the Building to the extent expressly permitted hereunder, if any) which are not customary office installations, including, but not limited to, cooking kitchen facilities (i.e., a kitchen that has stoves and/or venting), safes or vaults, gymnasiums, executive bathrooms, raised flooring, trading floors, reinforced flooring (but only to the extent the same materially reduces ceiling heights), dumbwaiters, pneumatic tubes, shaft space constructed within the Demised Premises as part of any Tenant Changes (but only to the extent such shaft space materially exceeds that typically found in standard office installations), any Antenna, vertical and horizontal transportation systems, auditorium, child or health care facilities, travel agency, print shop, conveyors, elevators, mezzanine space or mezzanine floors, internal staircases, escalators and alterations made to fire staircases used for inter-floor traffic, emergency generators, UPS systems and related equipment and facilities, any Specialty Bathroom Work, or any other Tenant Change of a similar character; it being agreed, however, that in no event shall Specialty Alterations include (i) any underfloor or overhead wiring or cabling, (ii) any raised flooring affecting an area of [***] square feet or less, (iii) any alterations (whether or not the same would otherwise constitute a Specialty Alteration) that are located in the Execution Date

Occupied Space as of the Execution Date (it being agreed by Landlord that, notwithstanding anything to the contrary contained in the Existing Subleases, in no event shall Landlord require the removal of the same), (iv) the RTS Build-out Work, (v) the Private Shuttle Elevator Work, or (vi) typical office pantries or non-cooking cafeterias and dining areas, café areas, and the like (collectively, the “Specialty Alterations Exceptions”).

“Specialty Bathroom Work” shall mean any relocation or expansion of the core bathrooms located in the Office Space (it being acknowledged that the 51st Floor Space does not have any such core bathrooms) and/or the installation of new gender-neutral bathrooms, including, without limitation, any showers in connection with the foregoing, that Tenant performs as part of Tenant’s Initial Work or otherwise.

“Stated Expiration Date” June 30, 2033 [***].

“Subway Agreement” shall mean that certain Agreement, dated as of December 12, 2001, among NYTB, The New York City Transit Authority, 42DP and the City, as the same may (subject to the provisions hereof) be amended, modified or supplemented and/or restated from time to time.

“Superior Instruments” shall mean the Condominium Documents, DUO, the Ground Lease, the Unit Ground Lease, the Subway Agreement, the Vault Agreement, the other Project Documents, and any Superior Lease or Superior Mortgage.

“Superior Lessor” shall mean the lessor under a Superior Lease.

“Superior Mortgagee” shall mean the holder or holders (including the agent for any lending syndicate) of a Superior Mortgage.

“Superior Obligation Instruments” shall mean each of the Condominium Documents, DUO, the Ground Lease and the Unit Ground Lease.

“Superior Party” shall mean each of the Condominium Boards, the Ground Lease Landlord, the Unit Ground Lease Landlord, any Superior Lessor, any Superior Mortgagee, 42DP and the City.

“Target Commencement Date” shall mean the following:

(A) with respect to the Execution Date Encumbered Office Space located on:

(i) each of the 47th floor, 48th floor and 50th floor of the Building, March 1, 2025; provided, however, with respect to any of the 47th floor, 48th floor or 50th floor of the Building as to which Tenant timely makes a DCE Election, the Target Commencement Date for any such floor shall be January 1, 2025;

(ii) the 37th floor of the Building, September 1, 2022; and

(iii) [***], as to each of the 29th floor and 30th floor of the Building, the date which is the later to occur of (a) June 1, 2023 or (b) if Landlord does not enter into the 47-48-50 Short Term Extension, March 1, 2025; provided, however, if with respect to either of the 29th floor or 30th floor of the Building included in the Initial Office Space and as to which Tenant timely makes a DCE Election, the Target Commencement Date for

any such floor shall be either (1) April 1, 2023 or (2) if Landlord does not enter into the 47-48-50 Short Term Extension, January 1, 2025,

(B) with respect the 36th floor of the Building, September 1, 2022;

(C) with respect to the 51st Floor Space, the later of (i) June 15, 2023 and (ii) 345 days following the filing of the 51st Floor Space CofO Change Application; and

(D) with respect to Ground Floor Space, March 31, 2023.

“Taxable Square Foot” shall have the meaning set forth in the Unit Ground Lease.

“Tenant” shall mean Datadog, Inc. and its Successors and permitted assigns.

“Tenant Entity” shall mean Tenant and its Related Entities.

“Tenant Party” shall mean Tenant and any Principal, partner, member, officer, stockholder, director, employee or agent of Tenant or of any partner or member of any Person constituting Tenant or any other direct or indirect holder of an ownership interest in Tenant, disclosed or undisclosed.

“Tenant’s Initial Work” shall mean those Tenant Changes consisting of all of the materials and work (including any and all FF&E Work), required to construct and finish the Initial Space for Tenant’s initial occupancy thereof, all of which shall be performed by or on behalf of Tenant, at Tenant’s sole cost and expense (but subject to reimbursement from Landlord’s Contribution subject to and in accordance with the terms of Article 35 hereof), including any structural, electrical or plumbing work required to meet Tenant’s structural, electrical or plumbing requirements, any HVAC duct work and any other HVAC work required for Tenant’s needs to distribute HVAC on each floor or portion of the Demised Premises, carpentry, painting, wall covering, paneling and cabinet work and the installation of the wiring and cabling for Tenant’s telephone and other telecommunications and data processing systems (including any and all of the equipment therefor), substantially as shown on the Final Working Drawings therefor, together with such changes thereto as may be made thereto as provided in Article 13 hereof; it being agreed that Tenant’s Initial Work shall not include any of Landlord’s Work.

“Tenant’s Percentage” shall mean collectively, or individually as applicable, Tenant’s Proportionate Tax Share and Tenant’s Proportionate Operating Expense Share, in each case, for the applicable Premises Portion.

“Tenant’s Property” shall mean all machinery, equipment, signage and trade fixtures (A) installed by Tenant which are removable without material damage to the Demised Premises, the Unit, the Common Elements, the FC Limited Common Elements, the NYTC Limited Common Elements or the Building (including interior and exterior signage), (B) which are not replacements of any property of Landlord or the Condominium, whether any such replacement is made at Tenant’s expense or otherwise, (C) which do not constitute Base Systems, FC Limited Common Elements, NYTC Limited Common Elements or Common Elements and (D) which do not and would not constitute machinery and fixtures used in connection with the operation of the Building under the Ground Lease or any “Equipment” (as such term is defined in the Unit Ground Lease) therein and which would not otherwise constitute the property of any of the Superior Parties; it being agreed, for avoidance of doubt, that Tenant’s Property shall include all furniture, furnishings, and other articles of movable personal property

owned by Tenant or any other Tenant Party or Related Entity and located in the Premises, all RTS Space Property and all batteries for any uninterruptible power supply.

“Tenant’s Roof Top Space” shall mean the portion of the Roof Top Garden Space initially designated as such crossed-hatched on Exhibit F annexed hereto; it being agreed, to the extent not prohibited by applicable Legal Requirements or the Superior Obligation Instruments, Landlord shall reasonably cooperate with Tenant to adjust the location of such designation to accommodate Tenant’s use thereof and permitted Tenant Changes thereto.

“Term” shall mean the Initial Term of this Lease [***] or such sooner date as this Lease shall terminate pursuant to any of the terms of this Lease or pursuant to law.

“Times Square Theater Surcharge” shall mean the “Theater Surcharge” as such term is defined in the Unit Ground Lease.

“Trigger Rent Commencement Date” shall mean the date that is [***] following the later to occur of the Commencement Date for the Initial Office Space located on either of the 29th or 30th floor of the Building; [***].

“Tri-Party Agreement” shall mean that certain Tri-Party Agreement, dated as of June 25, 2004, by and among 42DP, ESDC, NYTB and GMAC Commercial Mortgage Corporation (now known as Capmark Finance Inc.).

“Unit” shall mean the FC Collective Unit (as defined in the Condominium Declaration), including any interest owned by the FC Unit Owner in the Common Elements and the FC Limited Common Elements (including the Special FC Limited Areas) appurtenant to the FC Collective Unit (including the Special FC Limited Areas), but expressly excluding therefrom the Retail Unit and any limited common elements appurtenant thereto, if any.

“Unit Ground Lease” shall mean that certain Agreement of Sublease (Office), dated as of December 12, 2001, originally between NYTB, as landlord, and Landlord, as tenant, as the same has been modified by the Tri-Party Agreement and may (subject to the provisions of this Lease) be assigned, further amended, modified or supplemented and/or or restated from time to time.

“Unit Ground Lease Landlord” shall mean the then landlord under the Unit Ground Lease.

“Vault Agreement” shall mean that certain Vault Sublicense, dated as of December 12, 2001, by and between 42DP and NYTB, as the same may (subject to the provisions hereof) be assigned, amended, modified or supplemented and/or restated from time to time.

“Window Blocking” shall mean that any exterior, curtainwall window of the Office Space is blocked or bricked-up for any reason (including, without limitation, by Landlord (A) in connection with the performance of repairs, maintenance or improvements to the Building, (B) if required by any Legal Requirements, or (C) by the use of any netting or similar device).

B.Rules of Construction.

The following rules of construction shall be applicable for all purposes of this Lease and all agreements supplemental hereto, unless the context otherwise requires:

(a)The terms “hereby”, “hereof”, “hereto”, “herein”, “hereunder” and any similar terms shall refer to this Lease, and “hereafter” shall mean after, and “heretofore” shall mean before, the date of this Lease.

(b)Words of the masculine, feminine or neuter gender shall mean and include the correlative words of the other genders and words importing the singular number shall mean and include the plural number and vice versa.

(c)The terms “include”, “including” and similar terms shall be construed as if followed by the phrase “without being limited to”.

(d)The term “and/or” when applied to one or more matters or things shall be construed to apply to any one or more or all thereof as the circumstances warrant at the time in question.

(e)The phrases “Landlord shall not have liability to Tenant” or “the same shall be without liability to Landlord” or “without incurring any liability to Tenant therefor” or phrases of similar import shall mean that Tenant is not entitled to terminate this Lease, or to receive any abatement or diminution of rent, claim Landlord Delay or to be relieved in any manner of any of its other obligations hereunder, or to be compensated for loss or injury suffered or to enforce any other right or kind of liability whatsoever against Landlord under or with respect to this Lease or with respect to Tenant’s use of occupancy of the Demised Premises or any part thereof.

(f)The phrase “such consent shall not be unreasonably withheld” or phrases of similar import shall mean such consent shall not be unreasonably withheld or delayed or conditioned (unless the specific provision in which the phrase is used has conditions that are required to be satisfied).

(g)Whenever this Lease requires Landlord to be “reasonable” in giving its consent or approval or in performing an act or refraining from taking any action, Landlord’s refusal to consent, approve, perform or refrain shall be deemed to be “reasonable” if Landlord’s approval or consent, performance of any act or refraining from taking any action, would, in the exercise of Landlord’s reasonable judgment, constitute a default under any Superior Instrument.

(h)Each term, covenant, agreement, obligation or other provision of this Lease on Tenant’s part to be performed shall be deemed and construed as a separate and independent covenant of Tenant, not dependent upon any of the other terms of this Lease, as to which Tenant’s obligation shall be time of the essence subject, however, to any notice and/or cure period specifically set forth in this Lease with respect to the obligation at issue, if any. This Lease shall be construed without regard to any presumption or other rule requiring construction against the party causing this Lease to be drafted. In the event of any action, suit, dispute or proceeding affecting the terms of this Lease, no weight shall be given to any deletions or striking out of any of the terms of this Lease contained in any draft of this Lease and no such deletion or strike out shall be

entered into evidence in any such action, suit, dispute or proceeding nor given any weight therein.

1.02Landlord hereby leases to Tenant and Tenant hereby hires from Landlord the Demised Premises for the Term. The leasing of the Demised Premises by Tenant shall include the right of Tenant (a) subject to the terms of this Lease and the Superior Instruments, to access the Building common areas in common with other tenants and occupants in the Building and (b) to use all fixtures, improvements and betterments owned or leased by Landlord which, at any time during the Term of this Lease, are attached to or installed in the Demised Premises, all subject to such restrictions, rules, regulations, security and access control arrangements and charges (if any) as are provided for in this Lease.

1.03[***]

TO HAVE AND TO HOLD unto Tenant, its successors and permitted assigns, for the Term, YIELDING AND PAYING the Fixed Rent and all Additional Rents hereinafter set forth, all on the covenants, conditions and agreements hereinbefore and hereinafter stated.

ARTICLE 2

COMMENCEMENT OF TERM; ACCESS TO AND

POSSESSION OF DEMISED PREMISES; LANDLORD'S WORK

2.01 A. The Term of this Lease shall commence with respect to each Premises Portion on the Commencement Date therefor. The payment of Fixed Rent for the applicable Premises Portion shall commence, subject to Section 3.01B hereof, on the Commencement Date therefor and the payment of Recurring Additional Rent shall commence as provided in Article 4 hereof. All other Rent, and Additional Rent for electricity, freight elevators and other utilities and services, shall be due and payable as hereinafter provided in this Lease.

B. Tenant shall have the right of access to the Demised Premises prior to the Commencement Date for any portion of the Initial Space for the purpose of verification of field conditions and inspection of construction materials (but not storage of the same) and methods and for the taking of measurements and other pre-construction activity (but not performing any Tenant Changes except that, solely with respect to the 51st Floor Space, Tenant shall be permitted to access the same to perform Tenant Changes therein; provided that any such access shall not be sooner that ninety (90) days prior to the date that Landlord reasonably anticipates that Landlord’s Commencement Date Work in the 51st Floor Space shall be Substantially Complete (it being agreed, however, if there is a 51st Floor Space Use Change Election, Tenant shall not be permitted to have any such access to perform Tenant Changes in the 51st Floor Space prior to the Commencement Date therefor), provided that (i) Tenant coordinates the timing of such access with Landlord (and Landlord shall cooperate and coordinate with Tenant in arranging such access; provided, however, that, except as otherwise expressly provided herein, during the period prior to the Occupancy Date and Substantial Completion of the Landlord’s Supplemental Work, the scheduling of such access shall be subject to the performance and priority of Landlord’s Work), (ii) such access does not interfere (by more than a de minimis extent) with the performance of Landlord’s Work or any other work being performed by or on behalf of Landlord at or in the Building or the Unit, (iii) Tenant agrees to cease promptly upon request by Landlord any activity which, in Landlord’s sole discretion (but which sole discretion shall not be exercised in an arbitrary or capricious manner), shall interfere (by more than a de minimis extent) with or delay prosecution or completion of Landlord’s Commencement Date Work or any of such work being performed by or on behalf of Landlord at or in the Building or the Unit, (iv) Tenant shall comply promptly with all procedures and regulations reasonably

prescribed by Landlord for coordinating such access and activities with any other activity or work in the Demised Premises or at or in the Building or the Unit, provided that Tenant has been given prior notice thereof, (v) such access shall be at the sole risk of Tenant, shall be deemed to be a license on all of the same terms and conditions contained in this Lease other than the obligation to pay Fixed Rent and Additional Rent and Landlord shall not have liability to Tenant on account thereof, (vi) prior to exercising such right, Tenant shall deliver to Landlord the policies of insurance (or certificates therefor) required by this Lease, (vii) Tenant shall be bound by its indemnity obligations set forth in Section 16.07A hereof, and (viii) to the extent that any such access causes actual delay in the Substantial Completion of Landlord’s Work, such delay, subject to the provisions of Section 2.04 hereof, shall be deemed to be a Tenant Delay.

2.02 A. Subject to the terms hereof, Landlord, at Landlord’s sole cost and expense (except as otherwise provided herein) shall perform the work with respect to each Premises Portion described on Exhibit 2.02A annexed hereto and made a part hereof (“Landlord’s Commencement Date Work”) in material compliance with applicable Legal Requirements. Notwithstanding the foregoing, (i) solely with respect to the Execution Date Encumbered Office Space, Tenant shall have the option (the “Demolition Credit Election”), exercised by written notice (a “DCE Election”) (given to Landlord given not later than (x) in respect of the 29th and 30th floors [***], December 31, 2022; provided, however if Landlord does not enter into the 47-48-50 Short Term Extension, then January 1, 2024, (y) intentionally omitted, and (z) in respect of the 47th, 48th and 50th floors, March 1, 2024 (any such floor(s) as to which Tenant makes a Demolition Credit Election, is a “DCE Floor”), (ii) with respect to any DCE Floor (a) Landlord shall have no obligation to perform any Landlord’s Commencement Date Work therein and (b) [***], and (iii) if (a) Tenant makes a 51st Floor Space Storage Use Election, then, notwithstanding anything to the contrary contained in Exhibit 2.02A annexed hereto, Landlord’s Commencement Date Work for the 51st Floor Space shall not include (x) the removal of existing insulation covering the exterior windows or the patching of any holes in the mullions or (y) any obligation of Landlord to obtain the 51st Floor Space CofO Change or (b) Tenant makes (or is deemed to have made) the 51st Floor Space Shuttle Elevator Area Election, then, notwithstanding anything to the contrary contained in Exhibit 2.02A annexed hereto or in this Lease, Landlord’s Commencement Date Work for the 51st Floor Space shall (aa) be limited solely to (x) the Private Shuttle Elevator Work therein and (y) installation of a code compliant demising wall enclosing the Private Shuttle Elevator Areas on the 51st floor of the Building from the balance of the 51st floor of the Building and (bb) not include any obligation of Landlord to obtain the 51st Floor Space CofO Change. For avoidance of doubt, Tenant hereby acknowledges and confirms that it not making a Demolition Credit Election with respect to the 37th floor portion of the Initial Office Space and Landlord shall be performing Landlord’s Commencement Date Work therein.

B. Without limiting Landlord’s obligation to perform Landlord’s Commencement Date Work with respect to the 51st Floor Space as required hereunder, Landlord agrees that promptly after Landlord is legally permitted to file the application(s) (the “51st Floor Space CofO Change Application”) required by applicable Governmental Authorities in order to obtain an amendment to the existing certificate of occupancy for the Building to allow for the 51st Floor Space to be used for office purposes (the “51st Floor Space CofO Change ”), Landlord shall submit a complete 51st Floor Space CofO Change Application to the applicable Governmental Authority and pursue the same in good faith and due diligence. If Landlord does not submit the 51st Floor Space CofO Change Application within ninety (90) days after Landlord is legally permitted to do so (such date, as the same may be extended as provided below, the “51st Floor Submission Outside Date”), and diligently pursue obtaining the 51st Floor Space CofO Change Application, then, as liquidated damages (and not a penalty) and Tenant’s sole and exclusive remedy therefor, Tenant shall receive a credit against the Fixed Rent accruing hereunder in the amount of [***] for each day after the 51st Floor Submission Outside Date until Landlord has so submitted the 51st Floor Space CofO Change Application; provided that if the

51st Floor Space CofO Change Application has not been submitted on or prior to the sixtieth (60th) day after the 51st Floor Submission Outside Date, then the credit against Fixed Rent shall be increased after such sixtieth (60th) day to [***] for each day thereafter until Landlord has so submitted the 51st Floor Space CofO Change Application. Notwithstanding the foregoing, the 51st Floor Submission Outside Date shall be extended by one (1) day for each day that Landlord is actually delayed in submitting the 51st Floor Space CofO Change Application as a result of Force Majeure (not to exceed ten (10) Business Days), and/or Tenant Delay; it being agreed, however, that any such extension of such dates is not intended to be cumulative (or “double counted”), and that if more than one Tenant Delay or more than one Force Majeure event would actually delay Landlord in completing the applicable portion of Landlord’s Work, but such events and the delays caused by them occur simultaneously, then, to the extent of such simultaneous occurrence, such delays (whether caused by Tenant Delays, by Force Majeure or both) shall be deemed to run concurrently and not consecutively. Landlord shall keep Tenant reasonably apprised of the status of the 51st Floor Space CofO Change Application and, in the event the 51st Floor Space CofO Change Application is denied (a “51st Floor Space CofO Change Denial”), Landlord shall give Tenant prompt notice thereof, together with reasonable evidence of such denial. Subject to the terms of the definition of the Commencement Date for the 51st Floor Space, Tenant shall have the right to challenge the 51st Floor Space CofO Change Denial but Landlord makes no representation or warranty with respect to any such challenge and the same shall be without liability of Landlord to Tenant and shall not constitute an actual or constructive eviction and no diminution (except for the adjustment to the Fixed Rent for the 51st Floor Space as provided in Section 3.01A(iii) hereof (subject, however, to the last sentence of Section 2.02B hereof)) or abatement of rent or other compensation shall or will be claimed by Tenant as a result of Tenant being unsuccessful in any such challenge, nor shall this Lease or any of the obligations of Tenant be affected or reduced by reason of such challenge. In the event that Tenant is successful in any such challenge, Landlord and Tenant agree to re-instate the applicable provisions of this Lease as if Tenant had not made any 51st Floor Space Use Change Election with respect thereto, except that Landlord’s Commencement Date Work as so modified shall remain unchanged and, Landlord, as part of Landlord’s Supplemental Work, shall, if so elected by Tenant, (x) remove the existing insulation covering the exterior windows in the 51st Floor Space and patch any holes in the mullions and (y) if Tenant had made (or is deemed to have made) the 51st Floor Space Shuttle Elevator Area Election, remove any demising wall enclosing the 51st Floor Shuttle Elevator Space and provide access to the Private Shuttle Elevator from the 51st Floor Space.

C. Subject to completion of Landlord’s Commencement Date Work and Landlord’s Supplemental Work (collectively, “Landlord’s Work”) and any Punch List Items relating thereto, Tenant shall accept the applicable Premises Portion “as is” on the Commencement Date therefor and Landlord shall not thereafter be required to perform any work, install any fixtures or equipment or render any services to make the Building or the Premises ready or suitable for Tenant’s use or occupancy (but the foregoing shall not relieve Landlord of obligations to perform Punch List Items or any of Landlord’s maintenance and repair obligations expressly set forth in this Lease). The term “Substantially Completed” or “Substantial Completion” shall mean, with respect to Landlord’s Work, the completion of materially all of the applicable components thereof except for (i) any Punch List Items and (ii) any portion of Landlord’s Work which, in accordance with good construction and scheduling practices, should only be completed after substantial completion of Tenant’s Initial Work (it being agreed that Landlord shall commence completion of any such item(s) of Landlord’s Work under this clause (ii) within five (5) Business Days (or as soon as reasonably practicable thereafter) after Landlord’s receipt of notice from Tenant of Substantial Completion of the item(s) of Tenant’s Initial Work in question, and Landlord shall prosecute completion of such deferred item(s) of Landlord’s Work diligently and with continuity until completion); it being agreed that any such deferred item(s) of Landlord’s Work (if any) shall not be a condition to the occurrence of any Commencement Date hereunder). The term “Punch List Items” shall mean such details of

construction, decoration and mechanical adjustment which are insubstantial or minor in character, the non-completion of which shall not interfere (by more than a de minimis extent) with Tenant’s use of the Premises or the performance of Tenant’s Initial Work. The taking of possession of any Premises Portion by Tenant for the performance of Tenant’s Initial Work or for any other reason whatsoever shall be deemed an acceptance of such Premises Portion and Substantial Completion by Landlord of Landlord’s Commencement Date Work therein (if any); provided, however, that the foregoing shall not relieve Landlord of its obligation to perform the remainder of Landlord’s Work to completion (including any Punch List Items relating thereto) or its repair and maintenance obligations hereunder. Landlord represents that as of the Commencement Date for the applicable Premises Portion the Base Systems serving such Premises Portion shall be in good working order.

D. Landlord shall send Tenant a notice not later than ten (10) Business Days prior to the date when Landlord reasonably anticipates that Landlord’s Commencement Date Work (if any) for any Premises Portion will be Substantially Completed and which notice shall fix the date for the Commencement Date for such Premises Portion (each, a “Commencement Date Notice”). Tenant shall conclusively be deemed to have agreed with Landlord’s determination of the Commencement Date for such Premises Portion as set forth in the Commencement Date Notice therefor unless within seven (7) Business Days after the giving of the Commencement Date Notice, Tenant shall deliver a notice to Landlord specifying with reasonable detail the reasons why Tenant asserts that the occurrence of the Commencement Date for such Premises Portion has not occurred. During this period, Tenant and its consultants shall have access to the Premises to inspect Landlord’s Commencement Date Work. Pending the resolution of such dispute, Tenant shall pay Fixed Rent and Additional Rent and otherwise conduct itself with respect to such Premises Portion based upon Landlord’s determination that the Commencement Date therefor has occurred, without prejudice to Tenant’s position. If it is resolved that the Commencement Date for such Premises Portion was not the date so fixed by Landlord, any payments of rent paid by Tenant to Landlord for periods prior to the proper Commencement Date therefor or the Rent Commencement Date therefor, as applicable, shall be credited by Landlord against amounts first due by Tenant under this Lease.

E. Landlord shall send Tenant a notice not later than ten (10) Business Days prior to the date when Landlord reasonably anticipates that Landlord’s Supplemental Work will be Substantially Completed (each, a “LSW Substantial Completion Notice”). Tenant shall conclusively be deemed to have agreed that Landlord’s Supplemental Work is Substantially Complete unless within seven (7) Business Days after the giving of the LSW Substantial Completion Notice, Tenant shall deliver a notice to Landlord specifying with reasonable detail the reasons why Tenant asserts that the applicable Landlord’s Supplemental Work is not Substantially Complete. During this period, Tenant and its consultants shall have access to the Premises to inspect the applicable Landlord’s Supplemental Work.

F. Tenant shall deliver a list to Landlord of Punch List Items no later than ten (10) Business Days following Substantial Completion of the applicable component of Landlord’s Work and Landlord making the applicable portion of the Premises available for inspection. Landlord shall proceed with reasonable diligence to complete all Punch List Items with respect to which Tenant has timely delivered a Punch List Notice following Substantial Completion of the applicable component of Landlord’s Work. Punch List Items shall be completed within forty five (45) days following the date on which the parties agree to the final list of Punch List Items, or, with respect to any Punch List Items which cannot be completed in the exercise of reasonable diligence within forty five (45) days, such longer period as may be required due to the nature of the Punch List Item(s) in question so long as Landlord exercises reasonable diligence in the performance of such Punch List Item(s) (such forty five (45) day or longer period subject, in all cases, to extension by reason of Tenant Delay and Force Majeure). Tenant shall permit Landlord and Landlord’s contractors and agents to enter the Premises after the Commencement Date for

the purpose of completing Punch List Items. Tenant hereby acknowledges and agrees that Landlord may be performing certain Punch List Items in portions of the Premises at the same time that Tenant (or its contractors) may be performing Tenant’s Initial Work in such portion of the Premises and, as such, Landlord and Tenant shall reasonably cooperate and coordinate so as to not delay each party’s performance of their respective work, provided, that Landlord shall not be required to perform any Punch List Items on an overtime or premium-pay basis. Landlord’s completion of Punch List Items shall not be deemed a constructive eviction of Tenant or entitle Tenant to any credit against or diminution or abatement of Fixed Rent or Additional Rent payable by Tenant under this Lease. If Tenant fails to timely give notice of Punch List Items then there shall not be any Punch List Items with respect to the applicable component of Landlord’s Work. If within five (5) Business Days after Landlord’s receipt of Tenant’s notice timely given of Punch List Items, Landlord and Tenant have not agreed upon a final list of the Punch List Items in writing, either party may submit any dispute concerning the list of Punch List Items to arbitration pursuant to Article 25.

G. (i) Subject to the terms hereof, Landlord shall use commercially reasonable efforts to Substantially Complete Landlord’s Commencement Date Work for each Premises Portion in which the same is being performed by the Target Commencement Date therefor; provided, however, that (A) in no event shall Landlord be required to perform Landlord’s Work on an overtime or premium pay basis and (B) subject to the terms of this Article 2, in no event shall Landlord be subject to any liability, nor shall the validity of this Lease be impaired, if Landlord fails to deliver possession of the any Premises Portion to Tenant by the Target Commencement Date therefor or any other particular date.

(ii) If (a) any Premises Portion (other than the Ground Floor Space) in which Landlord is performing Landlord’s Commencement Date Work therein (as the same may be modified as provided in Section 2.02B hereof with respect to the 51st Floor Space) has not been Substantially Completed (or deemed Substantially Completed) on or before the Target Commencement Date therefor (such Target Commencement Date, as the same may be extended as provided below, each, a “LW Outside Date”) and (b) solely as a result thereof, Tenant’s Initial Work in such Premises Portion is actually delayed by reason thereof, then with respect to any such Premises Portion that there is any such actual delay, as liquidated damages (and not a penalty) and Tenant’s sole and exclusive remedy therefor, for each day occurring after the LW Outside Date for such Premises Portion until such Landlord’s Commencement Date Work for such Premises Portion is Substantially Completed (or deemed Substantially Completed), Tenant shall receive a credit against the Fixed Rent payable solely with respect to the Premises Portion(s) in which there is an actual delay in an amount equal to one (1) times the per diem Fixed Rent payable solely with respect to such Premises Portion(s); provided, however if Landlord’s Commencement Date Work in such Premises Portion has not been Substantially Completed (or deemed Substantially Completed) on or prior to the sixtieth (60th) day after the LW Outside Date, then such credit against Fixed Rent shall be increased after such sixtieth (60th) day to two (2) times the per diem Fixed Rent payable solely with respect to such Premises Portion(s). Notwithstanding the foregoing, the applicable LW Outside Date shall be extended by one (1) day for each day that Landlord is actually delayed in performing Landlord’s Work as a result of Force Majeure (not to exceed one hundred twenty (120) days) and/or Tenant Delay it being agreed, however, that any such extension of such dates is not intended to be cumulative (or “double counted”), and that if more than one Tenant Delay or more than one Force Majeure event would actually delay Landlord in completing the applicable portion of Landlord’s Work, but such events and the delays caused by them occur simultaneously, then, to the extent of such simultaneous occurrence, such delays (whether caused by Tenant Delays, by Force Majeure or both) shall be deemed to run concurrently and not consecutively.

(iii) If the Landlord’s Commencement Date Work in the Ground Floor Space has not been Substantially Completed (or deemed Substantially Completed) on or before the

Target Commencement Date therefor (such Target Commencement Date, as the same may be extended as provided below, the “GFW Outside Date”), then solely with respect to the Ground Floor Space, as liquidated damages (and not a penalty) and Tenant’s sole and exclusive remedy therefor, Tenant shall receive a credit against the Fixed Rent accruing hereunder in the amount of [***] for each day after the GFW Outside Date until the Commencement Date for the Ground Floor Space occurs; provided that if such Commencement Date has still not occurred on or prior to the sixtieth (60th) day after the GFW Outside Date, then the credit against Fixed Rent shall be increased after such sixtieth (60th) day to [***] for each day thereafter until the Commencement Date for the Ground Floor Space occurs. Notwithstanding the foregoing, the GFW Outside Date shall be extended by one (1) day for each day that Landlord is actually delayed in performing Landlord’s Work as a result of Force Majeure (not to exceed one hundred twenty (120) days) and/or Tenant Delay it being agreed, however, that any such extension of such dates is not intended to be cumulative (or “double counted”), and that if more than one Tenant Delay or more than one Force Majeure event would actually delay Landlord in completing the applicable portion of Landlord’s Work, but such events and the delays caused by them occur simultaneously, then, to the extent of such simultaneous occurrence, such delays (whether caused by Tenant Delays, by Force Majeure or both) shall be deemed to run concurrently and not consecutively.

(iv) For avoidance of doubt, in no event shall the provisions of this Section 2.02G be applicable to any Execution Date Occupied Floors or any other Execution Date Encumbered Office Space in which Tenant elects to not have Landlord perform Landlord’s Commencement Date Work therein as provided in Section 2.02A hereof (i.e., DCE Floors).

2.03 A. Tenant acknowledges and agrees that (i) as of the Execution Date, the following work (collectively, “Landlord’s Supplemental Work”): (A) the RTS Build-out Work and (B) the Private Shuttle Elevator Work may have not been commenced or be completed and (ii) completion of Landlord’s Supplemental Work is not a condition to the occurrence of the Commencement Date for any Premises Portion (except, for avoidance of doubt, the Private Shuttle Elevator Work solely as it relates to the 51st Floor Space shall be part of Landlord’s Commencement Date Work therefor and Substantial Completion (or deemed Substantial Completion) thereof shall be a condition of the Commencement Date for the 51st Floor Space). Tenant shall reasonably cooperate with Landlord in connection with the performance of Landlord’s Supplemental Work. Landlord agrees that Landlord’s Supplemental Work shall be performed by Landlord, at its sole cost and expense (except as otherwise provided herein), in material compliance with applicable Legal Requirements and the Superior Instruments.

B. Subject to the terms hereof, Landlord agrees to use commercially reasonable efforts to Substantially Complete Landlord’s Supplemental Work prior to the Occupancy Date for the 45th through 50th floors of the Initial Office Portion; provided, however, that (A) in no event shall Landlord be required to perform Landlord’s Work on an overtime or premium pay basis and (B) except as other expressly provided in this Article 2, in no event shall Landlord be subject to any liability, nor shall the validity of this Lease be impaired, if Landlord fails to complete Landlord’s Supplemental Work by any particular date.

C. Without limiting Landlord’s obligation to perform the RTS Build-out Work as required hereunder, Landlord agrees that promptly after Landlord is legally permitted to file the application(s) required by applicable Governmental Authorities in order to obtain the RTS CofO Change (the “RTS CofO Change Application”), Landlord shall submit a complete RTS CofO Change Application to the applicable Governmental Authority and pursue the same in good faith and due diligence. If Landlord does not submit the RTS CofO Change Application within ninety (90) days after Landlord is legally permitted to do so (such date, as the same may be extended as provided below, the “Submission Outside Date”), and diligently pursue obtaining the RTS CofO Change Application, then, as liquidated damages (and not a penalty) and Tenant’s

sole and exclusive remedy therefor, Tenant shall receive a credit against the Fixed Rent accruing hereunder in the amount of [***] for each day after the Submission Outside Date until Landlord has so submitted the RTS CofO Change Application; provided that if the RTS CofO Change Application has not been submitted on or prior to the sixtieth (60th) day after the Submission Outside Date, then the credit against Fixed Rent shall be increased after such sixtieth (60th) day to [***] for each day thereafter until Landlord has so submitted the RTS CofO Change Application. Notwithstanding the foregoing, the Submission Outside Date shall be extended by one (1) day for each day that Landlord is actually delayed in submitting the RTS CofO Change Application as a result of Force Majeure (not to exceed ten (10) Business Days), and/or Tenant Delay; it being agreed, however, that any such extension of such dates is not intended to be cumulative (or “double counted”), and that if more than one Tenant Delay or more than one Force Majeure event would actually delay Landlord in completing the applicable portion of Landlord’s Work, but such events and the delays caused by them occur simultaneously, then, to the extent of such simultaneous occurrence, such delays (whether caused by Tenant Delays, by Force Majeure or both) shall be deemed to run concurrently and not consecutively.

D. If (i) the RTS Build-out Work (exclusive of the portion thereof relating to actually obtaining the RTS CofO Change) has not been Substantially Completed (or deemed Substantially Completed) on or before the later to occur of (a) the Target Commencement Date for the 51st Floor Space and (b) the Occupancy Date for the 45th through 50th floors of the Initial Office Portion (such later date, as the same may be extended as provided below, the “RTS Outside Date”) and (ii) solely as a result thereof, Tenant’s Changes to Tenant’s Roof Top Space are actually delayed by reason thereof, then, as liquidated damages (and not a penalty) and Tenant’s sole and exclusive remedy therefor, Tenant shall receive a credit against the Fixed Rent accruing hereunder in the amount of [***] for each day after the RTS Outside Date until the RTS Build-out Work is Substantially Completed (or deemed Substantially Completed); provided that if the RTS Build-out Work has not been Substantially Completed (or deemed Substantially Completed) on or prior to the sixtieth (60th) day after the RTS Outside Date, then the credit against Fixed Rent shall be increased after such sixtieth (60th) day to [***] for each day thereafter until RTS Build-out Work is Substantially Completed (or deemed Substantially Completed). Notwithstanding the foregoing (1) the RTS Outside Date shall be extended by one (1) day for each day that Landlord is actually delayed in performing the RTS Build-out Work as a result of Force Majeure (not to exceed one hundred twenty (120) days), due to Landlord performing any Supplemental RTS Work and/or Tenant Delay; it being agreed, however, that any such extension of such dates is not intended to be cumulative (or “double counted”), and that if more than one Tenant Delay or more than one Force Majeure event would actually delay Landlord in completing the applicable portion of Landlord’s Work, but such events and the delays caused by them occur simultaneously, then, to the extent of such simultaneous occurrence, such delays (whether caused by Tenant Delays, by Force Majeure or both) shall be deemed to run concurrently and not consecutively and (2) Tenant shall not be entitled to any credit under this Section 2.03D at any time that Tenant is entitled to a credit under Section 2.03C hereof.

E. Notwithstanding anything to the contrary contained in this Article 2, Landlord shall complete, correct or repair at its expense in a diligent manner any latent defects relating to Landlord’s Supplemental Work that exist at the time such Landlord’s Supplemental Work is Substantially Completed, provided that Tenant shall have given notice of any such latent defect affecting such Landlord’s Supplemental Work not later than the twelve (12)-month anniversary of the Substantial Completion of such Landlord’s Supplemental Work; provided, however, that upon any such twelve (12)-month anniversary, Landlord shall assign to Tenant, to the extent assignable, without recourse (express or implied), (i) any and all warranties Landlord obtains from any manufacturer of materials, fixtures or equipment incorporated in the Premises as part of such Landlord’s Supplemental Work, and (ii) the guarantee, if any, given to Landlord by the general contractor performing such Landlord’s Supplemental Work guarantying that such

Landlord’s Supplemental Work shall be free from defects for a period of one (1) year after Substantial Completion thereof. Without limiting the foregoing, Landlord shall obtain, at Landlord’s cost, for the benefit of Tenant a commercial reasonable extended warranty with respect to the Private Shuttle Elevator Work such that the warranty therefor is five (5) years.

F. Nothing in Section 2.03E shall (a) result in any redetermination of the Commencement Dates or the Rent Commencement Dates for any Premises Portion, (b) subject Landlord to any claim of damages under this Lease or (c) relieve Landlord of its obligations to perform Punch List Items, complete Landlord’s Work or any of Landlord’s maintenance and repair obligations expressly set forth in this Lease.

2.04 A. Notwithstanding anything to the contrary contained in this Lease and for the avoidance of doubt and without limiting any other rights or remedies that Landlord may have under this Lease, if any Tenant Delay occurs such that there is an actual delay in the Substantial Completion of Landlord’s Work, then (in addition to paying the reasonable out-of-pocket costs Landlord may sustain by reason of such Tenant Delay) Tenant agrees for purposes of determining the date on which Landlord’s Work has been Substantially Completed (and, with respect to Landlord’s Commencement Date Work, the date on which the Commencement Date has occurred for the applicable Premises Portion), the applicable component of Landlord’s Work shall be deemed to have been Substantially Completed (and, with respect to Landlord’s Commencement Date Work, the Commencement Date for the applicable Premises Portion will be) on the date on which Landlord would have been reasonably estimated to have so Substantially Completed such component of Landlord’s Work but for such Tenant Delay (but the foregoing shall not relieve Landlord of any obligation to actually complete Landlord’s Work).

B. For the purposes hereof, “Tenant Delay” shall mean any actual delay beyond the reasonably anticipated completion date for the matter at issue that Landlord may encounter in the performance of Landlord’s obligations under this Lease due to any negligence, omission (where there is a duty to act) or intentional act of any nature of by Tenant, any Tenant Party, any Related Entity or any of their respective agents, employees, contractors, subcontractors or invitees. Tenant Delay will commence as provided below, but, except as otherwise expressly provided herein, in no event shall Tenant Delay commence earlier than the actual activity or occurrence that causes such Tenant Delay and shall continue only through the date that such activity or occurrence shall cease to constitute a Tenant Delay; provided however, (i) all simultaneous delays which constitute a Tenant Delay hereunder shall be deemed to run concurrently and not consecutively and shall not be “double” counted and (ii) Tenant Delay shall include any consequential delays caused by the initial Tenant Delay events which could constitute a Tenant Delay.

C. Tenant shall not be charged for any Tenant Delay unless, except as otherwise expressly provided herein, Landlord shall have delivered notice to Tenant of such Tenant Delay within five (5) Business Days after Landlord has actual knowledge of the circumstances giving rise to such Tenant Delay, which notice shall refer to the circumstances giving rise to such Tenant Delay. If notice is required, the period of Tenant Delay shall not commence until the first Business Day after the date when such notice shall have been delivered to Tenant.

D. Notwithstanding any other provision of this Lease to the contrary, in the event of any simultaneous occurrence of Tenant Delay with a delay occurring as a result of Force Majeure, for the duration of any such simultaneous occurrence such delay shall be deemed to be a Force Majeure delay only.

2.05 A. Subject to the limitations contained herein (including Article 13 hereof), from and after the Commencement Date for any Premises Portion if any Landlord Delay

occurs, and such Landlord Delay causes an actual delay in the Substantial Completion of Tenant’s Initial Work in such Premises Portion beyond the then reasonably estimated scheduled date of such Substantial Completion, then, as liquidated damages, and not as a penalty, and as Tenant’s sole and exclusive remedy therefor, Tenant shall receive a credit against the Fixed Rent payable solely with respect to the Premises Portion(s) to which such Landlord Delay relates in an amount equal to one (1) times the per diem Fixed Rent payable solely with respect to such Premises Portion(s) for each day of such Landlord Delay.

B. “Landlord Delay” shall mean any actual delay occurring after the Commencement Date for the applicable Premises Portion beyond the reasonably anticipated completion date for the matter at issue that Tenant encounters in the performance of Tenant’s Initial Work in such Premises Portion due to any negligence, omission (where there is a duty to act) or intentional act of any nature of Landlord or any Landlord Party or any of their respective agents, employees, contractors, subcontractors or invitees; provided, however, that nothing contained herein shall entitle Tenant to receive a deferment of the Rent Commencement Date for any Premises Portion for a Landlord Delay due to any failure by Landlord to cure a Landlord’s Violation for which Tenant is entitled to receive an abatement pursuant to 13.08B of this Lease. Landlord Delay will commence as provided below, but, except as otherwise expressly provided herein, in no event shall Landlord Delay commence earlier than the actual activity or occurrence that causes such Landlord Delay and shall continue only through the date that such activity or occurrence shall cease to constitute a Landlord Delay; provided, however, (i) all simultaneous delays which constitute a Landlord Delay hereunder shall be deemed to run concurrently and not consecutively and shall not be “double” counted and (ii) Landlord Delay shall include any consequential delays caused by the initial Landlord Delay events which could constitute a Landlord Delay.

C. Landlord shall not be charged for any Landlord Delay unless Tenant shall have delivered notice to Landlord of such Landlord Delay within five (5) Business Days after Tenant has actual knowledge of the circumstances giving rise to such Landlord Delay, which notice shall refer to the circumstances giving rise to such Landlord Delay. If notice is required, the period of Landlord Delay shall not commence until the first Business Day after the date when such notice shall have been delivered to Landlord.

D. Notwithstanding any provision of this Lease to the contrary, in the event of any simultaneous occurrence of Landlord Delay with a delay occurring as a result of Force Majeure, for the duration of any such simultaneous occurrence such delay shall be deemed to be a Force Majeure delay only.

2.06 Notwithstanding anything in this Lease to the contrary, each reference in this Lease to any act or omission resulting in, or being deemed to result in, a Tenant Delay or a Landlord Delay is intended solely as a reminder of such a possible result, it being agreed that such act or omission shall constitute a Tenant Delay or Landlord Delay, as the case may be, only if all of the terms and conditions set forth above in Section 2.04 hereof or Section 2.05 hereof relating to Landlord Delay, as the case may be, shall be fully satisfied.

2.07 A. Tenant acknowledges that notwithstanding the fact that the Occupancy Date may have occurred with respect to any Premises Portion, until Substantial Completion of the Landlord’s Supplemental Work, construction work will be continuing in all or part of the Building common areas and that the performance thereof may disturb Tenant’s quiet enjoyment of, and access to the Demised Premises through, certain Building common areas and to access the Private Shuttle Elevator Work Areas. Until such Substantial Completion, Tenant hereby accepts such conditions as modifications and limitations on its right to use and access the Building common areas and the areas of the Demised Premises in which the Private Shuttle Elevator Work Areas are located. Without limiting the foregoing but subject to the provisions of

Section 2.07B, Landlord shall, subject to the provisions of Section 10.04 hereof, use commercially reasonable efforts to minimize interference with Tenant’s access to and use and occupancy of the Premises in performing Landlord’s Supplemental Work and shall perform all work and repairs diligently and in a workerlike manner and in compliance with Legal Requirements.

B. At or prior to the commencement of the Private Shuttle Elevator Work, Landlord shall construct and maintain a temporary, construction enclosure around certain areas within the Initial Office Space located on the 48th, 49th, and 50th floors of the Building and the 51st Floor Space (and other portions of the 51st floor of the Building) in order to perform the Private Shuttle Elevator Work, which areas are substantially as shown on Exhibit 2.07 annexed hereto and made a part hereof (the “Private Shuttle Elevator Work Areas”). During the performance of the Private Shuttle Elevator Work, Tenant acknowledges that Landlord shall have exclusive access (without the same constituting a Landlord Delay) to the Private Shuttle Elevator Work Areas through the 48th, 49th, 50th and 51st floors of the Building; it being agreed that Landlord shall not have liability to Tenant therefor and the same shall not constitute an actual or constructive eviction and no diminution or abatement of rent or other compensation shall or will be claimed by Tenant as a result thereof, nor shall this Lease or any of the obligations of Tenant be affected or reduced by reason thereof during the period of any such exclusive access. If Tenant interferes in any way (other than to a de minimis extent) with Landlord’s exclusive access as aforesaid during such exclusive period, the same shall, subject to the provisions of Section 2.04 hereof, constitute a Tenant Delay in respect of the Private Shuttle Elevator Work.

2.08 In the event Landlord and Tenant dispute whether any portion of Landlord’s Work has been Substantially Completed or any other matters under this Article 2, including those relating to the occurrence of any Landlord Delay or Tenant Delay, either party may refer such dispute to be resolved in accordance with the procedures set forth in Article 25 hereof.

2.09 Promptly after all of the Commencement Dates and the Rent Commencement Dates are determined, Landlord and Tenant, at either Landlord’s or Tenant’s request, will execute a Milestone Date Agreement with respect to any or each of the above dates. Tenant’s or Landlord’s failure or refusal to sign the same shall in no event affect the determination of such dates or either party’s obligations hereunder.

2.10 Tenant expressly waives any right to rescind this Lease under Section 223-a of the New York Real Property Law or under any present or future statute of similar import then in force and, except as expressly set forth in this Article 2 and Section 13.08B hereof, Tenant further expressly waives the right to recover any damages, direct or indirect, which may result from Landlord’s failure to deliver any Premises Portion by the Target Commencement Date therefor or to grant access to certain portions of the Demised Premises prior to the applicable Commencement Date as permitted hereunder. Tenant agrees that the provisions of this Section 2.10 are intended to constitute “an express provision to the contrary” within the meaning of said Section 223-a.

ARTICLE 3

RENT

3.01 A. During the Term of this Lease, Tenant covenants and agrees to pay to Landlord annual fixed minimum rent (the “Fixed Rent”) in lawful money of the United States, at the following rates:

(i) For the Office Space (exclusive of the 51st Floor Space during the Initial Term):

(a) Subject to Section 3.01B hereof, [***]per RSF of the Initial Office Space (as finally constituted and exclusive of the 51st Floor Space) from the Commencement Date for the applicable Initial Office Space Portion thereof through and including the last day of the month in which occurs the [***] anniversary of the Trigger Rent Commencement Date (the “First Rent Period”), which annual amount for each portion of the Initial Office Space is as follows:

(1) in respect to the 50th floor portion, [***] per annum ([***] per month);

(2) in respect to the 49th floor portion, [***] per annum ([***] per month);

(3) in respect to the 48th floor portion, [***] per annum ([***] per month);

(4) in respect to the 47th floor portion, [***] per annum ([***] per month);

(5) in respect to the 46th floor portion, [***] per annum ([***] per month);

(6) in respect to the 45th floor portion, [***] per annum ([***] per month);

(7) in respect to the 37th floor portion, [***] per annum ([***] per month);

(8) in respect to the 36th floor portion, [***] per annum ([***] per month);

(9) in respect to the 30th floor portion, [***], [***] per annum ([***] per month); and

(10) in respect to the 29th floor portion, [***], [***] per annum ([***] per month); and

(b) [***] per RSF of the Initial Office Space from the day immediately following the last day of the First Rent Period through and including the Stated Expiration Date (the “Second Rent Period”), which annual amount for each portion of the Initial Office Space is as follows: