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10-K – 2026-02-18 – ddog-20251231.htm
9. Commitments and Contingencies The Company enters into non-cancelable purchase commitments and operating leases in the normal course of business. Non-cancelable purchase commitments for business operations and operating lease obligations total $ 1.4 billion and $ 375.2 million, respectively, as of December 31, 2025, due primarily over the next 5 years. Purchase commitments for business operations are primarily related to cloud hosting and other software-based services. The Company also issued long-term debt to finance the business. The principal payments related to the 2029 Notes are $ 1.0 billion. 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 makes matching contributions to the 401(k) plan. For the years ended December 31, 2025, 2024 , and 2023 , the Company incurred expense of $ 9.3 million, $ 8.5 million, and $ 6.3 million for matching contributions, respectively. 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 80 indemnification claims and the unique facts and circumstances involved in each particular provision. To date, losses recorded in the Company’s consolidated statements of operations in connection with the indemnification provisions have not been material. 10. Leases The Company has entered into various non-cancelable operating leases for its facilities expiring through 2036. Certain lease agreements contain an option for the Company to renew a lease for a term of up to three 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. Rent expense for the years ended December 31, 2025, 2024 and 2023 was $ 68.2 million, $ 49.5 million, and $ 43.5 million, respectively. Sub-lease income is recorded as a credit to rent expense. The Company recorded an immaterial amount of sub-lease income for the years ended December 31, 2025, 2024 and 2023. The components of lease cost recognized within the Company’s consolidated statements of operations were as follows (in thousands): Year Ended December 31, 2025 2024 2023 Operating lease cost (1) $ 54,607 $ 42,855 $ 34,670 Short-term lease cost 13,591 6,624 8,797 _____________________ 1) Includes non-cash lease expense of $ 35.5 million, $ 27.3 million, and $ 26.4 million for the years ended December 31, 2025, 2024 and 2023, respectively. Supplemental cash flow information and non-cash activity related to the Company’s operating leases are as follows (in thousands): Year Ended December 31, 2025 2024 2023 Cash paid for amounts included in measurement of lease liabilities $ 33,818 $ 18,538 $ 13,273 Operating lease assets obtained in exchange for new lease liabilities 75,254 75,177 61,594 Maturities of lease liabilities by fiscal year for the Company’s operating leases are as follows (in thousands): Amount 2026 $ 57,189 2027 58,543 2028 49,567 2029 46,516 2030 46,964 Thereafter 116,461 Total lease payments $ 375,240 Less: imputed interest ( 79,684 ) Present value of lease liabilities $ 295,556 As of December 31, 2025, the Company had various operating leases that had not yet commenced, which are excluded from the table above. The operating leases will commence between fiscal years 2026 and 2027 with total undiscounted future payments of $ 245.6 million and a weighted-average lease term of 9.1 years. Weighted average remaining lease term and discount rate for the Company’s operating leases are as follows: 81 December 31, 2025 2024 Weighted average remaining lease term (years) 6.9 6.8 Weighted average discount rate 6.61 % 6.69 % 11. 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): Year Ended December 31, 2025 2024 2023 North America (1) $ 2,433,083 $ 1,874,321 $ 1,487,319 International 994,075 809,954 641,040 Total $ 3,427,158 $ 2,684,275 $ 2,128,359 1) Includes revenue from the United States of $ 2,320.3 million, $ 1,785.5 million, and $ 1,411.0 million for the years ended December 31, 2025, 2024, and 2023, respectively. Other than the United States, no other individual country accounted for 10% or more of total revenue for the years ended December 31, 2025, 2024, or 2023. Accounts Receivable As of December 31, 2025 and 2024, unbilled accounts receivable of approximately $ 127.0 million and $ 77.0 million, respectively, was included in accounts receivable on the Company’s consolidated balance sheets. During the years ended December 31, 2025 and 2024, the Company charged $ 14.1 million and $ 9.3 million, respectively, of accounts receivable deemed uncollectible against the allowance for credit losses. Deferred Revenue and Remaining Performance Obligations Revenue recognized during the years ended December 31, 2025, 2024 and 2023 which was included in the deferred revenue balances at the beginning of each respective period, was $ 953.1 million, $ 759.7 million, and $ 525.5 million. As of December 31, 2025, and 2024, the aggregate transaction price allocated to remaining performance obligations was $ 3,461.2 million and $ 2,273.1 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. Deferred Contract Costs Deferred contract costs on the Company’s consolidated balance sheets were $ 202.7 million and $ 142.7 million as of December 31, 2025 and 2024, respectively. Amortization expense was $ 66.8 million, $ 52.0 million and $ 39.2 million for the years ended December 31, 2025, 2024 and 2023, respectively. 12. 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 82 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 year ended December 31, 2025, 2,223,914 shares of Class B common stock were converted into Class A common stock. As of December 31, 2025, 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 328,117,781 shares of Class A common stock and 24,408,190 shares of Class B common stock were issued and outstanding. As of December 31, 2025 and 2024, the Company had reserved shares of common stock for future issuance as follows: December 31, 2025 2024 Options, RSUs and PSUs outstanding 20,174,662 20,759,819 Shares available for future grants 92,889,210 84,272,083 Shares subject to the employee stock purchase plan 23,194,449 20,342,607 Total shares of common stock reserved for future issuance 136,258,321 125,374,509 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 (“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 December 31, 2025, there were 3,460,167 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 December 31, 2025, there were 92,889,210 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—December 31, 2024 6,953,119 $ 4.55 3.0 $ 961,910 Options granted — — Options exercised ( 3,478,500 ) 1.84 Options forfeited or expired — — Balance—December 31, 2025 3,474,619 $ 7.26 3.0 $ 447,294 Exercisable—December 31, 2025 3,474,619 $ 7.26 3.0 $ 447,294 As of December 31, 2025, there were 14,452 shares of Class A common stock and 3,460,167 shares of Class B common stock issuable upon the exercise of options outstanding. As of December 31, 2024, there were 17,795 shares of Class A common stock and 6,935,324 shares of Class B common stock issuable upon the exercise of options outstanding. Approximately all compensation cost related to unvested stock options was recognized as of December 31, 2025 and December 31, 2024. There were no options granted during the years ended December 31, 2025, 2024 and 2023. The Company received approximately $ 6.4 million, $ 7.4 million and $ 20.9 million in cash proceeds from options exercised during the years ended December 31, 2025, 2024 and 2023, respectively. The intrinsic value of options exercised during the years ended 83 December 31, 2025, 2024 and 2023 was approximately $ 429.8 million, $ 628.8 million and $ 565.9 million, respectively. The aggregate fair value of options vested was insignificant for the years ended December 31, 2025 and 2024, and was $ 12.5 million for the year ended December 31, 2023. Restricted Stock Units, Restricted Stock and Performance Stock Units The following table summarizes the activity for the Company’s unvested RSUs and PSUs: Shares Weighted-Average Fair Value Aggregate Intrinsic Value (in thousands) Unvested and outstanding balance as of December 31, 2024 13,806,700 $ 116.09 $ 1,972,839 Awarded 9,951,174 128.13 Vested ( 5,595,469 ) 113.50 Forfeited/canceled ( 1,462,362 ) 116.34 Unvested and outstanding balance as of December 31, 2025 16,700,043 $ 124.10 $ 2,271,039 The Company issued a total of 770,044 shares of restricted Class A common stock in connection with acquisitions, net of shares retired, during the year ended December 31, 2025, which are subject to service-based vesting conditions which do not exceed four years from the respective grant dates. Total compensation cost related to unvested RSUs and restricted shares of common stock not yet recognized was approximately $ 1,717.2 million and $ 1,378.1 million as of December 31, 2025 and December 31, 2024, respectively. The weighted-average period over which the unvested RSUs and restricted shares of common stock will be recognized is 2.8 years as of December 31, 2025 and December 31, 2024. Total compensation cost related to unvested PSUs not yet recognized was approximately $ 82.8 million and $ 52.3 million as of December 31, 2025 , and December 31, 2024 , respectively. The weighted-average period over which the unvested PSUs will be recognized is 1.3 years and 1.3 years as of December 31, 2025, and December 31, 2024, respectively . Stock-Based Compensation Stock-based comp ensation was included in the consolidated statement of operations as follows (in thousands): Year Ended December 31, 2025 2024 2023 Cost of revenue $ 29,729 $ 26,221 $ 17,578 Research and development 469,526 363,301 313,096 Sales and marketing 156,472 122,079 101,937 General and administrative 94,944 58,735 49,689 Stock-based compensation, net of amounts capitalized 750,671 570,336 482,300 Capitalized stock-based compensation 23,454 13,152 13,597 Total stock-based compensation $ 774,125 $ 583,488 $ 495,897 Employee Stock Purchase Plan In September 2019, the Board adopted and approved the 2019 ESPP, which became effective on the date of the final prospectus for the Company’s 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. Historically offering periods have been approximately 6 months. 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. 84 The Company recognized $ 20.8 million, $ 15.3 million, and $ 16.0 million of stock-based compensation expense related to the ESPP during the years ended December 31, 2025, 2024, and 2023, respectively. As of December 31, 2025 and 2024, $ 11.9 million and $ 8.3 million, respectively, has been withheld on behalf of employees for a future purchase under the ESPP due to the timing of payroll deductions. During the years ended December 31, 2025, 2024, and 2023 , the Company issued 569,345 , 449,249 , and 517,430 shares of Class A common stock under the ESPP, respectively. As of December 31, 2025, 23,194,449 shares of Class A common stock remain available for grant under the ESPP. Total compensation cost related to the ESPP not yet recognized was approximately $ 11.3 million and $ 7.0 million as of December 31, 2025 and 2024, respectively. The weighted average period over which this compensation cost will be recognized is 0.4 years as of December 31, 2025 and 2024, respectively. 13. Interest Income and Other Income, Net Interest income and other income, net consist of the following (in thousands): Year Ended December 31, 2025 2024 2023 Interest income $ 194,424 $ 155,321 $ 103,459 Other (loss) income, net ( 11,971 ) 1,403 ( 3,458 ) Interest income and other income, net $ 182,453 $ 156,724 $ 100,001 85 14. Income Taxes Income Taxes—For financial reporting purposes, income before income taxes, includes the following components (in thousands): Year Ended December 31, 2025 2024 2023 Domestic $ 88,617 $ 178,694 $ 42,811 Foreign 38,404 25,246 17,424 Income before income taxes $ 127,021 $ 203,940 $ 60,235 Total income taxes allocated to operations for the years ended December 31, 2025, 2024 and 2023 were as follows (in thousands): 2025 Current Deferred Total Federal $ ( 2,938 ) $ — $ ( 2,938 ) State 408 — 408 Foreign 23,050 ( 1,240 ) 21,810 Total $ 20,520 $ ( 1,240 ) $ 19,280 2024 Current Deferred Total Federal $ 4,690 $ — $ 4,690 State 3,321 — 3,321 Foreign 14,586 ( 2,403 ) 12,183 Total $ 22,597 $ ( 2,403 ) $ 20,194 2023 Current Deferred Total Federal $ ( 261 ) $ — $ ( 261 ) State 2,551 — 2,551 Foreign 10,262 ( 885 ) 9,377 Total $ 12,552 $ ( 885 ) $ 11,667 Tax Rate Reconciliation—Income tax expense was $ 19.3 million for the year ended December 31, 2025, and differed from the amount computed by applying the U.S. federal statutory income tax rate of 21% to pretax income from operations. The reconciliation of these amounts is presented in the table below, which has been prepared in accordance with the disclosure guidance of ASU 2023-09 (in thousands): 86 Year Ended December 31, 2025 Amount Percent U.S. Federal Statutory Tax Rate $ 26,674 21.00 % State and Local Income Taxes, Net of Federal Income Tax Effect (1) 323 0.25 % Foreign Tax Effects Brazil Income tax from withholding 10,077 7.93 % Other 3,092 2.43 % Effect of Cross-Border Tax Laws Global intangible low-taxed income (GILTI) 2,131 1.68 % Other 1,010 0.80 % Tax Credits U.S. R&D tax credits ( 24,537 ) ( 19.32 ) % U.S. Foreign tax credits ( 19,019 ) ( 14.97 ) % Changes in Valuation Allowances 66,813 52.60 % Nontaxable or Nondeductible items Section 162(m) adjustment 16,680 13.13 % Share-based compensation Other non-deductible share-based payments 4,802 3.78 % Non-US share-based payment disallowance 30,902 24.33 % Deductible share based-payments ( 100,215 ) ( 78.90 ) % Meals and entertainment 3,182 2.51 % Other 593 0.47 % Other Adjustments ( 3,228 ) ( 2.54 ) % Effective Tax Rate $ 19,280 15.18 % (1) MN & TX state taxes contribute to the majority (greater than 50 percent) of the tax effect in this category for 2025 The following table is a reconciliation of the U.S. federal statutory rate of 21% to the Company’s effective rate for the years ended December 31, 2024 and 2023 in accordance with the guidance prior to the adoption of ASU 2023-09: Year Ended December 31, 2024 2023 Income tax expense at federal statutory rate $ 42,827 $ 12,650 Meals and entertainment 2,782 1,957 State taxes (net of federal benefit) 2,644 1,090 Net change in valuation allowance 86,556 68,770 Uncertain tax positions ( 60 ) ( 94 ) U.S. tax costs on international operations ( 4,729 ) ( 1,920 ) Prior year NOL balance adjustment 2,433 — Foreign taxes 6,280 5,106 Share based compensation deductions ( 123,773 ) ( 80,119 ) Section 162(m) adjustment 17,435 10,335 Return to provision ( 27 ) ( 3,335 ) U.S. R&D tax credits ( 14,119 ) ( 2,973 ) Other 1,945 200 Total $ 20,194 $ 11,667 87 Income Tax Payments Disclosed below is a summary of income taxes, net of refunds, paid by individual jurisdictions equaling 5% or more of the total for the year ended December 31, 2025, presented in accordance with the disclosure requirements of ASU 2023-09 (in thousands): Income taxes paid United States - Federal $ 4,049 United States - State and local 1,797 Foreign Brazil 5,949 Netherlands 968 Other 4,886 Total income taxes paid $ 17,649 For the year ended December 31, 2025, 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. The Company is subject to tax laws in the United States and numerous foreign jurisdictions. The United States and many international legislative and regulatory bodies continually propose and enact legislation that could significantly impact how U.S. multinational corporations are taxed. The Company is closely monitoring proposed legislation and its potential impact. On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the United States. The OBBBA permanently extends certain provisions of the Tax Cuts and Jobs Act, including 100% bonus depreciation for certain qualified property, and reverses the requirement to capitalize and amortize domestic research and experimentation (“R&E”) expenses. As a result, for tax years beginning after December 31, 2024, taxpayers may deduct such expenses in the year incurred. The legislation also introduced an election to accelerate any unamortized domestic R&E expenditures over a one- or two-year period beginning with the 2025 tax year and includes modifications to the international tax framework. The OBBBA also includes modifications to the international tax framework. Future guidance from the Internal Revenue Service and other tax authorities with respect to such legislation may affect us, and certain aspects thereof could be repealed or modified in future legislation. In accordance with ASC 740, Accounting for Income Taxes, the Company has reflected the effects of the OBBBA in its financial statements for the year ended December 31, 2025. The enactment of the OBBBA reduced the Company’s U.S. income tax expense for 2025. The legislation did not impact the Company’s U.S. net deferred tax assets or liabilities, as a full valuation allowance continues to be maintained against those balances. 88 Components of Deferred Taxes—The tax effects of temporary differences that give rise to the deferred tax assets and deferred tax liabilities at December 31, 2025 and 2024 are presented below (in thousands): December 31, 2025 2024 Deferred tax assets: Net operating losses $ 115,543 $ 22,804 U.S. R&D tax credits net of uncertain tax positions 131,656 102,903 Stock-based compensation 68,230 55,275 Section 174 capitalization 220,486 285,198 Lease liability 58,239 45,865 Other 61,311 57,042 Total deferred tax assets $ 655,465 $ 569,087 Less: valuation allowance ( 543,147 ) ( 488,866 ) Deferred tax assets, net of valuation allowance $ 112,318 $ 80,221 Deferred tax liabilities: Commissions ( 50,111 ) ( 35,593 ) Right of use asset ( 39,814 ) ( 33,554 ) Fixed Assets ( 16,742 ) ( 7,261 ) Total deferred tax liabilities $ ( 106,667 ) $ ( 76,408 ) Deferred tax assets, net $ 5,651 $ 3,813 The Company accounts for income taxes using an asset and liability method and deferred income tax assets and liabilities are measured using the currently enacted tax rates that apply to taxable income in effect for the years in which those tax assets and liabilities are expected to be realized or settled. The Company’s deferred tax assets and liabilities consist primarily of basis differences for financial reporting and tax purposes of certain assets and liabilities as well as income tax attributes. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Based upon the weight of all available evidence, which includes the historical operating performance and the Company's cumulative losses when considering permanent tax adjustments, management does not believe as of December 31, 2025 and 2024 that it is more likely than not that the Company will realize its U.S. deferred tax assets. As a result, a valuation allowance of $ 543.1 million and $ 488.9 million has been provided at December 31, 2025 and 2024, respectively. The valuation allowance changed by $ 54.3 million and $ 167.3 million at December 31, 2025 and 2024, respectively. At December 31, 2025, the Company has net operating loss carryforwards for federal tax purposes of approximately $ 340.2 million, which is available to offset federal taxable income. For the year ending December 31, 2024, the Company utilized all of its net operating loss carryforwards for federal tax purposes except for acquired losses, offset against its federal taxable income for the year. The Company also has historically acquired losses for which it is evaluating the feasibility of future utilization under IRC section 382. U.S. Federal net operating losses generated after December 31, 2017 have an indefinite carryforward period but are subject to an 80 % of taxable income limitation after December 31, 2020. The Company has approximately $ 474.2 million and $ 263.0 million of net operating loss carryforwards as of December 31, 2025 and 2024, respectively for various state tax purposes. The state net operating loss carryforwards will begin to expire in 2028, if not utilized. Generally, the utilization of net operating losses may be subject to an annual limitation provided for in the Internal Revenue Code of 1986, as amended, under Section 382 and similar state codes. The Company has prepared an analysis to determine whether its net operating losses may be limited under such provisions. It has been determined that any annual limitation would not result in the expiration of net operating loss carryforwards before utilization. In general, it is the practice and intention of the Company to reinvest the earnings of its non-U.S. subsidiaries in those operations. Historically, the Company has not made a provision for U.S. income tax with respect to accumulated earnings of foreign subsidiaries where the foreign investment of such earnings is essentially permanent in duration. Generally, such amounts would become subject to U.S. taxation upon the remittance of dividends and under certain other circumstances. The Company has not provided U.S. taxes on unremitted earnings of its foreign subsidiaries as it asserts permanent reinvestment on any accumulated earnings and profits. 89 Consistent with the provisions of ASC 740, Income Taxes, the Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The following table shows the changes in the gross amount of unrecognized tax benefits as of December 31, 2025, 2024 and 2023 (in thousands): December 31, 2025 2024 2023 Beginning balance $ 25,729 $ 59 $ 106 Increase of current year tax positions 18,156 25,729 — (Decrease) of prior year tax positions due to lapse of statute of limitations — ( 59 ) ( 47 ) Ending balance $ 43,885 $ 25,729 $ 59 The total amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate would be $ 0.0 million for the year ended December 31, 2025 due to the excess of deferred tax attributes. The Company’s policy for classifying interest and penalties associated with unrecognized income tax benefits is to include such items in income tax expense. The total amount of interest and penalties associated with unrecognized income tax benefits is $ 0.0 million and $ 0.0 million for the years ended December 31, 2025 and 2024. The Company files income tax returns in the U.S. federal jurisdiction, various state jurisdictions and in various international jurisdictions. Tax years 2022 and forward generally remain open for examination for federal and state tax purposes. To the extent utilized in future years’ tax returns, net operating loss carryforwards generated in 2025 will remain subject to examination until the respective tax year is closed. 90 15. Net Income Per Share Basic and diluted net 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 equity in the Company. Basic and diluted net 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 income per share of Class A common stock, the undistributed earnings are equal to net income for that computation. 91 The following table presents the calculation of basic and diluted net income per share (in thousands, except per share data): Year Ended December 31, 2025 2024 2023 Class A Class B Class A Class B Class A Class B Basic net income per share: Numerator: Net income $ 99,843 $ 7,898 $ 169,503 $ 14,243 $ 44,684 $ 3,884 Denominator: Weighted average shares used in calculating net income per share, basic 321,848 25,461 310,113 26,059 298,116 25,918 Basic net income per share $ 0.31 $ 0.31 $ 0.55 $ 0.55 $ 0.15 $ 0.15 Diluted net income per share: Numerator: Allocation of distributed income, net of interest expense and related tax $ 103,313 $ 8,173 $ 173,585 $ 14,586 $ 44,684 $ 3,884 Reallocation of undistributed income as a result of conversion of Class B to Class A shares 8,173 — 14,586 — 3,884 — Allocation of undistributed income $ 111,486 $ 8,173 $ 188,171 $ 14,586 $ 48,568 $ 3,884 Denominator: Number of shares used in basic calculation 321,848 25,461 310,113 26,059 298,116 25,918 Weighted average effect of diluted securities: Conversion of Class B to Class A common shares outstanding 25,461 — 26,059 — 25,918 — Employee stock options 4,432 — 9,128 — 14,828 — Employee stock purchase plan 44 — 25 — 15 — Restricted stock units and performance stock units 5,071 — 4,701 — 2,731 — Unvested restricted stock in connection with acquisitions 383 — 327 — 586 — Shares issuable upon conversion of the 2025 Notes 1,637 — 8,032 — 8,098 — Shares issuable upon conversion of the 2029 Notes 4,596 — 251 — — — Number of shares used in diluted calculation 363,472 25,461 358,636 26,059 350,292 25,918 Diluted net income per share $ 0.31 $ 0.32 $ 0.52 $ 0.56 $ 0.14 $ 0.15 Potentially dilutive securities that were not included in the diluted per share calculations because they would be anti-dilutive were as follows (in thousands): Year Ended December 31, 2025 2024 2023 Shares subject to outstanding stock options and RSUs 648 350 2,248 Unvested early exercised stock options and restricted shares of common stock — — 31 Shares subject to the employee stock purchase plan — 15 — Total 648 365 2,279 92 The Company uses the if-converted method for calculating any potential dilutive effect of the conversion options embedded in the Notes on diluted net income per share. The Company entered into Capped Calls in connection with the issuance of the Notes. The effect of the Capped Calls was 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 Notes. 93 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None. Item 9A. 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 December 31, 2025. Based on the evaluation of our disclosure controls and procedures as of December 31, 2025, 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. Management's Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate “internal control over financial reporting,” as defined in Rule 13a-15(f) and Rule 15d-15(f) under the Exchange Act. Our management conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2025 based on the criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on the results of its evaluation, management concluded that our internal control over financial reporting was effective as of December 31, 2025. Our independent registered public accounting firm, Deloitte & Touche LLP, has issued an auditors’ report on the effectiveness of our internal control over financial reporting, which is included in Item 8 of this Annual Report on Form 10-K. 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 Rule 15d15(d) of the Exchange Act that occurred during the fiscal quarter ended December 31, 2025 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. 94 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and the Board of Directors of Datadog, Inc. Opinion on Internal Control over Financial Reporting We have audited the internal control over financial reporting of Datadog, Inc. and its subsidiaries (the “Company”) as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2025, of the Company and our report dated February 18, 2026, expressed an unqualified opinion on those financial statements. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Deloitte & Touche LLP New York, New York February 18, 2026 95 Item 9B. Other Information Trading Arrangements During the three months ended December 31, 2025 , the Company’s directors and officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted written plans intended to satisfy the affirmative defense conditions of Securities Exchange Act Rule 10b5-1(c) for the sale of the Company’s securities as set forth in the table below. Name Position Action Date Total Shares of Class A Common Stock to be Sold Expiration Date Julie Richardson Director Adoption November 7, 2025 4,865 December 31, 2026 Amit Agarwal (1) Director Adoption December 8, 2025 200,000 March 19, 2027 Kerry Acocella General Counsel and Secretary Adoption December 11, 2025 69,379 (2) December 31, 2026 Sean Walters Chief Revenue Officer Adoption December 12, 2025 183,046 (2) June 30, 2027 David Obstler Chief Financial Officer Adoption December 14, 2025 75,000 March 31, 2027 Olivier Pomel Chief Executive Officer Modification (3) December 15, 2025 1,525,692 (4) February 18, 2027 (1) The shares will be sold under a Rule 10b5-1 trading plan by the Agarwal 2018 Family Trust. (2) The actual number of shares that will be sold under the Rule 10b5-1 trading plan will be reduced by the number of shares sold pursuant to the Company’s election under its equity incentive plans to require the satisfaction of tax withholding obligations realized upon the vesting of RSUs and PSUs to be funded by a sell-to-cover transaction. The number of Company shares to be sold to satisfy the Company’s tax withholding obligation is not known at this time as it is dependent on future events, including the future trading price of the Company’s shares. (3) Represents a modification under Rule 10b5-1(c)(1)(iv) of a Rule 10b5-1 trading plan adopted on September 15, 2025, which did not result in any change to the total number of shares to be sold under the plan. (4) Approximately 509,000 shares will be sold in sell-to-cover transactions intended to satisfy tax withholding obligations and exercise costs realized upon the exercise of stock options. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. Not applicable. 96 PART III Item 10. Directors, Executive Officers and Corporate Governance The information required by this Item (other than as set forth below) will be included in the proxy statement for our 2026 annual meeting of stockholders to be filed with the SEC within 120 days after the end of our fiscal year ended December 31, 2025, or the 2026 Proxy Statement, and is incorporated herein by reference. We have adopted a Code of Conduct that applies to all our employees, officers and directors. The Code of Conduct is available on our website at www.investors.datadoghq.com. The nominating and corporate governance committee of our board of directors is responsible for overseeing the Code of Conduct and must approve any waivers of the Code of Conduct for employees, executive officers and directors. We expect that any amendments to the Code of Conduct, or any waivers of its requirements, will be disclosed on our website, as required by applicable law or the listing standards of Nasdaq. Our website is not incorporated by reference into this Annual Report on Form 10-K, and you should not consider information on our website to be part of this Annual Report on Form 10-K. Item 11. Executive Compensation The information required by this Item will be included in the 2026 Proxy Statement and is incorporated herein by reference. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The information required by this Item will be included in the 2026 Proxy Statement and is incorporated herein by reference. Item 13. Certain Relationships and Related Transactions, and Director Independence The information required by this Item will be included in the 2026 Proxy Statement and is incorporated herein by reference. Item 14. Principal Accounting Fees and Services The information required by this Item will be included in the 2026 Proxy Statement and is incorporated herein by reference. 97 PART IV Item 15. Exhibits, Financial Statement Schedules (a) Documents filed as part of this report (1) All financial statements Index to Consolidated Financial Statements Page Report of Independent Registered Public Accounting Firm 60 Consolidated Balance Sheets as of December 31, 202 5 and 202 4 62 Consolidated Statements of Operations for the years ended December 31, 202 5 , 202 4 and 202 3 63 Consolidated Statements of Comprehensive Income for the years ended December 31, 202 5 , 202 4 and 202 3 64 Consolidated Statements of Stockholders’ Equity for the years ended December 31, 202 5 , 202 4 and 202 3 65 Consolidated Statements of Cash Flows for the years ended December 31, 202 5 , 202 4 and 202 3 66 Notes to Consolidated Financial Statements 67 (2) Financial Statement Schedules All financial schedules have been omitted because the required information is either presented in the consolidated financial statements filed as part of this Annual Report on Form 10-K or the notes thereto or is not applicable or required. (3) 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. 10-Q 001-39051 3.2 August 9, 2023 4.1 Form of Class A Common Stock Certificate. S-1/A 333-233428 4.1 September 9, 2019 4.2 Description of Securities. 10-K 001-39051 4.2 February 25, 2020 4.3 Indenture, dated December 12, 2024, between Datadog, Inc. and U.S. Bank National Association, as Trustee . 8-K 001-39051 4.1 December 12, 2024 4.4 Form of Global Note representing Datadog, Inc.’s 0.00% Convertible Senior Notes due 2029 . 8-K 001-39051 4.1 December 12, 2024 10.1# Datadog, Inc. 2012 Equity Incentive Plan, and terms of agreements thereunder. S-1 333-233428 10.2 August 23, 2019 10.2# Datadog, Inc. 2019 Equity Incentive Plan and terms of agreements thereunder. S-1/A 333-233428 10.3 September 9, 2019 10.3# Datadog, Inc. 2019 Employee Stock Purchase Plan. S-1/A 333-233428 10.4 September 9, 2019 10.4# Performance Stock Units (PSU) Grant Notice and Award Agreement. 10-Q 001-39051 10.1 August 8, 2022 10.5# Form of Indemnity Agreement entered into by and between Datadog, Inc. and each director and executive officer. S-1/A 333-233428 10.5 September 9, 2019 98 10.6# Offer Letter, by and between Datadog, Inc. and Olivier Pomel, dated May 20, 2011. S-1/A 333-233428 10.6 September 9, 2019 10.7# Offer Letter, by and between Datadog, Inc. and David Obstler, dated August 28, 2018. S-1/A 333-233428 10.7 September 9, 2019 10.8# Offer Letter, by and between Datadog, Inc. and Alexis Lê-Quôc, dated May 20, 2011. 10-Q 001-39051 10.1 May 7, 2021 10.9# Offer Letter, by and between Datadog, Inc. and Adam Blitzer, dated April 23, 2021. 10-Q 001-39051 10.1 May 6, 2022 10.10# Amended Offer Letter, by and between Datadog, Inc. and Sean Walters, dated January 5, 2022 . 10-K 001-39051 10.12 February 24, 2023 10.11# Amended Offer Letter, by and between Datadog, Inc. and Yanbing Li, dated June 27, 2024 . 10-K 001-39051 10.12 February 20, 2025 10.12 Agreement of Sub-Sub-Sublease, by and between Datadog, Inc. and Ideeli Inc., dated April 14, 2016. S-1 333-233428 10.9 August 23, 2019 10.13 Agreement of Sub-Sublease, by and between Datadog, Inc. and BT Americas Inc., dated September 18, 2017. S-1 333-233428 10.10 August 23, 2019 10.14# Amended and Restated Non-Employee Director Compensation Policy. 10-Q 001-39051 10.1 August 9, 2023 10.15# Form of Change of Control and Severance Agreement. S-1/A 333-233428 10.13 September 9, 2019 10.16 Form of Confirmation for Capped Call Transaction. 8-K 001-39051 99.1 December 12, 2024 10.17 Agreement of Sublease, by and between Datadog, Inc. and Clearbridge Investments, LLC, dated July 9, 2020. 10-K 001-39051 10.14 March 1, 2021 10.18 Lease, by and between Datadog, Inc. and FC Eighth Ave., LLC, dated July 28,2022. 10-Q 001-39051 10.2 August 8, 2022 19.1 Insider Trading Policy . 10-K 001-39051 19.1 February 20, 2025 21.1 List of Subsidiaries of Datadog, Inc. X 23.1 Consent of Deloitte & Touche LLP, independent registered public accounting firm. X 24.1 Power of Attorney (incorporated by reference to the signature pages of this Annual Report on Form 10-K). X 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. X 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. X 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. X 99 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. X 97.1* Policy Relating to Recovery of Erroneously Awarded Compensation. 10-K 001-39051 97.1 February 23, 2024 101.INS XBRL Instance Document X 101.SCH XBRL Taxonomy Extension Schema Document X 101.CAL XBRL Taxonomy Extension Calculation Linkbase Document X 101.DEF XBRL Taxonomy Extension Definition Linkbase Document X 101.LAB XBRL Taxonomy Extension Label Linkbase Document X 101.PRE XBRL Taxonomy Extension Presentation Linkbase Document X # Indicates management contract or compensatory plan. * 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. Item 16. Form 10-K Summary None. 100 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: February 18, 2026 By: /s/ Olivier Pomel Name: Olivier Pomel Title: Chief Executive Officer and Director POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Olivier Pomel and Alexis Lê-Quôc, and each one of them, as his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in their name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. 101 Signature Title Date /s/ Olivier Pomel Chief Executive Officer and Director (Principal Executive Officer) February 18, 2026 Olivier Pomel /s/ David Obstler Chief Financial Officer (Principal Financial and Accounting Officer) February 18, 2026 David Obstler /s/ Alexis Le-Qu ô c Chief Technology Officer and Director February 18, 2026 Alexis Le-Quôc /s/ Amit Agarwal Director February 18, 2026 Amit Agarwal /s/ Michael Callahan Director February 18, 2026 Michael Callahan /s/ Titi Cole Director February 18, 2026 Titi Cole /s/ Dev Ittycheria Director February 18, 2026 Dev Ittycheria /s/ Matthew Jacobson Director February 18, 2026 Matthew Jacobson /s/ Julie Richardson Director February 18, 2026 Julie Richardson /s/ Shardul Shah Director February 18, 2026 Shardul Shah /s/ Ami Vora Director February 18, 2026 Ami Vora 102