Item 1. FINANCIAL STATEMENTS

DATADOG, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

(unaudited)

			March 31, 2025						December 31, 2024
ASSETS
CURRENT ASSETS:
Cash and cash equivalents			$	1,079,854					$	1,246,983
Marketable securities			3,369,820						2,942,076
Accounts receivable, net of allowance for credit losses of $17,707 and $16,302 as of March 31, 2025 and December 31, 2024, respectively			490,172						598,919
Deferred contract costs, current			58,832						56,095
Prepaid expenses and other current assets			77,660						67,042
Total current assets			5,076,338						4,911,115
Property and equipment, net			249,916						226,970
Operating lease assets			203,074						172,512
Goodwill			361,738						360,381
Intangible assets, net			2,626						3,711
Deferred contract costs, non-current			90,501						86,573
Other assets			26,188						24,077
TOTAL ASSETS			$	6,010,381					$	5,785,339
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable			$	98,442					$	107,731
Accrued expenses and other current liabilities			138,238						127,136
Operating lease liabilities, current			34,228						31,970
Convertible senior notes, net, current			634,780						634,023
Deferred revenue, current			949,135						961,853
Total current liabilities			1,854,823						1,862,713
Operating lease liabilities, non-current			227,974						196,905
Convertible senior notes, net, non-current			980,314						979,282
Deferred revenue, non-current			21,560						22,693
Other liabilities			9,036						9,383
Total liabilities			3,093,707						3,070,976
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 March 31, 2025 and December 31, 2024; 319,232,516 and 316,787,538 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively			3						3
Class B common stock, $0.00001 par value per share; 310,000,000 shares authorized as of March 31, 2025 and December 31, 2024; 25,678,293 and 25,331,244 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively			—						—
Additional paid-in capital			2,860,643						2,689,013
Accumulated other comprehensive income (loss)			1,338						(4,701)
Retained earnings			54,690						30,048
Total stockholders’ equity			2,916,674						2,714,363
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY			$	6,010,381					$	5,785,339

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 March 31,
			2025						2024
Revenue			$	761,553					$	611,253
Cost of revenue			157,628						110,098
Gross profit			603,925						501,155
Operating expenses:
Research and development			341,061						269,988
Sales and marketing			214,291						173,881
General and administrative			60,993						45,290
Total operating expenses			616,345						489,159
Operating (loss) income			(12,420)						11,996
Other income:
Interest expense			(2,963)						(1,374)
Interest income and other income, net			47,179						35,563
Other income, net			44,216						34,189
Income before provision for income taxes			31,796						46,185
Provision for income taxes			7,154						3,554
Net income			$	24,642					$	42,631
Net income attributable to common stockholders			$	24,642					$	42,631
Basic net income per share			$	0.07					$	0.13
Diluted net income per share			$	0.07					$	0.12
Weighted average shares used in calculating basic net income per share:			343,097						331,806
Weighted average shares used in calculating diluted net income per share:			363,078						355,979

See accompanying notes to condensed consolidated financial statements.

DATADOG, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

(unaudited)

			Three Months Ended March 31,
			2025						2024
Net income			$	24,642					$	42,631
Other comprehensive income (loss):
Foreign currency translation adjustments			3,106						(2,264)
Unrealized gain (loss) on available-for-sale marketable securities			2,933						(3,218)
Other comprehensive income (loss)			6,039						(5,482)
Comprehensive income			$	30,681					$	37,149

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) Income						Retained Earnings						Total Stockholders' Equity
Shares						Amount
BALANCE—December 31, 2024			342,118,782						$	3					$	2,689,013					$	(4,701)					$	30,048					$	2,714,363
Issuance of common stock upon exercise of stock options			1,316,133						—						1,703						—						—						1,703
Vesting of restricted and performance stock units			1,475,894						—						—						—						—						—
Stock-based compensation			—						—						169,927						—						—						169,927
Change in accumulated other comprehensive income			—						—						—						6,039						—						6,039
Net income			—						—						—						—						24,642						24,642
BALANCE—March 31, 2025			344,910,809						$	3					$	2,860,643					$	1,338					$	54,690					$	2,916,674

			Class A and Class B Common Stock												Additional Paid-in Capital						Accumulated Other Comprehensive Loss						(Accumulated Deficit) Retained Earnings						Total Stockholders' Equity (Deficit)
Shares						Amount
BALANCE—December 31, 2023			331,079,746						$	3					$	2,181,267					$	(2,218)					$	(153,698)					$	2,025,354
Issuance of common stock upon exercise of stock options			1,340,644						—						2,173						—						—						2,173
Vesting of restricted and performance stock units			1,545,200						—						—						—						—						—
Stock-based compensation			—						—						137,679						—						—						137,679
Change in accumulated other comprehensive loss			—						—						—						(5,482)						—						(5,482)
Net income			—						—						—						—						42,631						42,631
BALANCE—March 31, 2024			333,965,590						$	3					$	2,321,119					$	(7,700)					$	(111,067)					$	2,202,355

See accompanying notes to condensed consolidated financial statements

DATADOG, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

			Three Months Ended March 31,
			2025						2024
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income			$	24,642					$	42,631
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			11,255						12,895
Accretion of discounts on marketable securities			(10,370)						(14,126)
Amortization of issuance costs			1,819						850
Amortization of deferred contract costs			14,853						11,844
Stock-based compensation, net of amounts capitalized			164,265						135,033
Non-cash lease expense			8,389						6,810
Allowance for credit losses on accounts receivable			4,520						2,732
(Gain) loss on disposal of property and equipment			(145)						43
Changes in operating assets and liabilities:
Accounts receivable, net			104,227						55,490
Deferred contract costs			(21,519)						(12,636)
Prepaid expenses and other current assets			(10,263)						(14,075)
Other assets			(1,217)						2,614
Accounts payable			(10,712)						(17,122)
Accrued expenses and other liabilities			5,648						(7,433)
Deferred revenue			(13,851)						6,720
Net cash provided by operating activities			271,541						212,270
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of marketable securities			(970,302)						(637,351)
Maturities of marketable securities			555,938						401,666
Proceeds from sale of marketable securities			(76)						—
Purchases of property and equipment			(8,748)						(14,158)
Capitalized software development costs			(18,402)						(11,365)
Cash paid for acquisition of businesses; net of cash acquired			(1,818)						—
Net cash used in investing activities			(443,408)						(261,208)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options			1,673						2,191
Repayments of 2025 Convertible Senior Notes			(20)						—
Net cash provided by financing activities			1,653						2,191
Effect of exchange rate changes on cash and cash equivalents			3,085						(1,374)
NET DECREASE IN CASH AND CASH EQUIVALENTS			(167,129)						(48,121)
CASH AND CASH EQUIVALENTS—Beginning of period			1,246,983						330,339
CASH AND CASH EQUIVALENTS—End of period			$	1,079,854					$	282,218
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for income taxes			$	3,658					$	4,647
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Accrued property and equipment purchases			$	4,542					$	813
Stock-based compensation included in capitalized software development costs			$	5,662					$	2,646
Acquisition holdback			$	50					$	—

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 observability and security platform for cloud applications. The Company’s SaaS platform integrates and automates infrastructure monitoring, application performance monitoring, log management, user experience monitoring, cloud security, and many other capabilities to provide unified, real-time observability and security 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 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, 2025 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, 2024, as filed with the SEC on February 20, 2025 (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.

In January 2025, the Company completed an assessment of the useful life of its capitalized software development costs, resulting in an increase in the estimated useful life of capitalized software development costs from two to three years. This change in accounting estimate was effective beginning fiscal year 2025.

Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued ASU No. 2023-09**,** Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU No. 2023-09”), which intends to increase the transparency of income tax disclosures, particularly the rate reconciliation table and disclosures about income taxes paid. For public business entities, it is effective for annual periods beginning after December 15, 2024, and interim periods beginning after December 15, 2025, with early adoption permitted. The Company has not early adopted this standard and is evaluating the impact of it on its consolidated financial statements for the year ended December 31, 2025.

In November 2024, the FASB issued ASU No. 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40) ("ASU No. 2024-03"), which requires disaggregated disclosure of income statement expenses for public business entities. The ASU does not change the expense captions an entity presents on the face of the income statement; rather, it requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. For public business entities, it is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The amendments in this ASU should be applied prospectively, however, public business entities are permitted to apply the amendments in the ASU retrospectively, The Company is currently evaluating the impact of the adoption of this standard on its 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 March 31, 2025 and December 31, 2024 (in thousands):

			March 31, 2025
			Amortized Cost						Unrealized Gain						Unrealized Losses						Fair Value
Corporate debt securities			$	2,339,091					$	5,659					$	(695)					$	2,344,055
Commercial paper			419,851						71						(21)						419,901
U.S. government treasury securities			398,871						641						(293)						399,219
Certificates of deposit			205,100						53						(3)						205,150
U.S. government agency securities			1,490						5						—						1,495
Marketable securities			$	3,364,403					$	6,429					$	(1,012)					$	3,369,820

			December 31, 2024
			Amortized Cost						Unrealized Gain						Unrealized Losses						Fair Value
Corporate debt securities			$	1,893,599					$	4,243					$	(1,801)					$	1,896,041
U.S. government treasury securities			466,765						484						(789)						466,460
Commercial paper			390,058						241						(16)						390,283
Certificates of deposit			187,711						113						(22)						187,802
U.S. government agency securities			1,490						—						—						1,490
Marketable securities			$	2,939,623					$	5,081					$	(2,628)					$	2,942,076

As of March 31, 2025, the fair values of available-for-sale marketable securities, by remaining contractual maturity, were as follows (in thousands):

Due within one year			$	2,020,748
Due in one year through five years			1,349,072
Total			$	3,369,820

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 March 31, 2025 and December 31, 2024, and indicate the fair value hierarchy of the valuation inputs utilized to determine such fair value (in thousands):

			Fair Value Measurement as of March 31, 2025
			Level 1						Level 2						Level 3						Total
Financial Assets:
Cash equivalents:
Money market funds			$	714,073					$	—					$	—					$	714,073
Commercial paper			—						296,544						—						296,544
Certificates of deposit			—						11,916						—						11,916
U.S. government treasury securities			—						29,653						—						29,653
Marketable Securities:
Corporate debt securities			—						2,344,055						—						2,344,055
Commercial paper			—						419,901						—						419,901
U.S. government treasury securities			—						399,219						—						399,219
Certificates of deposit			—						205,150						—						205,150
U.S. government agency securities			—						1,495						—						1,495
Total financial assets			$	714,073					$	3,707,933					$	—					$	4,422,006

			Fair Value Measurement as of December 31, 2024
			Level 1						Level 2						Level 3						Total
Financial Assets:
Cash equivalents:
Money market funds			$	1,193,927					$	—					$	—					$	1,193,927
Corporate debt securities			—						2,502						—						2,502
U.S. government treasury securities			—						9,088						—						9,088
Marketable Securities:
Corporate debt securities			—						1,896,041						—						1,896,041
Commercial paper			—						390,283						—						390,283
Certificates of deposit			—						187,802						—						187,802
U.S. government treasury securities			—						466,460						—						466,460
U.S. government agency securities			—						1,490						—						1,490
Total financial assets			$	1,193,927					$	2,953,666					$	—					$	4,147,593

The Company considers all highly liquid investments, including money market funds with an original maturity of three months or less at the date of purchase, to be cash equivalents. The Company uses quoted prices in active markets for assets to determine the fair value of its Level 1 investments in money market funds. The Company classifies its commercial paper, corporate debt securities, certificates of deposit, U.S. government agency securities, and 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):

			March 31, 2025						December 31, 2024
Computers and equipment			$	50,168					$	46,155
Furniture and fixtures			22,911						20,752
Leasehold improvements			70,267						67,855
Capitalized software development costs			235,580						285,015
Total property and equipment			$	378,926					$	419,777
Less: accumulated depreciation and amortization			(129,010)						(192,807)
Total property and equipment, net			$	249,916					$	226,970

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 $10.1 million and $10.7 million for the three months ended March 31, 2025 and 2024, respectively.

6. Acquisitions, Intangible Assets and Goodwill

2024 Acquisitions

During the year ended December 31, 2024, the Company entered into one purchase agreement for an acquisition of a business, which was accounted for as a business combination in accordance with ASC 805, Business Combinations. The Company does not consider this acquisition to be material. The total purchase price was allocated to intangible assets in the amount of $0.7 million and goodwill in the amount of $10.2 million based on the respective estimated fair values. The resulting goodwill from the agreements is not deductible for income tax purposes. Pro forma results of operations from the acquisition have not been presented because they were not material to the consolidated results of operations.

Intangible Assets

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

			March 31, 2025
			Gross Carrying Amount						Accumulated Amortization						Net Carrying Amount						Amortization Period
Developed technology			$	10,918					$	(8,314)					$	2,604					3 Years
Customer relationships			3,300						(3,278)						22						4 Years
Total			$	14,218					$	(11,592)					$	2,626

			December 31, 2024
			Gross Carrying Amount						Accumulated Amortization						Net Carrying Amount						Amortization Period
Developed technology			$	10,918					$	(7,432)					$	3,486					3 years
Customer relationships			3,300						(3,075)						225						4 years
Total			$	14,218					$	(10,507)					$	3,711

Intangible amortization expense was approximately $1.1 million and $2.2 million for the three months ended March 31, 2025 and 2024, respectively.

As of March 31, 2025, future amortization expense by year is expected to be as follows (in thousands):

			Amount
Remainder of 2025			$	1,685
2026			743
2027			198
Total			$	2,626

Goodwill

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

			Amount
Balance as of December 31, 2024			$	360,381
Foreign currency translation adjustments			1,357
Balance as of March 31, 2025			$	361,738

7. Convertible Senior Notes

2025 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 of the 2025 Notes may convert all or any portion of their 2025 Notes, in integral multiples of $1,000 principal amount, at the option of the holder until the close of business on the second scheduled trading day immediately preceding the maturity date for the 2025 Notes. The conversion rate for the 2025 Notes is initially 10.8338 shares of Class A common stock per $1,000 principal amount of 2025 Notes (equivalent to an initial conversion price for the 2025 Notes of approximately $92.30 per share of Class A common stock), subject to adjustment as set forth in the indenture governing the 2025 Notes (the “2025 Indenture”). The Company elected to settle up to the principal amount of its 2025 Notes in cash and deliver, as the case may be, shares of Class A common stock (plus cash in lieu of any fractional share), in respect to the remainder, if any, of the Company’s conversion obligation in excess of the aggregate principal amount of the 2025 Notes being converted. The conversion consideration will be based on a daily settlement amount calculated on a proportionate basis for each trading day in a 30 trading day observation period as described in the 2025 Indenture. In addition, if specific corporate events occur prior to the applicable maturity date for the 2025 Notes, or if the Company elects to redeem the 2025 Notes, the Company will increase the conversion rate for the 2025 Notes for a holder who elects to convert their 2025 Notes in connection with such a corporate event or redemption in certain circumstances.

Since the issuance of the 2025 Notes, the Company received and settled an immaterial amount of conversion notices from the holders in cash. As of March 31, 2025, the 2025 Notes were classified as current liabilities on the Company's condensed consolidated balance sheet.

The Company may redeem for cash all or any portion of the 2025 Notes prior to the 31st scheduled trading day immediately preceding the maturity date for 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 for the 2025 Notes 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.

2029 Convertible Senior Notes

On December 12, 2024, the Company issued $1.0 billion aggregate principal amount of 0.00% Convertible Senior Notes due 2029 (the “2029 Notes” and together with the 2025 Notes, the “Notes”) in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act. The total net proceeds from the sale of the 2029 Notes, after deducting the initial purchasers’ discounts and debt issuance costs, were approximately $979.1 million. The 2029 Notes do not bear interest and the principal amount of the 2029 Notes will not accrete. The 2029 Notes will mature on December 1, 2029, unless earlier converted, redeemed or repurchased.

Holders may convert their 2029 Notes at their option at any time prior to the close of business on the business day immediately preceding September 1, 2029 only under the following circumstances:

(1)during any calendar quarter commencing after the calendar quarter ending on March 31, 2025 (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 for the 2029 Notes 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 2029 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 2029 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 2029 Notes (the “2029 Indenture”).

On or after September 1, 2029 until the close of business on the second scheduled trading day immediately preceding the maturity date for the 2029 Notes, holders may convert all or any portion of their 2029 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 2029 Notes is initially 4.5955 shares of Class A common stock per $1,000 principal amount of 2029 Notes (equivalent to an initial conversion price for the 2029 Notes of approximately $217.60 per share of Class A common stock), subject to adjustment as set forth in the 2029 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 20 trading day observation period as described in the 2029 Indenture. In addition, if specific corporate events occur prior to the applicable maturity date for the 2029 Notes, or if the Company elects to redeem the 2029 Notes, the Company will increase the conversion rate for the 2029 Notes for a holder who elects to convert their 2029 Notes in connection with such a corporate event or redemption in certain circumstances.

During the three months ended March 31, 2025, the conditional conversion features of the 2029 Notes were not triggered. Therefore the 2029 Notes are not convertible, in whole or in part, at the option of the holders between April 1, 2025 through June 30, 2025. As of March 31, 2025, the 2029 Notes were classified as non-current liabilities on the Company's condensed consolidated balance sheet.

The Company may not redeem the 2029 Notes prior to December 6, 2027. The Company may redeem for cash all or any portion of the 2029 Notes, at its option, on or after December 6, 2027 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 2029 Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.

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

			March 31, 2025						December 31, 2024
2025 Notes:
Principal			$	635,428					$	635,448
Unamortized debt issuance costs			(648)						(1,425)
Net carrying amount			$	634,780					$	634,023
2029 Notes:
Principal			$	1,000,000					$	1,000,000
Unamortized debt issuance costs			(19,686)						(20,718)
Net carrying amount			$	980,314					$	979,282

As of March 31, 2025, the total estimated fair value of the 2025 Notes was approximately $712.3 million and the fair value of the 2029 Notes was approximately $869.7 million. The fair value was determined based on the closing trading price or quoted market price per $100 of the Notes as of the last day of trading for the period. The fair value of the Notes is primarily affected by the trading price of the Company’s Class A common stock and market interest rates and has been classified as level 2 in the fair value hierarchy.

Issuance costs are being amortized to interest expense over the contractual terms of the 2025 Notes and 2029 Notes at an effective interest rate of 0.59% for the 2025 Notes and 0.43% for the 2029 Notes.

The following table sets forth the interest expense related to the 2025 and 2029 Notes for the three months ended March 31, 2025 and 2024 (in thousands):

			Three Months Ended March 31,
			2025						2024
Contractual interest expense			$	199					$	234
Amortization of issuance costs			1,819						850
Total			$	2,018					$	1,084

Capped Calls

In connection with the pricing of the 2025 and 2029 Notes, the Company entered into privately negotiated capped call transactions with certain option counterparties (the “Capped Calls”). The initial strike price of the Capped Calls corresponds to the initial conversion price of each of the Notes. 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, with such offset subject to a cap based on the cap price. For accounting purposes, the Capped Calls are separate transactions, and not part of the 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 incurred to purchase the Capped Calls was recorded as a reduction to additional paid-in capital and will not be remeasured.

The following table sets forth key terms and costs incurred for the Capped Calls related to each of the Notes (in millions, except per share amounts):

			2025 Notes						2029 Notes
Initial strike price per share, subject to certain adjustments			$	92.30					$	217.60
Initial cap price per share, subject to certain adjustments			$	151.40					$	322.38
Net cost incurred			$	89.6					$	100.9
Common stock covered, subject to anti-dilution adjustments			8.1						4.6

8. Commitments and Contingencies

**Non-cancelable Material Commitments—**During the three months ended March 31, 2025, 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 makes matching contributions to the 401(k) plan. For the three months ended March 31, 2025 and March 31, 2024, the Company incurred expense of $2.1 million and $1.8 million, respectively, for matching contributions.

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 2025 and 2033. 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.

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

			Three Months Ended March 31,
			2025						2024
Operating lease cost (1)			$	13,055					$	10,530
Short-term lease cost			2,757						1,315

1)Includes non-cash lease expense of $8.4 million and $6.8 million for the three months ended March 31, 2025 and 2024, respectively.

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

			Three Months Ended March 31,
			2025						2024
Cash paid for amounts included in measurement of lease liabilities			$	10,611					$	2,284
Operating lease assets obtained in exchange for new lease liabilities			37,769						55,042

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

			Amount
Remainder of 2025			$	22,863
2026			52,257
2027			51,565
2028			45,852
2029			41,877
Thereafter			125,259
Total lease payments			$	339,673
Less: imputed interest			(77,471)
Present value of lease liabilities			$	262,202

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

			March 31, 2025
Weighted-average remaining lease term (years)			6.8
Weighted-average discount rate			6.75		%

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 March 31,
			2025						2024
North America (1)			$	533,815					$	425,600
International			227,738						185,653
Total			$	761,553					$	611,253

1)Includes revenue from the United States of $508.5 million and $404.5 million for the three months ended March 31, 2025 and 2024, respectively.

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 March 31, 2025 and 2024, which was included in the deferred revenue balances at the beginning of each such period, was $425.3 million and $346.8 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 March 31, 2025 and December 31, 2024, the aggregate transaction price allocated to remaining performance obligations was $2,309.0 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.

Accounts Receivable

Accounts receivable deemed uncollectible are charged against the allowance for credit losses when identified. During the three months ended March 31, 2025 and 2024, the Company charged $3.1 million and $2.6 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 March 31, 2025 and December 31, 2024, unbilled accounts receivable of approximately $83.4 million and $77.0 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 $149.3 million and $142.7 million as of March 31, 2025 and December 31, 2024, respectively. Amortization expense was $14.9 million and $11.8 million for the three months ended March 31, 2025 and 2024, 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 months ended March 31, 2025, 183,585 shares of Class B common stock were converted into Class A common stock.

As of March 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 319,232,516 shares of Class A common stock and 25,678,293 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 March 31, 2025, there were 5,619,191 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, 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 March 31, 2025, there were 100,599,679 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, 2024			6,953,119						$	4.55					3.0						$	961,910
Options granted			—						—
Options exercised			(1,316,133)						1.29
Options forfeited or expired			—						—
Balance outstanding—March 31, 2025			5,636,986						$	5.31					3.1						$	529,327
Ending Exercisable—March 31, 2025			5,636,986						$	5.31					3.1						$	529,327

As of March 31, 2025, there were 17,795 shares of Class A common stock and 5,619,191 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.

There were no options granted during the three months ended March 31, 2025 and 2024. The Company received approximately $1.7 million and $2.2 million in cash proceeds from options exercised during the three months ended March 31, 2025 and 2024, respectively. The intrinsic value of options exercised during the three months ended March 31, 2025 and 2024 was approximately $168.4 million and $164.7 million, respectively.

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 Grant Date Fair Value
Balance—December 31, 2024			13,806,700						$	116.09
Awarded			1,100,652						117.98
Vested			(1,475,894)						109.71
Forfeited/canceled			(322,309)						114.80
Balance—March 31, 2025			13,109,149						$	116.99

The Company granted no restricted shares of Class A common stock in connection with acquisitions during the three months ended March 31, 2025.

Total compensation cost related to unvested RSUs and restricted shares of common stock not yet recognized was approximately $1,310.0 million and $1,378.1 million as of March 31, 2025 and December 31, 2024, respectively. The weighted-average period over which this compensation cost related to unvested RSUs and restricted shares of common stock will be recognized is 2.7 years and 2.8 years as of March 31, 2025 and December 31, 2024, respectively.

Total compensation cost related to unvested PSUs not yet recognized was approximately $39.7 million and $52.3 million as of March 31, 2025 and December 31, 2024, respectively. The weighted-average period over which this compensation cost related to unvested PSUs will be recognized is 1.4 years and 1.3 years as of March 31, 2025 and December 31, 2024, respectively.

Employee Stock Purchase Plan

In September 2019, the Board adopted and approved the 2019 Employee Stock Purchase Plan (the “ESPP”).

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.

The Company recognized $4.4 million of stock-based compensation expense related to the ESPP during the three months ended March 31, 2025. As of March 31, 2025, $23.0 million has been withheld on behalf of employees for a future purchase under the ESPP due to the timing of payroll deductions. There were no purchases related to ESPP in the three months ended March 31, 2025. As of March 31, 2025, 23,763,794 shares of Class A common stock remain available for grant under the ESPP.

Stock-Based Compensation

The Company recognizes and measures compensation expense for all stock-based payment awards granted to employees, directors and nonemployees, including stock options, restricted stock units (“RSUs”), performance-based awards (“PSUs”), and the employee stock purchase plan (the “ESPP”) 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 probable that the performance condition will be satisfied and the Company accounts for forfeitures as they occur.

The Company also has certain options that have performance-based vesting conditions; stock-based compensation expense for such awards is recognized on a straight-line basis from the time the vesting condition is likely to be met through the time the vesting condition has been achieved.

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

			Three Months Ended March 31,
			2025						2024
Cost of revenue			$	6,651					$	5,527
Research and development			105,735						88,413
Sales and marketing			34,125						28,531
General and administrative			17,754						12,562
Stock-based compensation, net of amounts capitalized			164,265						135,033
Capitalized stock-based compensation expense			5,662						2,646
Total stock-based compensation expense			$	169,927					$	137,679

**12.**Interest Income and Other Income, Net

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

			Three Months Ended March 31,
			2025						2024
Interest income			$	50,727					$	35,435
Other (loss) income, net			(3,548)						128
Interest income and other income, net			$	47,179					$	35,563

13.Income Taxes

The Company recorded a provision for income taxes of $7.2 million and $3.6 million for the three months ended March 31, 2025 and 2024, respectively. The Company has generated U.S. operating income 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 for each of the three months ended March 31, 2025 and 2024. The Company’s policy is to recognize interest and penalties related to uncertain income 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.

**14.**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. 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.

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

			Three Months Ended March 31,
			2025												2024
Basic net income per share:			Class A						Class B						Class A						Class B
Numerator:
Net income			$	22,808					$	1,834					$	39,306					$	3,325
Denominator:
Weighted-average shares used in calculating net income per share, basic			317,561						25,536						305,927						25,879
Basic net income per share			$	0.07					$	0.07					$	0.13					$	0.13
Diluted net income per share:
Numerator:
Allocation of distributed income, net of interest expense and related tax			$	24,101					$	1,938					$	39,306					$	3,325
Reallocation of undistributed net income as a result of conversion of Class B to Class A shares			1,938						—						3,325						—
Allocation of undistributed income			$	26,039					$	1,938					$	42,631					$	3,325
Denominator:
Number of shares used in basic calculation			317,561						25,536						305,927						25,879
Weighted-average effect of diluted securities:
Conversion of Class B to Class A common shares outstanding			25,536						—						25,879						—
Employee stock options			5,961						—						11,047						—
Employee stock purchase plan			86						—						34						—
Restricted stock units and performance stock units			3,404						—						4,475						—
Unvested restricted stock in connection with acquisition			194						—						519						—
Shares issuable upon conversion of the 2025 Notes			5,740						—						8,098						—
Shares issuable upon conversion of the 2029 Notes			4,596						—						—						—
Number of shares used in diluted calculation			363,078						25,536						355,979						25,879
Diluted net income per share			$	0.07					$	0.08					$	0.12					$	0.13

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 March 31,
			2025						2024
Shares subject to outstanding stock options, RSUs and PSUs			2,868						966
Total			2,868						966

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.

**15.**Subsequent Events

Subsequent to March 31, 2025, the Company entered into three purchase agreements for acquisitions of businesses for approximately $180.0 million in cash and stock, subject to certain customary adjustments. The Company is currently evaluating the purchase price allocation for these transactions but does not consider these acquisitions to be material, individually, or in aggregate.