Cash Flow Statement

The cash flow statement provides information about a company cash receipts and cash payments during an accounting period, showing how these cash flows link the ending cash balance to the beginning balance shown on the company balance sheet.

The cash flow statement consists of three parts: cash flows provided by (used in) operating activities, cash flows provided by (used in) investing activities, and cash flows provided by (used in) financing activities.

Datadog Inc., consolidated cash flow statement

US$ in thousands

12 months ended:	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Net income (loss)	183,746)	48,568)	(50,160)	(20,745)	(24,547)
Depreciation and amortization	54,933)	44,465)	34,629)	22,938)	15,450)
(Accretion) amortization of (discounts) premiums on marketable securities	(51,932)	(41,621)	4,726)	16,236)	9,753)
Amortization of issuance costs	3,761)	3,388)	3,369)	3,349)	18,727)
Net loss on conversion inducement and capped call settlement	599)	—)	—)	—)	—)
Amortization of deferred contract costs	52,047)	39,207)	28,003)	17,866)	10,447)
Stock-based compensation, net of amounts capitalized	570,336)	482,300)	363,154)	163,737)	74,374)
Non-cash lease expense	27,263)	26,382)	21,416)	17,201)	14,060)
Allowance for credit losses on accounts receivable	14,847)	11,933)	5,215)	2,311)	3,283)
Loss on disposal of property and equipment	1,660)	706)	1,662)	274)	10)
Accounts receivable, net	(104,485)	(121,661)	(135,701)	(107,112)	(64,248)
Deferred contract costs	(76,048)	(69,481)	(51,098)	(42,775)	(25,080)
Prepaid expenses and other current assets	(26,654)	(13,508)	(6,565)	(737)	(4,403)
Other assets	(1,003)	1,018)	(5,179)	(2,627)	968)
Accounts payable	25,610)	57,773)	(1,286)	3,078)	6,539)
Accrued expenses and other liabilities	(1,626)	(40,489)	37,578)	37,270)	3,970)
Deferred revenue	197,549)	230,974)	168,644)	176,281)	69,788)
Changes in operating assets and liabilities	13,343)	44,626)	6,393)	63,378)	(12,466)
Adjustments to reconcile net income (loss) to net cash provided by operating activities	686,857)	611,386)	468,567)	307,290)	133,638)
Net cash provided by operating activities	870,603)	659,954)	418,407)	286,545)	109,091)
Purchases of marketable securities	(2,653,242)	(2,558,013)	(1,413,717)	(1,125,519)	(1,794,562)
Maturities of marketable securities	2,018,832)	1,864,557)	1,137,724)	1,046,560)	506,554)
Proceeds from sale of marketable securities	201)	36,995)	2,090)	67,749)	163,630)
Purchases of property and equipment	(34,719)	(27,586)	(35,261)	(9,956)	(5,415)
Capitalized software development costs	(60,781)	(34,820)	(29,628)	(26,069)	(20,468)
Cash paid for acquisition of businesses; net of cash acquired	(7,131)	(12,498)	(45,878)	(226,505)	(2,363)
Net cash used in investing activities	(736,840)	(731,365)	(384,670)	(273,740)	(1,152,624)
Proceeds from exercise of stock options	7,444)	20,909)	10,001)	14,907)	15,985)
Proceeds from initial public offering, net of underwriting discounts and commissions and other offering costs	—)	—)	—)	—)	(421)
Proceeds from issuance of common stock under the employee stock purchase plan	43,686)	37,370)	26,025)	20,278)	15,170)
Proceeds from issuance of convertible senior notes, net of issuance costs	978,881)	—)	—)	—)	730,207)
Proceeds from settlement of capped calls related to convertible senior notes	54,725)	—)	—)	—)	—)
Purchase of capped calls related to convertible senior notes	(100,900)	—)	—)	—)	(89,625)
Employee payroll taxes paid related to net share settlement under the employee stock purchase plan	—)	—)	—)	(245)	(1,040)
Repayments of convertible senior notes	(196,753)	—)	(3)	—)	—)
Net cash provided by financing activities	787,083)	58,279)	36,023)	34,940)	670,276)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(4,202)	1,183)	(1,935)	(1,993)	779)
Net increase (decrease) in cash, cash equivalents and restricted cash	916,644)	(11,949)	67,825)	45,752)	(372,478)
Cash, cash equivalents and restricted cash, beginning of period	330,339)	342,288)	274,463)	228,711)	601,189)
Cash, cash equivalents and restricted cash, end of period	1,246,983)	330,339)	342,288)	274,463)	228,711)

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

Net Income and Operating Performance: The company experienced significant volatility in net income over the five-year period. It reported net losses from 2020 through 2022, with losses deepening in 2022 to -50,160 thousand US dollars. However, a notable turnaround occurred in 2023 and 2024, with net income reversing to positive 48,568 thousand and substantially increasing to 183,746 thousand US dollars, indicating a considerable improvement in profitability.
Depreciation, Amortization, and Related Non-Cash Expenses: Depreciation and amortization expenses increased steadily each year, rising from 15,450 thousand in 2020 to 54,933 thousand in 2024, reflecting ongoing capital investments or asset base growth. Amortization of deferred contract costs showed a parallel upward trend, growing from 10,447 thousand to 52,047 thousand over the same period, suggesting increased capitalized contract-related expenditures. Non-cash lease expenses also rose moderately over time.
Marketable Securities and Related Accretion/Amortization: The accretion/amortization of discounts and premiums on marketable securities fluctuated markedly, with positive figures in the early years shifting to substantial negative values in 2023 and 2024 (-41,621 and -51,932 thousand US dollars, respectively). Purchases of marketable securities were consistently high and increasing, especially in 2023 and 2024, exceeding 2.5 billion US dollars per year. Offsetting this, maturities of marketable securities increased substantially as well, indicating active management of the investment portfolio. Proceeds from sales of marketable securities diminished to minimal amounts by 2024.
Working Capital and Current Assets/Liabilities: Accounts receivable net balances increased negatively over time, implying a rise in uncollected receivables. Deferred contract costs similarly showed growing negative balances, indicating higher capitalized contract-related assets. Prepaid expenses and other current assets deepened their negative balances notably by 2024, suggesting increased spending or timing differences. Accounts payable displayed volatility, starting positive, briefly negative, and then rising substantially in 2023 before declining in 2024. Accrued expenses and other liabilities saw a marked transition from positive to negative figures between 2022 and 2023, normalizing somewhat in 2024. Deferred revenue increased sharply until 2023 but declined slightly in the last period, consistent with growth in contract sales and subsequent revenue recognition timing.
Cash Flow Analysis: Net cash provided by operating activities exhibited strong growth, from 109,091 thousand in 2020 to 870,603 thousand in 2024, highlighting improving operational cash generation capabilities. Investing activities consistently required substantial cash outflows, peaking at over 1.15 billion outflow in 2020, then stabilizing around 700-730 million negative in later years, largely driven by purchases of marketable securities and capital expenditures, including software development costs that rose sharply to 60,781 thousand in 2024. Financing activities showed fluctuations with significant inflows in 2020 and 2024, influenced by issuance of convertible senior notes and other equity-related cash inflows; 2024 notably recorded 787,083 thousand positive net cash from financing.
Equity and Debt Financing: Proceeds from the exercise of stock options and issuance of common stock under employee stock purchase plans increased over time, supporting equity financing. Convertible senior notes issuance and repayments were sparse but significant, with a large note issuance of 978,881 thousand in 2024. Adjustments related to capped calls were introduced in later years, reflecting complex financing arrangements. Overall, financing cash flows ultimately contributed positive cash flow in recent years after modest inflows in the middle period.
Liquidity Position: Cash, cash equivalents, and restricted cash exhibited fluctuations, decreasing sharply in 2020 by 372,478 thousand, but increasing steadily afterward with a pronounced surge of 916,644 thousand in 2024, culminating in an ending balance of 1,246,983 thousand US dollars. This enhanced liquidity position corresponds with rising operating cash flow and significant financing inflows in the most recent period.
Summary of Financial Trends: The data reveals an improving financial trajectory with a shift from sustained net losses to robust profitability. Increasing amortization, depreciation, and contract costs capitalization suggest ongoing investment in growth and infrastructure. The company managed substantial acquisitions and capital expenditures while maintaining strong cash generation from operations. Financing activities, particularly convertible debt issuance and equity transactions, supported liquidity and growth initiatives. Overall, the company appears to be transitioning into a mature phase characterized by positive earnings, strong operating cash flows, and a solid liquidity base despite continued investment obligations.

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Datadog Inc. (NASDAQ:DDOG)

Cash Flow Statement