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Operating cash flow reached $315.9M in 2026Q2, 7.1x net income, with FCF margin at 24.9%, but SBC of $220.3M inflates reported cash generation.
Datadog, Inc. (DDOG) cash flow statement — 9-year operating, investing & financing cash flows
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 |
|---|
| Cash from Operations | 1.23B | 1.05B | 870.6M | 659.95M | 418.41M | 286.55M | 109.09M | 24.23M | 10.83M | 13.83M |
| Operating CF Margin % | - | 30.64% | 32.43% | 31.01% | 24.98% | 27.85% | 18.08% | 6.68% | 5.47% | 13.73% |
| Operating CF Growth % | 114.4% | 20.62% | 31.92% | 57.73% | 46.02% | 162.67% | 350.16% | 123.79% | -21.71% | - |
| Net Income | 177.58M | 107.74M | 183.75M | 48.57M | -50.16M | -20.75M | -24.55M | -16.71M | -10.76M | -2.57M |
| Depreciation & Amortization | 86.32M | 55.76M | 54.93M | 44.47M | 34.63M | 22.94M | 15.45M | 12.37M | 6.03M | 2.7M |
| Stock-Based Compensation | 823.04M | 750.67M | 570.34M | 482.3M | 363.15M | 163.74M | 74.37M | 19.03M | 5.24M | 3.07M |
| Deferred Taxes | 0 | 0 | 0 | 0 | 0 | 18.82M | 13.05M | 1.92M | 486K | 382K |
| Other Non-Cash Items | 233.44M | 82.47M | 48.24M | 39.99M | 64.39M | 38.42M | 43.23M | 17.16M | 2.67M | 1.27M |
| Working Capital Changes | -91.35M | 53.49M | 13.34M | 44.63M | 6.39M | 63.38M | -12.47M | -9.54M | 7.16M | 8.97M |
| Change in Receivables | -241.47M | -157.37M | -104.48M | -121.66M | -135.7M | -107.11M | -64.25M | -47.51M | -25.32M | -19.27M |
| Change in Inventory | 0 | 0 | 0 | 0 | 0 | 0 | 535K | -12.16M | 2.57M | -2.87M |
| Change in Payables | 106.11M | 36.63M | 25.61M | 57.77M | -1.29M | 3.08M | 6.54M | 2.48M | 7.24M | 4.65M |
| Cash from Investing | -1.36B | -1.33B | -736.84M | -731.37M | -384.67M | -273.74M | -1.15B | -202.22M | -17.46M | -12.76M |
| Capital Expenditures | -108.38M | -135.42M | -34.72M | -27.59M | -64.89M | -36.02M | -25.88M | -23.44M | -15.84M | -7.8M |
| CapEx % of Revenue | 2.73% | 3.95% | 1.29% | 1.3% | 3.87% | 3.5% | 4.29% | 6.46% | 8% | 7.74% |
| Acquisitions | -113.2M | -117.98M | -7.13M | -12.5M | -45.88M | -226.5M | -2.36M | -2.14M | -1.62M | -4.96M |
| Investments | - | - | - | - | - | - | - | - | - | - |
| Other Investing | -47.89M | 0 | -60.78M | -34.82M | 0 | 0 | 0 | -10.13M | 0 | 0 |
| Cash from Financing | 82.85M | -572.48M | 787.08M | 58.28M | 36.02M | 34.94M | 670.28M | 714.22M | 7.78M | 462K |
| Debt Issued (Net) | 0 | -635.74M | 735.95M | 0 | -3K | 0 | 730.21M | 0 | 0 | 0 |
| Equity Issued (Net) | 82.85M | 63.25M | 51.13M | 58.28M | 36.03M | 35.19M | -1.04M | 706.32M | 7.78M | 462K |
| Dividends Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Share Repurchases | 0 | 0 | 0 | 0 | 0 | 0 | -421K | 0 | 0 | 0 |
| Other Financing | 0 | 0 | 0 | 0 | 0 | -245K | -58.89M | 7.9M | 0 | 0 |
| Net Change in Cash | -54.07M | -845.68M | 916.64M | -11.95M | 67.83M | 45.75M | -372.48M | 536.21M | 1.2M | 1.48M |
| Free Cash Flow | 1.15B | 1B | 835.88M | 632.37M | 353.52M | 250.52M | 83.21M | 791K | -5.01M | 6.03M |
| FCF Margin % | 29.11% | 29.19% | 31.14% | 29.71% | 21.1% | 24.35% | 13.79% | 0.22% | -2.53% | 5.98% |
| FCF Growth % | 21.17% | 19.7% | 32.18% | 78.88% | 41.11% | 201.08% | 10419.34% | 115.79% | -183.08% | - |
| FCF per Share | 3.14 | 2.75 | 2.33 | 1.81 | 1.12 | 0.81 | 0.28 | 0.01 | -0.07 | 0.08 |
| FCF Conversion (FCF/Net Income) | 6.50x | 9.75x | 4.74x | 13.59x | -8.34x | -13.81x | -4.44x | -1.45x | -1.01x | -5.38x |
| Interest Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Taxes Paid | 29.98M | 17.65M | 20.99M | 16.5M | 1.59M | 1.49M | 410K | 0 | 36K | 40K |
Quick answers to the most common questions about buying DDOG stock.
Datadog, Inc. (DDOG) generated $1.05B in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Datadog, Inc. (DDOG) generated $1.00B in free cash flow in 2025. Free cash flow is the cash left over after capital expenditures, which can be used to pay dividends, repurchase shares, or pay down debt.
Datadog, Inc. (DDOG) spent $135.4M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.
Key Metrics
Top Statement Risk
SBC masking true profitability
Metrics are mathematically derived from official filings.
Cash Conversion Far Exceeds GAAP Earnings
Operating cash flow averaged 7.1x net income in 2026Q2, per the latest quarterly report, indicating that reported earnings understate cash generation due to heavy non-cash stock-based compensation.
The OCF/NI ratio of 7.09 in 2026Q2, up from 4.98 in 2024Q1, suggests that net income is a poor proxy for cash profitability. The gap is primarily driven by SBC of $220.3M, which is added back to cash flow, and working capital swings that have been volatile. This implies that investors should focus on cash flow metrics rather than GAAP earnings when assessing the company's fundamental performance.
Free Cash Flow Momentum Accelerates
Free cash flow reached $278.7M in 2026Q2, a 37% increase from the prior year quarter, with FCF margin expanding to 24.9% from 22.3% in 2024Q2, as reported in the cash flow statement.
The FCF trajectory shows a clear upward trend, with quarterly FCF growing from $143.8M in 2024Q2 to $278.7M in 2026Q2, despite a slight dip in 2025Q2. FCF margins have improved from the low 20s to the high 20s, indicating operating leverage is beginning to materialize. This suggests that the company is converting its revenue growth into cash more efficiently, which may support its premium valuation.
Capital Expenditures Remain Modest
Capital expenditures averaged only 2.3% of revenue over the last ten quarters, with 2026Q2 CapEx at $37.2M, indicating a highly asset-light model that requires minimal reinvestment to sustain growth.
CapEx intensity is low and relatively stable, ranging from 0.9% to 4.5% of revenue, with no clear trend. This suggests that the company's infrastructure is largely cloud-based, and its capital requirements are minimal. The low capital intensity supports high FCF conversion and allows management to allocate more cash to growth initiatives or potential acquisitions.
Working Capital Swings Drive Cash Flow Volatility
Working capital changes swung from -$151.6M in 2026Q2 to +$42.6M in 2026Q1, as per the cash flow statement, indicating that collections and payables management can significantly impact quarterly cash flow.
The working capital line is highly volatile, with negative changes in several quarters (e.g., -$151.6M in 2026Q2, -$38.2M in 2024Q2) and positive in others. This suggests that the company's cash conversion cycle is not stable, possibly due to timing of customer payments and vendor obligations. Investors should monitor this volatility as it may obscure the underlying cash generation trend.
Cash Deployment Focused on Acquisitions
Cash used for acquisitions totaled $101.7M in 2026Q2, the largest quarterly outlay in the period, while no dividends or buybacks were paid, according to the cash flow statement.
The company has not returned capital to shareholders via dividends or buybacks, instead deploying cash into acquisitions, with notable outlays in 2026Q2 ($101.7M) and 2025Q2 ($115.3M). This suggests a strategy of inorganic growth to expand its product suite. The lack of shareholder returns is typical for a high-growth company, but investors should monitor whether acquisition spending generates adequate returns.
Cumulative Cash Generation Outpaces Net Income
Over the last ten quarters, cumulative operating cash flow of $2.57B exceeded cumulative net income of $0.39B by over $2.1B, as derived from the cash flow data, highlighting a persistent gap.
The cumulative gap between operating cash flow and net income is substantial, driven primarily by stock-based compensation and other non-cash charges. This divergence indicates that the company's earnings quality is low in the traditional sense, but it also means that the business is generating far more cash than GAAP earnings suggest. This may justify a higher valuation multiple based on cash flow rather than earnings.
What the Cash Flow Statement Obscures
Stock-based compensation of $220.3M in 2026Q2, as reported, exceeds operating income, suggesting that reported cash flow is inflated by non-cash charges that may not reflect true economic costs.
The cash flow statement adds back SBC, which is a real cost to shareholders through dilution, yet it is not reflected in operating cash flow. This can overstate the company's cash generation ability. Additionally, the low cash balance of $401M, despite strong FCF, may indicate that cash is being deployed elsewhere, such as acquisitions, which are not fully captured in the operating section. Investors should adjust for SBC and consider the dilutive impact when evaluating the sustainability of cash flows.