Free cash flow remains a highlight with a 32.1% margin in 2026Q1, although the OCF/NI ratio of 6.36x underscores a significant disconnect between GAAP earnings and actual cash generation.
| Cash from Operations | 1.11B | 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 % | 78.18% | 20.62% | 31.92% | 57.73% | 46.02% | 162.67% | 350.16% | 123.79% | -21.71% | - |
| Net Income | 135.67M | 107.74M | 183.75M | 48.57M | -50.16M | -20.75M | -24.55M | -16.71M | -10.76M | -2.57M |
| Depreciation & Amortization | 99.98M | 122.53M | 54.93M | 44.47M | 34.63M | 22.94M | 15.45M | 12.37M | 6.03M | 2.7M |
| Stock-Based Compensation | 586.41M | 0 | 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 | 247.35M | 766.37M | 48.24M | 39.99M | 64.39M | 38.42M | 43.23M | 17.16M | 2.67M | 1.27M |
| Working Capital Changes | 43.81M | 53.49M | 13.34M | 44.63M | 6.39M | 63.38M | -12.47M | -9.54M | 7.16M | 8.97M |
| Change in Receivables | -205.72M | -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 | 68.84M | 36.63M | 25.61M | 57.77M | -1.29M | 3.08M | 6.54M | 2.48M | 7.24M | 4.65M |
| Cash from Investing | -1.21B | -1.33B | -736.84M | -731.37M | -384.67M | -273.74M | -1.15B | -202.22M | -17.46M | -12.76M |
| Capital Expenditures | -86.36M | -135.42M | -34.72M | -27.59M | -64.89M | -36.02M | -25.88M | -23.44M | -15.84M | -7.8M |
| CapEx % of Revenue | 2.35% | 3.95% | 1.29% | 1.3% | 3.87% | 3.5% | 4.29% | 6.46% | 8% | 7.74% |
| Acquisitions | -126.82M | -117.98M | -7.13M | -12.5M | -45.88M | -226.5M | -2.36M | -2.14M | -1.62M | -4.96M |
| Investments | - | - | - | - | - | - | - | - | - | - |
| Other Investing | -67.44M | 0 | -60.78M | -34.82M | 0 | 0 | 0 | -10.13M | 0 | 0 |
| Cash from Financing | -564.42M | -572.48M | 787.08M | 58.28M | 36.02M | 34.94M | 670.28M | 714.22M | 7.78M | 462K |
| Debt Issued (Net) | -635.74M | -635.74M | 735.95M | 0 | -3K | 0 | 730.21M | 0 | 0 | 0 |
| Equity Issued (Net) | 71.29M | 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 | 20K | 0 | 0 | 0 | 0 | -245K | -58.89M | 7.9M | 0 | 0 |
| Net Change in Cash | -653.49M | -845.68M | 916.64M | -11.95M | 67.83M | 45.75M | -372.48M | 536.21M | 1.2M | 1.48M |
| Free Cash Flow | 1.08B | 1B | 835.88M | 632.37M | 353.52M | 250.52M | 83.21M | 791K | -5.01M | 6.03M |
| FCF Margin % | 29.4% | 29.19% | 31.14% | 29.71% | 21.1% | 24.35% | 13.79% | 0.22% | -2.53% | 5.98% |
| FCF Growth % | 20.81% | 19.7% | 32.18% | 78.88% | 41.11% | 201.08% | 10419.34% | 115.79% | -183.08% | - |
| FCF per Share | 2.96 | 2.75 | 2.33 | 1.81 | 1.12 | 0.81 | 0.28 | 0.01 | -0.07 | 0.08 |
| FCF Conversion (FCF/Net Income) | 7.96x | 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 | 11.67M | 0 | 20.99M | 16.5M | 1.59M | 1.49M | 410K | 0 | 36K | 40K |
High stock-based compensation dilution
As reported in recent financial statements, Datadog's operating cash flow consistently dwarfs net income, with the OCF/NI ratio reaching a staggering 6.36x in 2026Q1, highlighting a significant disconnect between GAAP accounting profits and the actual cash-generative capacity of the underlying software-as-a-service business model.
The persistent gap between net income and operating cash flow suggests that non-cash expenses, primarily stock-based compensation, are the primary drivers of the company's reported profitability. Investors should interpret this divergence as a signal that the company's GAAP earnings may not fully reflect the economic cost of talent acquisition and retention required to maintain its competitive edge.
Based on the provided cash flow data, Datadog has maintained a robust free cash flow margin, peaking at 35.9% in 2024Q3 and remaining above 32% in 2026Q1, which indicates that the platform's consumption-based revenue model is highly efficient at converting top-line growth into liquid capital.
The ability to sustain high FCF margins while simultaneously scaling R&D investment suggests that the company's infrastructure is reaching a level of maturity where incremental revenue requires less proportional capital expenditure. This trajectory appears to provide the necessary liquidity to fund ongoing product expansion without immediate reliance on external financing.
According to historical cash flow filings, Datadog's capital expenditure as a percentage of revenue has remained disciplined, fluctuating between 0.9% and 4.5% over the last ten quarters, which underscores the asset-light nature of its cloud-native observability platform compared to traditional hardware-dependent software providers.
The low capital intensity suggests that the company is not burdened by significant physical infrastructure requirements, allowing it to prioritize cash deployment toward software development and market expansion. This efficiency warrants further investigation into whether future growth will necessitate a step-up in capital spending to support global data residency requirements.
Based on the provided cash flow statements, stock-based compensation has surged from $128.1 million in 2023Q4 to $205.4 million in 2025Q4, a trend that effectively obscures the true economic cost of operations and complicates the assessment of the company's long-term GAAP profitability trajectory.
While the cash flow statement highlights strong operational inflows, the heavy reliance on equity-based incentives suggests that the company is effectively financing its growth through shareholder dilution rather than purely through operational efficiency. Investors should monitor whether this reliance on SBC persists as the company matures, as it may indicate an underlying inability to achieve GAAP profitability through organic revenue growth alone.
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.