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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
_________________________________________________________
FORM 10-Q
_________________________________________________________
(Mark One)
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2024
OR
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from             to            
Commission File Number: 001-39051
_________________________________________________________
Datadog, Inc.
(Exact Name of Registrant as Specified in its Charter)
_________________________________________________________
Delaware27-2825503
(State or other jurisdiction of
incorporation or organization)		(I.R.S. Employer
Identification No.)
620 8th Avenue, 45th Floor
New York,NY10018
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area code: (866) 329-4466
_________________________________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A common stock, par value $0.00001 per shareDDOGThe Nasdaq Stock Market LLC
(Nasdaq Global Select Market)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☒
Accelerated filer☐
Non-accelerated filer☐Small reporting company☐
Emerging growth company☐  
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of August 2, 2024, there were 311,110,360 shares of the registrant’s Class A common stock and 26,041,915 shares of the registrant’s Class B common stock, each with a par value of $0.00001 per share, outstanding.






TABLE OF CONTENTS
Page
 
 

1




SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q including statements regarding our future results of operations or financial condition, business strategy and plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will” or “would” or the negative of these words or other similar terms or expressions. These forward-looking statements include, but are not limited to, statements concerning the following:
•our expectations regarding our revenue, expenses and other operating results;
•our ability to acquire new customers and successfully retain existing customers;
•our ability to increase usage of our platform and upsell and cross sell additional products;
•our ability to achieve or sustain our profitability;
•future investments in our business, our anticipated capital expenditures and our estimates regarding our capital requirements;
•the costs and success of our sales and marketing efforts, and our ability to promote our brand;
•our reliance on key personnel and our ability to identify, recruit and retain skilled personnel;
•our ability to effectively manage our growth, including any international expansion;
•our ability to protect our intellectual property rights and any costs associated therewith;
•our ability to compete effectively with existing competitors and new market entrants;
•the growth rates of the markets in which we compete; and
•the potential impact of general market, political, economic, and business conditions in our industry, or reductions in information technology spending, on our business, results of operations and financial condition.

You should not rely on forward-looking statements as predictions of future events. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors described under the header “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained herein. The results, events and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.
The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made, and we undertake no obligation to update them to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law.
Unless the context otherwise indicates, references in this report to the terms “Datadog”, “the Company,” “we,” “our” and “us” refer to Datadog, Inc. and its subsidiaries. “Datadog” and other trade names and trademarks of ours appearing in this report are our property. This report contains trade names and trademarks of other companies, which are the property of their respective owners. We do not intend our use or display of other companies’ trade names or trademarks to imply an endorsement or sponsorship of us by such companies, or any relationship with any of these companies.
We may announce material business and financial information to our investors using our investor relations website (www.investors.datadoghq.com). We therefore encourage investors and others interested in Datadog to review the information that we make available on our website, in addition to following our filings with the Securities and Exchange Commission, or the SEC, webcasts, press releases and conference calls.
2




PART I-FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
DATADOG, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
(unaudited)
June 30,
2024		December 31,
2023
ASSETS
CURRENT ASSETS:
Cash and cash equivalents$410,963 $330,339 
Marketable securities2,549,143 2,252,559 
Accounts receivable, net of allowance for credit losses of $12,902 and $12,096 as of June 30, 2024 and December 31, 2023, respectively
533,292 509,279 
Deferred contract costs, current49,518 44,938 
Prepaid expenses and other current assets49,174 41,022 
Total current assets3,592,090 3,178,137 
Property and equipment, net198,911 171,872 
Operating lease assets166,941 126,562 
Goodwill350,864 352,694 
Intangible assets, net5,804 9,617 
Deferred contract costs, non-current77,040 73,728 
Other assets20,741 23,462 
TOTAL ASSETS$4,412,391 $3,936,072 
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable$115,991 $87,712 
Accrued expenses and other current liabilities104,791 127,631 
Operating lease liabilities, current24,565 21,974 
Convertible senior notes, net, current
743,970 — 
Deferred revenue, current801,562 765,735 
Total current liabilities1,790,879 1,003,052 
Operating lease liabilities, non-current193,835 138,128 
Convertible senior notes, net, non-current
— 742,235 
Deferred revenue, non-current14,049 21,210 
Other liabilities6,320 6,093 
Total liabilities2,005,083 1,910,718 
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 June 30, 2024 and December 31, 2023; 310,772,876 and 305,395,175 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively
3 3 
Class B common stock, $0.00001 par value per share; 310,000,000 shares authorized as of June 30, 2024 and December 31, 2023; 25,996,783 and 25,684,571 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively
— — 
Additional paid-in capital2,484,264 2,181,267 
Accumulated other comprehensive loss(9,716)(2,218)
Accumulated deficit(67,243)(153,698)
Total stockholders’ equity2,407,308 2,025,354 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$4,412,391 $3,936,072 
See accompanying notes to condensed consolidated financial statements.
3




DATADOG, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three Months Ended
June 30,		Six Months Ended
June 30,
2024202320242023
Revenue$645,279 $509,460 $1,256,532 $991,174 
Cost of revenue123,499 101,846 233,597 201,760 
Gross profit521,780 407,614 1,022,935 789,414 
Operating expenses:
Research and development274,599 239,494 544,587 468,972 
Sales and marketing187,005 147,455 360,886 292,426 
General and administrative47,558 42,671 92,848 84,992 
Total operating expenses509,162 429,620 998,321 846,390 
Operating income (loss)12,618 (22,006)24,614 (56,976)
Other income (loss):
Interest expense(1,477)(1,526)(2,851)(3,707)
Interest income and other income, net36,652 22,624 72,215 39,351 
Other income, net35,175 21,098 69,364 35,644 
Income (loss) before provision for income taxes47,793 (908)93,978 (21,332)
Provision for income taxes3,969 3,061 7,523 6,723 
Net income (loss)$43,824 $(3,969)$86,455 $(28,055)
Net income (loss) attributable to common stockholders$43,824 $(3,969)$86,455 $(28,055)
Basic net income (loss) per share$0.13 $(0.01)$0.26 $(0.09)
Diluted net income (loss) per share$0.12 $(0.01)$0.24 $(0.09)
Weighted average shares used in calculating basic net income (loss) per share:334,941 322,215 333,373 320,788 
Weighted average shares used in calculating diluted net income (loss) per share:356,740 322,215 356,650 320,788 
See accompanying notes to condensed consolidated financial statements.
4




DATADOG, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(in thousands)
(unaudited)
Three Months Ended
June 30,		Six Months Ended
June 30,
2024202320242023
Net income (loss)$43,824 $(3,969)$86,455 $(28,055)
Other comprehensive (loss) income:
Foreign currency translation adjustments(815)(579)(3,079)62 
Unrealized (loss) gain on available-for-sale marketable securities
(1,201)(5,966)(4,419)42 
Other comprehensive (loss) income(2,016)(6,545)(7,498)104 
Comprehensive income (loss)$41,808 $(10,514)$78,957 $(27,951)
See accompanying notes to condensed consolidated financial statements.
5




DATADOG, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)
(in thousands, except share data)
(unaudited)

Class A and Class B
Common Stock		Additional
Paid-in
Capital		Accumulated Other Comprehensive LossAccumulated
Deficit		Total
Stockholders'
Equity (Deficit)
SharesAmount
BALANCE—March 31, 2024333,965,590 $3 $2,321,119 $(7,700)$(111,067)$2,202,355 
Issuance of common stock upon exercise of stock options1,247,195 — 1,726 — — 1,726 
Vesting of restricted and performance stock units1,178,139 — — — — — 
Issuance of restricted shares of common stock from acquisitions136,079 — — — — — 
Issuance of common stock under the Employee Stock Purchase Plan242,656 — 22,507 — — 22,507 
Stock-based compensation— — 138,912 — — 138,912 
Change in accumulated other comprehensive loss— — — (2,016)— (2,016)
Net income— — — — 43,824 43,824 
BALANCE—June 30, 2024336,769,659 $3 $2,484,264 $(9,716)$(67,243)$2,407,308 

Class A and Class B
Common Stock		Additional
Paid-in
Capital
Accumulated Other Comprehensive Loss
Accumulated
Deficit		Total
Stockholders'
Equity (Deficit)
SharesAmount
BALANCE—March 31, 2023321,446,243 $3 $1,744,221 $(5,773)$(226,352)$1,512,099 
Issuance of common stock upon exercise of stock options1,534,681 — 5,441 — — 5,441 
Vesting of restricted and performance stock units1,180,431 — — — — — 
Issuance of restricted shares of common stock from acquisitions130,162 — — — — — 
Issuance of common stock under the Employee Stock Purchase Plan285,211 — 19,986 — — 19,986 
Stock-based compensation— — 122,347 — — 122,347 
Change in accumulated other comprehensive loss
— — — (6,545)— (6,545)
Net loss— — — — (3,969)(3,969)
BALANCE—June 30, 2023324,576,728 $3 $1,891,995 $(12,318)$(230,321)$1,649,359 

6





Class A and Class B
Common Stock		Additional
Paid-in
Capital		Accumulated Other Comprehensive LossAccumulated
Deficit		Total
Stockholders' Equity (Deficit)
SharesAmount
BALANCE—December 31, 2023331,079,746 $3 $2,181,267 $(2,218)$(153,698)$2,025,354 
Issuance of common stock upon exercise of stock options2,587,839 — 3,899 — — 3,899 
Vesting of restricted and performance stock units2,723,339 — — — — — 
Issuance (retirement) of restricted shares of common stock from acquisitions136,079 — — — — — 
Issuance of common stock under the Employee Stock Purchase Plan242,656 — 22,507 — — 22,507 
Stock-based compensation— — 276,591 — — 276,591 
Change in accumulated other comprehensive loss— — — (7,498)— (7,498)
Net income— — — — 86,455 86,455 
BALANCE—June 30, 2024336,769,659 $3 $2,484,264 $(9,716)$(67,243)$2,407,308 

Class A and Class B
Common Stock		Additional
Paid-in
Capital
Accumulated Other Comprehensive (Loss) Gain
Accumulated
Deficit		Total
Stockholders'
Equity (Deficit)
SharesAmount
BALANCE—December 31, 2022319,189,843 $3 $1,625,190 $(12,422)$(202,266)$1,410,505 
Issuance of common stock upon exercise of stock options2,742,866 — 7,517 — — 7,517 
Vesting of early exercised stock options— — — — — 
Vesting of restricted and performance stock units2,228,646 — — — — — 
Issuance of restricted shares of common stock from acquisitions130,162 — — — — 
Issuance of common stock under the Employee Stock Purchase Plan285,211 — 19,986 — — 19,986 
Stock-based compensation— — 239,302 — — 239,302 
Changes in accumulated other comprehensive income
— — — 104 — 104 
Net loss— — — — (28,055)(28,055)
BALANCE—June 30, 2023324,576,728 $3 $1,891,995 $(12,318)$(230,321)$1,649,359 

See accompanying notes to condensed consolidated financial statements
7




DATADOG, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Six Months Ended June 30,
20242023
CASH FLOWS FROM OPERATING ACTIVITIES:  
Net income (loss)$86,455 $(28,055)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization25,335 20,825 
Accretion of discounts on marketable securities(26,695)(13,291)
Amortization of issuance costs1,760 1,691 
Amortization of deferred contract costs24,294 17,996 
Stock-based compensation, net of amounts capitalized269,685 231,065 
Non-cash lease expense13,591 12,196 
Allowance for credit losses on accounts receivable6,574 6,311 
Loss on disposal of property and equipment343 421 
Changes in operating assets and liabilities:
Accounts receivable, net(30,586)60,139 
Deferred contract costs(32,170)(27,618)
Prepaid expenses and other current assets(8,443)(16,823)
Other assets2,171 2,241 
Accounts payable31,570 24,897 
Accrued expenses and other liabilities(15,856)(44,089)
Deferred revenue28,666 39,039 
Net cash provided by operating activities376,694 286,945 
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of marketable securities(1,240,301)(1,390,334)
Maturities of marketable securities965,985 1,018,317 
Proceeds from sale of marketable securities8 36,633 
Purchases of property and equipment(18,573)(11,078)
Capitalized software development costs(27,594)(17,798)
Cash paid for acquisition of businesses; net of cash acquired(444)(2,025)
Net cash used in investing activities(320,919)(366,285)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options3,944 7,534 
Proceeds from issuance of common stock under the employee stock purchase plan22,507 19,986 
Repayments of convertible senior notes(25)— 
Net cash provided by financing activities26,426 27,520 
Effect of exchange rate changes on cash, cash equivalents and restricted cash(1,577)836 
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH80,624 (50,984)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH—Beginning of period330,339 342,288 
CASH, CASH EQUIVALENTS AND RESTRICTED CASH—End of period$410,963 $291,304 
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for income taxes$14,822 $10,677 
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Accrued property and equipment purchases$3,840 $274 
Stock-based compensation included in capitalized software development costs$6,906 $8,237 
Acquisition holdback$— $750 
RECONCILIATION OF CASH AND CASH EQUIVALENTS WITHIN THE CONDENSED CONSOLIDATED BALANCE SHEETS TO THE AMOUNTS SHOWN IN THE STATEMENTS OF CASH FLOWS ABOVE:
Cash and cash equivalents$410,963 $291,304 
Total cash and cash equivalents
$410,963 $291,304 
See accompanying notes to condensed consolidated financial statements.
8




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, 2024 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, 2023, as filed with the SEC on February 23, 2024 (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.
Accounting Pronouncements Not Yet Adopted
In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU No. 2023-07”), which intends to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The amendments in this ASU are effective for public business entities for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The amendments in this ASU should be applied retrospectively to all prior
9




periods presented in the financial statements. The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements.
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 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 June 30, 2024 and December 31, 2023 (in thousands):
June 30, 2024
Amortized
Cost		Unrealized
Gain		Unrealized
Losses		Fair
Value
Corporate debt securities$1,495,277 $229 $(3,438)$1,492,068 
U.S. government treasury securities442,675 20 (2,065)440,630 
Commercial paper376,717 35 (95)376,657 
Certificates of deposit191,090 113 (6)191,197 
U.S. government agency securities48,728 — (137)48,591 
Marketable securities$2,554,487 $397 $(5,741)$2,549,143 

December 31, 2023
Amortized
Cost		Unrealized
Gain		Unrealized
Losses		Fair
Value
Corporate debt securities$776,323 $770 $(1,140)$775,953 
Commercial paper605,291 570 (75)605,786 
U.S. government treasury securities460,854 390 (1,399)459,845 
Certificates of deposit264,405 335 (15)264,725 
U.S. government agency securities146,611 — (361)146,250 
Marketable securities$2,253,484 $2,065 $(2,990)$2,252,559 
As of June 30, 2024, the fair values of available-for-sale marketable securities, by remaining contractual maturity, were as follows (in thousands):
Due within one year$1,588,551 
Due in one year through five years960,592 
Total$2,549,143 
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.
10




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 June 30, 2024 and December 31, 2023, and indicate the fair value hierarchy of the valuation inputs utilized to determine such fair value (in thousands):
Fair Value Measurement as of June 30, 2024
Level 1Level 2Level 3Total
Financial Assets:
Cash equivalents:
Money market funds$303,735 $— $— $303,735 
Commercial paper— 15,709 — 15,709 
Corporate debt securities— 2,430 — 2,430 
Marketable Securities:
Corporate debt securities— 1,492,068 — 1,492,068 
Commercial paper— 376,657 — 376,657 
Certificates of deposit— 191,197 — 191,197 
U.S. government treasury securities— 440,630 — 440,630 
U.S. government agency securities— 48,591 — 48,591 
Total financial assets$303,735 $2,567,282 $— $2,871,017 
Fair Value Measurement as of December 31, 2023
Level 1Level 2Level 3Total
Financial Assets:
Cash equivalents:
Money market funds$240,909 $— $— $240,909 
Corporate debt securities— 484 — 484 
     U.S. government treasury securities
— 53,972 — 53,972 
Marketable Securities:
Corporate debt securities— 775,953 — 775,953 
Commercial paper— 605,786 — 605,786 
Certificates of deposit— 264,725 — 264,725 
U.S. government treasury securities— 459,845 — 459,845 
U.S. government agency securities— 146,250 — 146,250 
Total financial assets$240,909 $2,307,015 $— $2,547,924 
The Company classifies its highly liquid money market funds and securities purchased within three months of maturity within Level 1 of the fair value hierarchy because they are valued based on quoted market prices in active markets. 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.
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5. Property and Equipment, Net
Property and equipment, net consisted of the following (in thousands):
June 30,
2024		December 31,
2023
Computers and equipment$40,362 $35,736 
Furniture and fixtures19,649 17,202 
Leasehold improvements61,801 55,111 
Capitalized software development costs234,569 192,691 
Total property and equipment$356,381 $300,740 
Less: accumulated depreciation and amortization(157,470)(128,868)
Total property and equipment, net$198,911 $171,872 
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 $10.9 million and $21.6 million for the three and six months ended June 30, 2024, respectively. Depreciation and amortization expense was approximately $8.3 million and $16.4 million for the three and six months ended June 30, 2023, respectively.
6. Acquisitions, Intangible Assets and Goodwill
2023 Acquisitions
During the year ended December 31, 2023, the Company entered into three purchase agreements for acquisitions of businesses, each of which were accounted for as business combinations in accordance with ASC 805, Business Combinations. The Company does not consider these acquisitions to be material, individually or in aggregate. The total purchase price was allocated to intangible assets in the amount of $2.1 million and goodwill in the amount of $3.5 million based on the respective estimated fair values. The resulting goodwill from each of the agreements is not deductible for income tax purposes. Pro forma results of operations from these acquisitions 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):
June 30, 2024
Gross
Carrying
Amount		Accumulated
Amortization		Net
Carrying
Amount		Amortization
Period
Developed technology$14,595 $(9,431)$5,164 3 Years
Customer relationships3,300 (2,660)640 4 Years
Total$17,895 $(12,091)$5,804 
December 31, 2023
Gross
Carrying
Amount		Accumulated
Amortization		Net
Carrying
Amount		Amortization
Period
Developed technology$24,995 $(16,428)$8,567 3 years
Customer relationships3,300 (2,250)1,050 4 years
Total$28,295 $(18,678)$9,617 
Intangible amortization expense was approximately $1.5 million and $2.3 million for the three months ended June 30, 2024 and 2023, respectively, and $3.7 million and $4.5 million for the six months ended June 30, 2024 and 2023, respectively.
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As of June 30, 2024, future amortization expense by year is expected to be as follows (in thousands):
 Amount
Remainder of 2024$2,716 
20252,562 
2026526 
Total$5,804 
Goodwill
The changes in the carrying amount of goodwill were as follows (in thousands):
Amount
Balance as of December 31, 2023$352,694 
Foreign currency translation adjustments(1,830)
Balance as of June 30, 2024$350,864 
7. 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 may convert their notes at their option at any time prior to the close of business on the business day immediately preceding March 15, 2025 only under the following circumstances:
(1)during any calendar quarter commencing after the calendar quarter ending on September 30, 2020 (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 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 2025 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 2025 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 2025 Notes (“the Indenture”).
On or after March 15, 2025 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their 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 2025 Notes is initially 10.8338 shares of Class A common stock per $1,000 principal amount of notes (equivalent to an initial conversion price of approximately $92.30 per share of Class A common stock), subject to adjustment as set forth in the 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 30 trading day observation period as described in the Indenture. In addition, if specific corporate events occur prior to the applicable maturity date, or if the Company elects to redeem the 2025 Notes, the Company will increase the conversion rate for a holder who elects to convert their notes in connection with such a corporate event or redemption in certain circumstances.
13




During the three months ended June 30, 2024, the conditional conversion feature of the 2025 Notes was not triggered as the last reported sale price of the Company's Class A common stock was not greater than or equal to 130% of the conversion price 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 quarter ended June 30, 2024. Therefore the 2025 Notes are not convertible, in whole or in part, at the option of the holders between July 1, 2024 through September 30, 2024. Whether the 2025 Notes will be convertible following such period will depend on the continued satisfaction of this condition or another conversion condition in the future.
When a conversion notice is received, the Company has the option to pay or deliver cash, shares of the Company’s common stock, or a combination thereof. 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 June 30, 2024, the 2025 Notes were classified as short-term debt 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, at its option, 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 2025 Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.
On January 1, 2021 the Company adopted ASU No. 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU No. 2020-06”) using the modified retrospective approach. As a result, the 2025 Notes are accounting for as a single liability measured at their amortized cost, as no other embedded features require bifurcation and recognition as derivatives.
The net carrying amount of the liability component of the 2025 Notes was as follows (in thousands):
June 30,
2024		December 31,
2023
Convertible senior notes, net:
Principal$747,471 $747,496 
Unamortized debt issuance costs(3,501)(5,261)
Net carrying amount$743,970 $742,235 
As of June 30, 2024, the total estimated fair value of the 2025 Notes was approximately $1,081.6 million. The fair value was determined based on the closing trading price or quoted market price per $100 of the 2025 Notes as of the last day of trading for the period. The fair value of the 2025 Notes is primarily affected by the trading price of the Company’s Class A common stock and market interest rates.
The following table sets forth the interest expense related to the 2025 Notes for the three and six months ended June 30, 2024 and 2023 (in thousands):
Three Months Ended
June 30,		Six Months Ended
June 30,
2024202320242023
Contractual interest expense$233 $234 $467 $468 
Amortization of issuance costs910 846 1,760 1,691 
Total$1,143 $1,080 $2,227 $2,159 
Capped Calls
In connection with the pricing of the 2025 Notes, the Company entered into privately negotiated capped call transactions with certain counterparties (“Capped Calls”). The Capped Calls each have an initial strike price of approximately $92.30 per share, subject to certain adjustments, which corresponds to the initial conversion price of the 2025 Notes. The Capped Calls have initial cap prices of $151.04 per share, subject to certain adjustments. The Capped Calls are expected to partially offset the potential dilution to the Company’s Class A common stock upon any conversion of the 2025 Notes, with such offset subject to a cap based on the cap price. The Capped Calls cover, subject to anti-dilution adjustments, approximately 8.1 million shares of the Company’s Class A common stock. For accounting purposes, the Capped Calls are separate transactions, and not part of the 2025 Notes. As these transactions meet certain accounting criteria, the Capped Calls are recorded in stockholders’ equity and
14




are not accounted for as derivatives. The cost of $89.6 million incurred to purchase the Capped Calls was recorded as a reduction to additional paid-in capital and will not be remeasured.
8. Commitments and Contingencies
Non-cancelable Material Commitments—During the six months ended June 30, 2024, 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 and six months ended June 30, 2024, the Company incurred expense of $2.0 million and $3.8 million, respectively, for matching contributions. For the three and six months ended June 30, 2023, the Company incurred expense of $1.7 million and $3.1 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 2024 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
June 30,		Six Months Ended
June 30,
2024202320242023
Operating lease cost (1)
$10,533 $8,070 $21,063 $15,450 
Short-term lease cost1,404 2,200 2,719 4,719 
1)Includes non-cash lease expense of $6.8 million and $6.3 million for the three months ended June 30, 2024 and 2023, respectively, and $13.6 million and $12.2 million for the six months ended June 30, 2024 and 2023, respectively.
Supplemental cash flow information and non-cash activity related to the Company’s operating leases are as follows (in thousands):
Six Months Ended
June 30,
20242023
Cash paid for amounts included in measurement of lease liabilities$2,421 $4,145 
Operating lease assets obtained in exchange for new lease liabilities55,042 46,290 
15




Maturities of lease liabilities by fiscal year for the Company’s operating leases are as follows (in thousands):
 Amount
Remainder of 2024$15,975 
202540,665 
202639,930 
202736,688 
202833,764 
2029 and beyond117,993 
Total lease payments$285,015 
Less: imputed interest(66,615)
Present value of lease liabilities$218,400 
As of June 30, 2024, the Company had various operating leases that had not yet commenced, which are excluded from the table above. The operating leases will commence in fiscal year 2025 with total undiscounted future payments of $56.9 million and a weighted-average lease term of 8.5 years.
Weighted average remaining lease term and discount rate for the Company’s operating leases are as follows:
June 30,
2024
Weighted-average remaining lease term (years)7.3
Weighted-average discount rate6.57 %
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
June 30,		Six Months Ended
June 30,
2024202320242023
North America (1)
$448,002 $355,965 $873,602 $697,181 
International197,277 153,495 382,930 293,993 
Total$645,279 $509,460 $1,256,532 $991,174 
1)Includes revenue from the United States of $426.6 million and $337.5 million for the three months ended June 30, 2024 and 2023, respectively, and $831.1 million and $661.0 million for the six months ended June 30, 2024 and 2023, 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 June 30, 2024 and 2023, which was included in the deferred revenue balances at the beginning of each such period, was $355.0 million and $261.0 million, respectively. Revenue recognized during the six months ended June 30, 2024 and 2023 that was included in the deferred revenue balances at the beginning of each such period was $570.0 million and $391.7 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 June 30, 2024 and December 31, 2023, the aggregate
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transaction price allocated to remaining performance obligations was $1,792.4 million and $1,839.4 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 six months ended June 30, 2024 and 2023, the Company charged $4.8 million and $2.4 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 June 30, 2024 and December 31, 2023, unbilled accounts receivable of approximately $77.8 million and $61.2 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 $126.6 million and $118.7 million as of June 30, 2024 and December 31, 2023, respectively. Amortization expense was $12.5 million and $9.4 million for the three months ended June 30, 2024 and 2023, respectively, and $24.3 million and $18.0 million for the six months ended June 30, 2024 and 2023, 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 and six months ended June 30, 2024, 430,542 shares and 650,716 shares of Class B common stock were converted into Class A common stock, respectively.
As of June 30, 2024, 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 310,772,876 shares of Class A common stock and 25,996,783 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 June 30, 2024, there were 9,468,788 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 June 30, 2024, there were 87,888,035 shares available for grant under the 2019 Plan.  
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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, 202312,077,635 $3.24 3.4$1,426,912 
Options granted— — 
Options exercised(2,587,839)1.51 
Options forfeited or expired(1,038)5.08 
Balance outstanding—June 30, 20249,488,758 $3.71 3.1$1,195,430 
Ending Exercisable—June 30, 2024
9,487,145 $3.70 3.1$1,195,264 
As of June 30, 2024, there were 19,970 shares of Class A common stock and 9,468,788 shares of Class B common stock issuable upon the exercise of options outstanding. As of December 31, 2023, there were 22,926 shares of Class A common stock and 12,054,709 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 June 30, 2024 and December 31, 2023.
There were no options granted during the six months ended June 30, 2024 and 2023. The Company received approximately $3.9 million and $7.5 million in cash proceeds from options exercised during the six months ended June 30, 2024 and 2023, respectively. The intrinsic value of options exercised during the six months ended June 30, 2024 and 2023 was approximately $310.7 million and $210.4 million, respectively. The aggregate fair value of options vested during the six months ended June 30, 2024 was insignificant. The aggregate fair value of options vested during the six months ended June 30, 2023 was $9.6 million.
Restricted Stock Units, Restricted Stock and Performance Stock Units
The following table summarizes the activity for the Company’s unvested RSUs and PSUs:
SharesWeighted-
Average Grant Date
Fair Value
Balance—December 31, 202313,663,501 $99.13 
Awarded2,530,139 122.35 
Vested(2,723,339)92.59 
Forfeited/canceled(673,489)102.67 
Balance—June 30, 202412,796,812 $104.93 
The Company granted no restricted shares of Class A common stock in connection with acquisitions during the six months ended June 30, 2024. In addition, we issued 136,079 fully-vested shares in April 2024 in connection with an acquisition that closed in 2021.
Total compensation cost related to unvested RSUs and restricted shares of common stock not yet recognized was approximately $1,150.7 million and $1,187.3 million as of June 30, 2024 and December 31, 2023, 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 June 30, 2024 and December 31, 2023, respectively.
Total compensation cost related to unvested PSUs not yet recognized was approximately $38.5 million and $25.1 million as of June 30, 2024 and December 31, 2023, respectively. The weighted-average period over which this compensation cost related to unvested PSUs will be recognized is 1.5 years and 1.3 years as of June 30, 2024 and December 31, 2023, respectively.
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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 $3.7 million and $8.1 million of stock-based compensation expense related to the ESPP during the three and six months ended June 30, 2024, respectively. As of June 30, 2024, $7.1 million has been withheld on behalf of employees for a future purchase under the ESPP due to the timing of payroll deductions. During the three months ended June 30, 2024, the Company issued 242,656 shares of Class A common stock under the ESPP. As of June 30, 2024, 20,549,200 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
June 30,		Six Months Ended
June 30,
2024202320242023
Cost of revenue$6,393 $4,157 $11,920 $7,882 
Research and development87,105 75,730 175,518 150,433 
Sales and marketing29,201 25,884 57,732 48,898 
General and administrative11,953 12,566 24,515 23,852 
Stock-based compensation, net of amounts capitalized134,652 118,337 269,685 231,065 
Capitalized stock-based compensation expense4,260 4,010 6,906 8,237 
Total stock-based compensation expense$138,912 $122,347 $276,591 $239,302 
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12.Interest Income and Other Income, Net
Interest income and other income, net consist of the following (in thousands):
 Three Months Ended
June 30,		Six Months Ended
June 30,
 2024202320242023
Interest income$37,241 $23,355 $72,676 $41,875 
Other loss, net(589)(731)(461)(2,524)
Interest income and other income, net$36,652 $22,624 $72,215 $39,351 
13.Income Taxes
The Company recorded a provision for income taxes of $4.0 million and $3.1 million for the three months ended June 30, 2024 and 2023, 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 deemed immaterial for each of the six months ended June 30, 2024 and 2023. The Company’s policy is to recognize interest and penalties related to uncertain 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.
On August 16, 2022, the Inflation Reduction Act (“the Act”) was signed into law. The Act includes a 15.0% corporate alternative minimum tax on the adjusted financial statement income of applicable corporations and a 1.0% excise tax on all corporate stock buybacks of public companies for tax years beginning after December 31, 2022. For the six months ended June 30, 2024, the Act did not materially impact the Company’s provision for income tax. The Company will continue to monitor any changes in tax law.
14.Net Income (Loss) Per Share
Basic and diluted net income (loss) per common share is presented in conformity with the two-class method required for participating securities. Basic and diluted net income (loss) 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 (loss) per share of Class A common stock, the undistributed earnings are equal to net income (loss) for that computation.
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The following table presents the calculation of basic and diluted net income (loss) per share (in thousands, except per share data):
Three Months Ended
June 30,		Six Months Ended
June 30,
2024202320242023
Basic net income (loss) per share:Class AClass BClass AClass BClass AClass BClass AClass B
Numerator:
Net income (loss)$40,409 $3,415 $(3,652)$(317)$79,715 $6,740 $(25,811)$(2,244)
Denominator:
Weighted-average shares used in calculating net income (loss) per share, basic
308,838 26,103 296,466 25,749 307,382 25,991 295,126 25,662 
Basic net income (loss) per share$0.13 $0.13 $(0.01)$(0.01)$0.26 $0.26 $(0.09)$(0.09)
Diluted net income (loss) per share:
Numerator:
Allocation of distributed net income (loss) for basic computation
$40,409 $3,415 $(3,652)$(317)$79,715 $6,740 $(25,811)$(2,244)
Reallocation of undistributed net income (loss) as a result of conversion of Class B to Class A shares
3,415 — (317)— 6,740 — (2,244)
Allocation of undistributed income (loss)
$43,824 $3,415 $(3,969)$(317)$86,455 $6,740 $(28,055)$(2,244)
Denominator:
Number of shares used in basic calculation308,838 26,103 296,466 25,749 307,382 25,991 295,126 25,662 
Weighted-average effect of diluted securities:
Conversion of Class B to Class A common shares outstanding26,103 — 25,749 — 25,991 — 25,662 — 
Employee stock options9,716 — — — 10,382 — — — 
Employee stock purchase plan
26 — — — 30 — — — 
Restricted stock units and performance stock units
3,687 — — — 4,367 — — — 
Unvested restricted stock in connection with acquisition272 — — — 400 — — — 
Shares issuable upon conversion of the convertible senior notes 8,098 — — — 8,098 — — — 
Number of shares used in diluted calculation356,740 26,103 322,215 25,749 356,650 25,991 320,788