DATADOG, INC. 
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated financial statements and the related notes and the discussion under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the fiscal year endedDecember 31, 2021 , or the Annual Report. This discussion, particularly information with respect to our future results of operations or financial condition, business strategy, plans and objectives of management for future operations and the potential impact that the ongoing COVID-19 pandemic may have on our business, includes forward-looking statements that involve risks and uncertainties as described under the heading "Special Note Regarding Forward-Looking Statements" in this Quarterly Report on Form 10-Q. You should review the disclosure under the heading "Risk Factors" in this Quarterly Report on Form 10-Q for a discussion of important factors that could cause our actual results to differ materially from those anticipated in these forward-looking statements.
Overview
Our SaaS platform integrates and automates infrastructure monitoring, application performance monitoring, log management and security monitoring to provide unified, real-time observability of our customers' entire technology stack.Datadog is used by organizations of all sizes and across a wide range of industries to enable digital transformation and cloud migration, drive collaboration among development, operations, security, and business teams, accelerate time to market for applications, reduce time to problem resolution, secure applications and infrastructure, understand user behavior and track key business metrics. We generate revenue from the sale of subscriptions to customers using our cloud-based platform. The terms of our subscription agreements are primarily monthly or annual. Customers also have the option to purchase additional products, such as additional containers to monitor, custom metrics packages, anomaly detection and app analytics. Professional services are generally not required for the implementation of our products and revenue from such services has been immaterial to date. We employ a land-and-expand business model centered around offering products that are easy to adopt and have a very short time to value. Our customers can expand their footprint with us on a self-service basis. Our customers often significantly increase their usage of the products they initially buy from us and expand their usage to other products we offer on our platform. We grow with our customers as they expand their workloads in the public and private cloud. As ofMarch 31, 2022 , we had$275.1 million in cash, cash equivalents and restricted cash and$1.4 billion in marketable securities. We generated revenue of$363.0 million and$198.5 million in the three months endedMarch 31, 2022 and 2021, respectively, representing year-over-year growth of 83%. Substantially all of our revenue is subscription software sales. Our net income (loss) was$9.7 million and$(13.1) million for the three months endedMarch 31, 2022 and 2021, respectively. We generated operating cash flow of$147.4 million and$51.7 million in the three months endedMarch 31, 2022 and 2021, respectively. Our free cash flow was$129.9 million and$44.5 million in the three months endedMarch 31, 2022 and 2021, respectively. See the section titled "-Liquidity and Capital Resources-Non-GAAP Free Cash Flow" for additional information. SinceDecember 2019 , a novel strain of coronavirus, which we refer to, together with other related strains of coronavirus, as "COVID-19", has spread across the world, including tothe United States and other countries in which we and our customers, partners, suppliers, vendors and other parties with whom we do business operate. The extent of the impact of the COVID-19 pandemic on our operational and financial performance depends on certain developments, including the duration and spread of the outbreak, especially in light of the emergence of new variant strains of COVID-19, its impact on industry events, and its effect on our customers, partners, suppliers and vendors and other parties with whom we do business, and the availability, distribution and acceptance of vaccines, all of which are uncertain and cannot be predicted at this time. To the extent possible, we are conducting business as usual. Towards the end of the quarter endedMarch 31, 2022 , we increased our office activity, such as in-person meetings, events, and travel in compliance with applicable government orders and guidelines. We are continuing to actively monitor the rapidly evolving situation related to COVID-19 and may take further actions that alter our business operations, including those that may be required by federal, state or local authorities, or that we determine are in the best interests of our employees, customers, partners, suppliers, vendors and stockholders. The extent to which the COVID-19 pandemic, including variant strains of COVID-19, may impact our results of operations and financial condition remains uncertain. Due to our subscription model, the effect of the COVID-19 pandemic, if any, may not be fully reflected in our results of operations until future periods. In addition, as we continue to increase office activity globally, increase travel, participate in 22 --------------------------------------------------------------------------------
and hold more in-person meetings and events, continue hiring and increase capital expenditures for additional office space, our costs and expenses may increase and our margins may decrease in future quarters.
Factors Affecting Our Performance
Acquiring New Customers
We believe there is substantial opportunity to continue to grow our customer base. We intend to drive new customer acquisition by continuing to invest significantly in sales and marketing to engage our prospective customers, increase brand awareness and drive adoption of our platform and products. We also plan to continue to invest in building brand awareness within the development and operations communities. As ofMarch 31, 2022 , we had approximately 19,800 customers spanning organizations of a broad range of sizes and industries, compared to approximately 15,200 as ofMarch 31, 2021 . Our ability to attract new customers will depend on a number of factors, including the effectiveness and pricing of our products, offerings of our competitors and the effectiveness of our marketing efforts. We define the number of customers as the number of accounts with a unique account identifier for which we have an active subscription in the period indicated. Users of our free trials or tier are not included in our customer count. A single organization with multiple divisions, segments or subsidiaries is generally counted as a single customer. However, in some cases where they have separate billing terms, we may count separate divisions, segments or subsidiaries as multiple customers.
Expanding Within Our Existing Customer Base
Our base of customers represents a significant opportunity for further sales expansion. As ofMarch 31, 2022 , we had approximately 2,250 customers with annual run-rate revenue, or ARR, of$100,000 or more, representing 85% of our ARR, up from 1,406 customers as ofMarch 31, 2021 , representing 79% of our ARR. We monitor our number of customers with ARR of$100,000 or more, and believe it is useful to investors, as an indicator of our ability to grow the number of customers that are exceeding this ARR threshold. We define ARR as the annual run-rate revenue of subscription agreements from all customers at a point in time. We calculate ARR by taking the monthly run-rate revenue, or MRR, and multiplying it by 12. MRR for each month is calculated by aggregating, for all customers during that month, monthly revenue from committed contractual amounts, additional usage, usage from subscriptions for a committed contractual amount of usage that is delivered as used and monthly subscriptions. We updated the definition of MRR as of the quarter endedSeptember 30, 2021 to capture usage from subscriptions with committed contractual amounts and applied this change retrospectively. ARR and MRR should be viewed independently of revenue, and do not represent our revenue under GAAP on a monthly or annualized basis, as they are operating metrics that can be impacted by contract start and end dates and renewal rates. ARR and MRR are not intended to be replacements or forecasts of revenue. A further indication of the propensity of our customer relationships to expand over time is our dollar-based net retention rate, which compares our ARR from the same set of customers in one period, relative to the year-ago period. As of each ofMarch 31, 2022 and 2021, our dollar-based net retention rate was above 130%. We calculate dollar-based net retention rate as of a period end by starting with the ARR from the cohort of all customers as of 12 months prior to such period-end, or the Prior Period ARR. We then calculate the ARR from these same customers as of the current period-end, or the Current Period ARR. Current Period ARR includes any expansion and is net of contraction or attrition over the last 12 months, but excludes ARR from new customers in the current period. We then divide the total Current Period ARR by the total Prior Period ARR to arrive at the point-in-time dollar-based net retention rate. We then calculate the weighted average of the trailing 12-month point-in-time dollar-based net retention rates, to arrive at the dollar-based net retention rate. We believe that our land-and-expand business model allows us to efficiently increase revenue from our existing customer base. Our customers often expand the deployment of our platform across large teams and more broadly within the enterprise as they migrate more workloads to the cloud, find new use cases for our platform, and generally realize the benefits of our platform. We intend to continue to invest in enhancing awareness of our brand and developing more products, features and functionality, which we believe are important factors to achieve widespread adoption of our platform. Our ability to increase sales to existing customers will depend on a number of factors, including our customers' satisfaction with our solution, competition, pricing and overall changes in our customers' spending levels.
Sustaining Innovation and Technology Leadership
Our success is dependent on our ability to sustain innovation and technology leadership in order to maintain our competitive advantage. We believe that we have built a highly differentiated platform that will position us to further extend the adoption of our platform and products.Datadog is frequently deployed across a customer's entire infrastructure, making it 23 -------------------------------------------------------------------------------- ubiquitous.Datadog is a daily part of the lives of developers, operations engineers and business leaders. We employ a land-and-expand business model centered around offering products that are easy to adopt and have a very short time to value. Our efficient go-to-market model enables us to prioritize significant investment in innovation. We have proven initial success of our platform approach, through expansion beyond our initial infrastructure monitoring solution, to include APM in 2017, logs in 2018, user experience and network performance monitoring in 2019 and security monitoring in 2020. As ofMarch 31, 2022 , approximately 81% of our customers were using more than one product, up from approximately 75% a year earlier. We believe these metrics indicate strong momentum in the uptake of our newer platform products. We intend to continue to invest in building additional products, features and functionality that expand our capabilities and facilitate the extension of our platform to new use cases. We also intend to continue to evaluate strategic acquisitions and investments in businesses and technologies to drive product and market expansion. Our future success is dependent on our ability to successfully develop, market and sell existing and new products to both new and existing customers.
Expanding Internationally
We believe there is a significant opportunity to expand usage of our platform outside ofNorth America . Revenue, as determined based on the billing address of our customers, from regions outside ofNorth America was approximately 28% of total revenue for the three months endedMarch 31, 2022 and 2021. In addition, we have made and plan to continue to make significant investments to expand geographically, particularly in EMEA and APAC. Although these investments may adversely affect our operating results in the near term, we believe that they will contribute to our long-term growth. BeyondNorth America , we now have sales presence internationally, including inAmsterdam ,Dublin ,London ,Paris ,Seoul ,Singapore ,Sydney , andTokyo .
Components of Results of Operations
Revenue
We generate revenue from the sale of subscriptions to customers using our cloud-based platform. The terms of our subscription agreements are primarily monthly, annual or multi-year, with the majority of our revenue coming from annual subscriptions. Our customers can enter into a subscription for a committed contractual amount of usage that is apportioned ratably on a monthly basis over the term of the subscription period, a subscription for a committed contractual amount of usage that is delivered as used, or a monthly subscription based on usage. To the extent that our customers' usage exceeds the committed contracted amounts under their subscriptions, either on a monthly basis in the case of a ratable subscription or once the entire commitment is used in the case of a delivered-as-used subscription, they are charged for their incremental usage. Usage is measured primarily by the number of hosts or by the volume of data indexed. A host is generally defined as a server, either in the cloud or on-premise. Our infrastructure monitoring, APM and network performance monitoring products are priced per host, our logs product is priced primarily per log events indexed and secondarily by events ingested. Customers also have the option to purchase additional products, such as additional container or serverless monitoring, custom metrics packages, anomaly detection, synthetic monitoring and app analytics. In the case of subscriptions for committed contractual amounts of usage, revenue is recognized ratably over the term of the subscription agreement, generally beginning on the date that our platform is made available to a customer. As a result, much of our revenue is generated from subscriptions entered into during previous periods. Consequently, any decreases in new subscriptions or renewals in any one period may not be immediately reflected as a decrease in revenue for that period, but could negatively affect our revenue in future quarters. This also makes it difficult for us to rapidly increase our revenue through the sale of additional subscriptions in any period, as revenue is recognized over the term of the subscription agreement. In the case of a subscription for a committed contractual amount of usage that is delivered as used, a monthly subscription based on usage, or usage in excess of a ratable subscription, we recognize revenue as the product is used, which may lead to fluctuations in our revenue and results of operations. In addition, historically, we have experienced seasonality in new customer bookings, as we typically enter into a higher percentage of subscription agreements with new customers in the fourth quarter of the year.
Due to ease of implementation of our products, professional services generally are not required and revenue from such services has been immaterial to date.
Cost of Revenue
Cost of revenue primarily consists of expenses related to providing our products
to customers, including payments to our third-party cloud infrastructure
providers for hosting our software, personnel-related expenses for operations
and global
24
--------------------------------------------------------------------------------
support, including salaries, benefits, bonuses and stock-based compensation,
payment processing fees, information technology, depreciation and amortization
related to the amortization of acquired intangibles and internal-use software
and other overhead costs such as allocated facilities.
We intend to continue to invest additional resources in our platform
infrastructure and our customer support and success organizations to expand the
capability of our platform and ensure that our customers are realizing the full
benefit of our platform and products. The level, timing and relative investment
in our infrastructure could affect our cost of revenue in the future.
Gross Profit and Gross Margin
Gross profit represents revenue less cost of revenue. Gross margin is gross profit expressed as a percentage of revenue. Our gross margin may fluctuate from period to period as our revenue fluctuates, and as a result of the timing and amount of investments to expand our products and geographical coverage.
Operating Expenses
Our operating expenses consist of research and development, sales and marketing and general and administrative expenses. Personnel costs are the most significant component of operating expenses and consist of salaries, benefits, bonuses, stock-based compensation expense and sales commissions. Operating expenses also include overhead costs for facilities and shared IT related expenses, including depreciation expense.
Research and Development
Research and development expense consists primarily of personnel costs for our engineering, service and design teams. Additionally, research and development expense includes contractor fees, depreciation and amortization and allocated overhead costs. Research and development costs are expensed as incurred. We expect that our research and development expense will increase in absolute dollars as our business grows, particularly as we incur additional costs related to continued investments in our platform.
Sales and Marketing
Sales and marketing expense consists primarily of personnel costs for our sales and marketing organization, costs of general marketing and promotional activities, including the free tier and free introductory trials of our products, travel-related expenses, amortization of acquired customer relationships and allocated overhead costs. Sales commissions earned by our sales force are deferred and amortized on a straight-line basis over the expected period of benefit, which we have determined to be four years. We expect that our sales and marketing expense will increase in absolute dollars as we expand our sales and marketing efforts.
General and Administrative
General and administrative expense consists primarily of personnel costs and contractor fees for finance, legal, human resources, information technology and other administrative functions. In addition, general and administrative expense includes non-personnel costs, such as legal, accounting and other professional fees, hardware and software costs, certain tax, license and insurance-related expenses and allocated overhead costs. We have incurred, and expect to continue to incur, additional expenses as a result of operating as a public company, including costs to comply with the rules and regulations applicable to companies listed on a national securities exchange, costs related to compliance and reporting obligations and increased expenses for insurance, investor relations and professional services. We expect that our general and administrative expense will increase in absolute dollars as our business grows. Other Income, Net
Other income, net consists of interest income, primarily due to income earned on money market funds included in cash and cash equivalents and on marketable securities, partially offset by interest expense due on the 2025 Notes (as defined below) and amortization of premiums on our marketable securities.
Provision for Income Taxes
25
--------------------------------------------------------------------------------
Provision for income taxes consists of U.S. federal and state income taxes and
income taxes in certain foreign jurisdictions in which we conduct business. We
recorded a full valuation allowance on our federal and state deferred tax assets
as we have concluded that it is not more likely than not that the deferred tax
assets will be realized.
Results of Operations
The following table sets forth our consolidated statements of operations data
for the periods indicated:
Three Months Ended
March 31,
2022 2021
(in thousands)
Revenue $ 363,030 $ 198,549
Cost of revenue (1)(2)(3) 74,462 46,666
Gross profit 288,568 151,883
Operating expenses
Research and development (1)(3) 150,608 79,266
Sales and marketing (1)(2)(3) 101,166 64,353
General and administrative (1)(3) 26,380 21,094
Total operating expenses 278,154 164,713
Operating income (loss) 10,414 (12,830)
Other income:
Interest expense (4) (5,247) (5,472)
Interest income and other income, net 5,687 5,773
Other income, net 440 301
Income (loss) before provision for income taxes 10,854 (12,529)
Provision for income taxes (1,116) (539)
Net income (loss) $ 9,738 $ (13,068)
_________________(1)Includes stock-based compensation expense as follows:
Three Months Ended
March 31,
2022 2021
(in thousands)
Cost of revenue $ 1,653 $ 701
Research and development 44,696 16,069
Sales and marketing 14,595 7,010General and administrative 5,940 5,081 Total
$ 66,884 $ 28,861
_________________
(2)Includes amortization of acquired intangibles expense as follows:
Three Months Ended
March 31,
2022 2021
(in thousands)
Cost of revenue $ 1,413 $ 355
Sales and marketing 203 -
Total $ 1,616 $ 355
26--------------------------------------------------------------------------------
_________________
(3) Includes employer payroll taxes on employee stock transactions as follows:
Three Months Ended
March 31,
2022 2021
(in thousands)
Cost of revenue $ 102 $ 95
Research and development 3,297 1,771
Sales and marketing 1,109 1,179
General and administrative 257 124
Total $ 4,765 $ 3,169
_________________(4) Includes amortization of issuance costs as follows:
Three Months Ended
March 31,
2022 2021
(in thousands)
Interest expense $ 840 $ 835 The following table sets forth our consolidated statements of operations data expressed as a percentage of revenue for the periods indicated:
Three Months Ended
March 31,
2022 2021
(as a percentage of total revenue(1))
Revenue 100 % 100 %
Cost of revenue 21 24
Gross profit 79 76
Operating expenses
Research and development 41 40
Sales and marketing 28 32
General and administrative 7 11
Total operating expenses 77 83
Operating income (loss) 3 (6)
Other income (loss):
Interest expense (1) (3)
Interest income and other income, net 2 3
Other income (loss), net 0 0
Loss before provision for income taxes 3 (6)
Provision for income taxes 0 (1)
Net income (loss) 3 % (7) %
_________________(1)Certain items may not total due to rounding.
Comparison of the Three Months Ended
Revenue
27
--------------------------------------------------------------------------------
Three Months Ended
March 31,
2022 2021 Change % Change
(dollars in thousands)
Revenue $ 363,030 $ 198,549 $ 164,481 83 %
Revenue increased by
Cost of Revenue and Gross Margin
Three Months Ended
March 31,
2022 2021 Change % Change
(dollars in thousands)
Cost of revenue $ 74,462 $ 46,666 $ 27,796 60 %
Gross margin 79 % 76 %
Cost of revenue increased by $27.8 million , or 60%, for the three months ended
March 31, 2022 compared to the three months ended March 31, 2021 . This increase
was primarily due to an increase of $22.4 million in third-party cloud
infrastructure hosting and software costs, an increase of $2.0 million in
personnel expenses as a result of increased headcount, and an increase of $1.8
million in depreciation and amortization expense.
Our gross margin increased by 3% for the three months ended March 31, 2022
compared to the three months ended March 31, 2021 , primarily as a result of
increased revenue and cost savings from our third-party cloud infrastructure
providers.
Research and Development
Three Months Ended
March 31,
2022 2021 Change % Change
(dollars in thousands)
Research and development $ 150,608 $ 79,266 $ 71,342 90 %
Percentage of revenue 41 % 40 %
Research and development expense increased by $71.3 million , or 90%, for the
three months ended March 31, 2022 compared to the three months ended March 31,
2021 . This increase was primarily due to an increase of $57.3 million in
personnel costs for our engineering, product and design teams as a result of
increased headcount, an increase of $10.6 million in cloud
infrastructure-related investments, and an increase of $2.6 million in allocated
overhead costs as a result of an increase in overall costs necessary to support
the growth of the business and related infrastructure.
Sales and Marketing
Three Months Ended
March 31,
2022 2021 Change % Change
(dollars in thousands)
Sales and marketing $ 101,166 $ 64,353 $ 36,813 57 %
Percentage of revenue 28 % 32 %
Sales and marketing expense increased by $36.8 million , or 57%, for the three
months ended March 31, 2022 compared to the three months ended March 31, 2021 .
This increase was primarily due to an increase of $32.2 million in personnel
costs for our sales and marketing organization as a result of increased
headcount and increased variable compensation for our sales personnel, an
increase of $2.2 million in allocated overhead costs as a result of an increase
in overall costs necessary to support the growth of the business and related
infrastructure, and an increase of $1.9 million in advertising, marketing, and
promotional activities.
28
--------------------------------------------------------------------------------
General and Administrative
Three Months Ended
March 31,
2022 2021 Change % Change
(dollars in thousands)
General and administrative $ 26,380 $ 21,094 $ 5,286 25 %
Percentage of revenue 7 % 11 %
General and administrative expense increased by $5.3 million , or 25%, for the
three months ended March 31, 2022 compared to the three months ended March 31,
2021 . This increase was primarily due to an increase of $5.6 million in
personnel costs as a result of increased headcount and an increase of $0.8
million related to bad debt expense. These amounts were partially offset by a
decrease in $1.2 million related to legal fees.
Other Income, Net
Three Months Ended
March 31,
2022 2021 Change % Change
(dollars in thousands)
Other income, net $ 440 $ 301 $ 139 46 %
Percentage of revenue 0 % 0 %
Other income, net increased by $0.1 million , or 46%, for the three months ended
March 31, 2022 compared to the three months ended March 31, 2021 . This increase
was primarily driven by a decrease of $0.2 million in amortization of premiums
on our marketable securities. The increase was partially offset by a decrease of
$0.1 million in interest income, mainly due to income earned from investments in
marketable securities.
Liquidity and Capital Resources
Our largest source of operating cash is cash collection from sales of subscriptions to our customers. Our primary uses of cash from operating activities are for personnel expenses, hosting expenses, facility expenses, and marketing expenses. We have generated positive cash flows from operations during the three months endedMarch 31, 2022 and 2021, and have historically supplemented working capital requirements through net proceeds from the sale of debt and equity securities. When assessing sources of liquidity, we also include cash and cash equivalents of$271.7 million and marketable securities of$1.4 billion as ofMarch 31, 2022 . We believe that our existing cash and cash equivalents, marketable securities and cash flow from operations will be sufficient to support our cash requirements for the next 12 months and beyond. Our working capital requirements are principally comprised of workforce salaries, bonuses, commissions, and benefits and, to a lesser extent, cancellable and non-cancelable licenses and services arrangements that are integral to our business operations, and operating lease obligations. Our principal commitments consist of purchase commitments for business operations, operating lease obligations, and obligations to pay the 2025 Notes' coupons and principal. Purchase commitments for business operations are primarily related to cloud hosting and other software-based services. InJune 2020 , we issued$747.5 million aggregate principal amount of the 2025 Notes in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act. During the three months endedMarch 31, 2022 , there have been no material changes outside the ordinary course of business to our contractual obligations and commitments, as disclosed in Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" of the Annual Report. 29 --------------------------------------------------------------------------------
Cash Flows
The following table shows a summary of our cash flows for the periods presented:
Three Months Ended
March 31,
2022 2021
(in thousands)
Cash provided by operating activities $ 147,388 $ 51,650 Cash (used in) provided by investing activities (150,354) 90,710 Cash provided by financing activities
4,242 3,030
Operating Activities
Net cash provided by operating activities for the three months endedMarch 31, 2022 increased$95.7 million compared to the three months endedMarch 31, 2021 , primarily driven by an increase in non-cash charges of$45.0 million and an increase in deferred revenue of$60.7 million . The increase in non-cash charges related primarily to an increase of$38.0 million in stock-based compensation as we continued to increase headcount to support the growth of the business. The increase in deferred revenue resulted primarily from increased billings for subscriptions. The increase in cash provided by operating activities was offset by an increase in accounts receivable of$16.5 million due to increases in sales.
Investing Activities
Net cash used in investing activities for the three months endedMarch 31, 2022 increased$241.1 million compared to the three months endedMarch 31, 2021 , primarily driven by an increase in the investment of marketable securities of$179.4 million , a decrease in proceeds from maturities of marketable securities of$53.5 million , and an increase in purchases of property and equipment of$8.5 million . The increase in cash used in investing activities was offset by a decrease in proceeds from sales of marketable securities of$6.6 million .
Financing Activities
Net cash provided by financing activities for the three months endedMarch 31, 2022 increased$1.2 million compared to the three months endedMarch 31, 2021 , primarily due to an increase in proceeds from the exercise of stock options.
Non-GAAP Free Cash Flow
We report our financial results in accordance with GAAP. To supplement our
condensed consolidated financial statements, we provide investors with the
amount of free cash flow, which is a non-GAAP financial measure. Free cash flow
represents net cash provided by operating activities, reduced by capital
expenditures and capitalized software development costs, if any. Free cash flow
is a measure used by management to understand and evaluate our liquidity and to
generate future operating plans. The reduction of capital expenditures and
amounts capitalized for software development facilitates comparisons of our
liquidity on a period-to-period basis and excludes items that we do not consider
to be indicative of our liquidity. We believe that free cash flow is a measure
of liquidity that provides useful information to our management, board of
directors, investors and others in understanding and evaluating the strength of
our liquidity and future ability to generate cash that can be used for strategic
opportunities or investing in our business. Nevertheless, our use of free cash
flow has limitations as an analytical tool, and you should not consider it in
isolation or as a substitute for analysis of our financial results as reported
under GAAP. Further, our definition of free cash flow may differ from the
definitions used by other companies and therefore comparability may be limited.
You should consider free cash flow alongside our other GAAP-based financial
performance measures, such as net cash used in operating activities, and our
other GAAP financial results.
30
--------------------------------------------------------------------------------The following table presents a reconciliation of free cash flow to net cash provided by operating activities, the most directly comparable financial measure calculated in accordance with GAAP:
Three Months Ended
March 31,
2022 2021
(in thousands)
Net cash provided by operating activities
$ 129,901 $ 44,469 Critical Accounting Estimates Our condensed consolidated financial statements are prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses and related disclosures. We evaluate our estimates and assumptions on an ongoing basis. Our estimates are based on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Our actual results could differ from these estimates. There have been no material changes to our critical accounting policies from those disclosed in Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" of the Annual Report.
Recently Adopted Accounting Pronouncements
See Note 2, Basis of Presentation and Summary of Significant Accounting Policies, in our Notes to Unaudited Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for a discussion of recent accounting pronouncements.
© Edgar Online, source
