Datadog Inc (DDOG)

Payables turnover

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cost of revenue	US$ in thousands	515,531	409,908	346,743	234,245	130,197
Payables	US$ in thousands	107,731	87,712	23,474	25,270	21,342
Payables turnover		4.79	4.67	14.77	9.27	6.10

December 31, 2024 calculation

Payables turnover = Cost of revenue ÷ Payables
= $515,531K ÷ $107,731K
= 4.79

The payables turnover ratio for Datadog Inc demonstrates notable fluctuations over the period from December 31, 2020, to December 31, 2024. At the end of 2020, the ratio stood at 6.10, indicating that the company settled its accounts payable approximately 6.1 times during that year. This ratio increased significantly in 2021 to 9.27, suggesting an improvement in the efficiency of paying off trade payables and a potential shortening of payment cycles.

The upward trend continued into 2022, with the ratio reaching 14.77. This substantial rise reflects an even more accelerated payment process or possibly changes in credit terms or supplier relationships, indicative of optimized working capital management. However, in 2023, the ratio declined sharply to 4.67, which may suggest extensions in payment periods, altered payment strategies, or changes in supplier credit terms. This reduction indicates that the company is settling payables less frequently relative to its purchases or liabilities during that period.

In 2024, the ratio slightly increased again to 4.79, signaling a modest improvement in payables turnover compared to 2023. Nonetheless, this value remains significantly lower than the peak observed in 2022, implying a possible stabilization at a lower level of payment velocity or ongoing adjustments in the company's payables strategy.

Overall, the data indicates a period of rapid improvement in payables turnover throughout 2021 and 2022, followed by a decline in 2023 and a slight recovery in 2024. These fluctuations could reflect changes in operational or financial policies, supplier negotiations, or shifts in working capital management practices.