Datadog Inc (DDOG)

Payables turnover

		Mar 31, 2025	Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020
Cost of revenue (ttm)	US$ in thousands	563,266	515,941	476,800	442,363	420,505	410,116	401,836	392,116	372,195	346,743	317,135	286,868	262,041	234,245	207,952	178,604	150,384	130,197	115,065	104,378
Payables	US$ in thousands	98,442	107,731	92,005	115,991	64,316	87,712	85,362	48,031	41,598	23,474	27,625	47,650	18,629	25,270	34,654	29,257	12,065	21,342	21,199	18,010
Payables turnover		5.72	4.79	5.18	3.81	6.54	4.68	4.71	8.16	8.95	14.77	11.48	6.02	14.07	9.27	6.00	6.10	12.46	6.10	5.43	5.80

March 31, 2025 calculation

Payables turnover = Cost of revenue (ttm) ÷ Payables
= $563,266K ÷ $98,442K
= 5.72

The payables turnover ratio for Datadog Inc exhibits considerable fluctuation over the analyzed period from June 2020 to March 2025. In the initial quarters, the ratio ranged between 5.43 and 6.10, indicating that the company was settling its accounts payable approximately 5 to 6 times annually. A notable rise is observed starting in March 2021, where the ratio sharply increased to 12.46, suggesting that the company either accelerated its payment cycles or managed to reduce its accounts payable balances relative to its cost of goods sold or expenses.

Subsequently, the ratio remains relatively elevated through 2021 and into early 2022, peaking at 14.77 in December 2022. This elevated ratio indicates a potentially aggressive or efficient settlement of payables, concomitant with a shorter average payment period. Conversely, during 2023 and into 2024, the ratio declines significantly, dropping below 6 on multiple occasions, with the lowest point recorded at 3.81 in June 2024. Such a decline suggests an elongation of the average payment period, possibly reflecting changes in payment policy, cash flow management strategies, or supplier negotiations.

Overall, the pattern reveals periods of rapid payables turnover interspersed with phases of slower settlement. The increasing ratio during the latter part of 2021 and through 2022 aligns with a period of more aggressive payables management or improved operational efficiencies. Conversely, the downward trend in 2023 and 2024 indicates a shift toward lengthening payment cycles, which could impact supplier relationships or reflect broader strategic adjustments.

In summary, Datadog Inc’s payables turnover ratio demonstrates significant variability, with a general trend from increased turnover (higher ratios) in late 2021 through 2022 to decreased turnover (lower ratios) in subsequent years. This pattern underscores dynamic changes in the company's short-term liquidity and vendor payment policies over time.