Datadog Inc (DDOG)

Working capital 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
Revenue (ttm)	US$ in thousands	2,834,575	2,684,275	2,536,197	2,393,717	2,257,898	2,128,359	2,008,109	1,897,106	1,793,784	1,675,100	1,531,899	1,365,854	1,193,265	1,028,784	880,117	764,304	670,767	603,466	539,579	480,768
Total current assets	US$ in thousands	5,076,340	4,911,120	3,789,430	3,542,570	3,287,270	3,133,200	2,819,480	2,600,070	2,462,990	2,344,230	2,176,570	2,069,590	2,003,670	1,870,950	1,736,340	1,642,390	1,746,860	1,718,080	1,652,980	1,626,070
Total current liabilities	US$ in thousands	1,854,820	1,862,710	1,780,260	1,790,880	972,793	1,003,050	842,476	761,362	772,954	759,748	674,408	625,876	601,972	528,696	440,202	381,057	320,814	297,844	254,650	241,408
Working capital turnover		0.88	0.88	1.26	1.37	0.98	1.00	1.02	1.03	1.06	1.06	1.02	0.95	0.85	0.77	0.68	0.61	0.47	0.42	0.39	0.35

March 31, 2025 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $2,834,575K ÷ ($5,076,340K – $1,854,820K)
= 0.88

The working capital turnover ratio for Datadog Inc exhibits a general upward trend from June 30, 2020, through June 30, 2022, increasing from approximately 0.35 to 0.95. This escalation suggests that the company has become increasingly efficient in utilizing its working capital to generate revenue within this period. The ratio peaks at 1.06 in December 2022 and remains relatively stable through March 2023, indicating that the company's efficiency in working capital deployment has stabilized at elevated levels.

Following this peak, a slight decline is observed from June 2023 onward, with the ratio decreasing to around 0.88 by December 2024. This indicates a reduction in the efficiency of working capital utilization, which might be attributed to an increase in working capital funds without a commensurate rise in revenue or changes in operational efficiencies. Notably, there is a significant increase in the ratio to 1.37 in June 2024, which could reflect a temporary optimization or a change in revenue recognition or working capital management, before it declines again towards the end of 2024 and into early 2025.

Overall, the data demonstrates that Datadog Inc's working capital turnover ratio experienced a substantial improvement during the initial growth phase, stabilizing at higher levels, followed by periods of fluctuation suggestive of operational adjustments or strategic shifts impacting working capital efficiency.