Datadog Inc (DDOG)

Cash ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cash and cash equivalents	US$ in thousands	1,246,980	330,339	338,985	270,973	224,927
Short-term investments	US$ in thousands	2,942,080	2,252,560	1,545,340	1,283,470	1,292,530
Total current liabilities	US$ in thousands	1,862,710	1,003,050	759,748	528,696	297,844
Cash ratio		2.25	2.58	2.48	2.94	5.09

December 31, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($1,246,980K + $2,942,080K) ÷ $1,862,710K
= 2.25

The cash ratio for Datadog Inc, as derived from the provided data, demonstrates a declining trend over the period from December 31, 2020, to December 31, 2024. Specifically, the cash ratio was 5.09 at the end of 2020, indicating a very high level of cash and cash equivalents relative to current liabilities. By the end of 2021, it decreased to 2.94, reflecting a significant reduction but still maintaining a solid liquidity position. This downward trajectory continued into 2022, with the ratio declining further to 2.48, suggesting a continued shift in the company's liquidity composition or an increase in current liabilities relative to cash holdings.

In the subsequent year, 2023, the cash ratio experienced a slight increase to 2.58, implying a modest improvement or stabilization in liquidity levels. However, the ratio decreased again in 2024, reaching 2.25, which is the lowest point in the observed period. Despite this decline, the cash ratio remains above 2.0, indicating that the company generally maintains more than twice the amount of cash and cash equivalents relative to its current liabilities.

Overall, the trend indicates a gradual reduction in the company's cash adequacy relative to short-term obligations over the observed period, which may reflect strategic shifts in liquidity management, changes in working capital, or variations in current liabilities. Nonetheless, the ratios suggest that Datadog Inc has maintained a robust liquidity position throughout this timeframe, albeit with diminishing cash coverage relative to current liabilities.