Datadog Inc (DDOG)

Cash ratio

		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
Cash and cash equivalents	US$ in thousands	1,079,850	1,246,980	337,418	410,963	282,218	330,339	261,309	291,304	222,548	338,985	294,815	238,859	271,686	270,973	286,966	247,442	369,706	224,927	198,523	206,202
Short-term investments	US$ in thousands	3,369,820	2,942,080	2,861,540	2,549,140	2,499,150	2,252,560	2,080,380	1,894,060	1,795,340	1,545,340	1,471,450	1,464,680	1,399,320	1,283,470	1,180,160	1,162,720	1,178,190	1,292,530	1,296,260	1,259,600
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
Cash ratio		2.40	2.25	1.80	1.65	2.86	2.58	2.78	2.87	2.61	2.48	2.62	2.72	2.78	2.94	3.33	3.70	4.82	5.09	5.87	6.07

March 31, 2025 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($1,079,850K + $3,369,820K) ÷ $1,854,820K
= 2.40

The cash ratio of Datadog Inc. demonstrated a declining trend from June 30, 2020, through early 2022, indicating a gradual reduction in the company's ability to meet its short-term liabilities solely with its most liquid assets. Beginning at a high level of 6.07 in June 2020, the ratio decreased consistently over the subsequent periods, reaching a low of approximately 2.48 by December 31, 2022. This decline reflects a potential increase in current liabilities, a reduction in cash holdings, or a combination of both, suggesting a possible shift in liquidity management strategies.

From December 2022 to June 2023, the cash ratio experienced a modest upward movement, reaching approximately 2.87, indicating a slight improvement in liquidity position during this period. However, this upward trend was short-lived, as subsequent quarters showed oscillations; the ratio decreased again to about 2.58 by December 2023 before rising to 2.86 in March 2024.

Notably, the first two quarters of 2024 exhibited a significant decrease and subsequent rise, with the ratio dropping to 1.65 by June 2024 before climbing to 1.80 in September 2024, and further to 2.25 and 2.40 in the following quarters. These fluctuations suggest variability in the company's cash holdings or short-term liabilities, possibly due to operational or strategic changes.

Overall, the cash ratio has remained within a relatively narrow range after the initial decline, consistently staying below 3.0 from late 2020 onward. This level indicates that while Datadog maintains a reasonable buffer of cash relative to its current liabilities, its liquidity position relies on more than just liquid cash assets, potentially involving other liquid assets or operational efficiencies. The observed fluctuations may reflect ongoing strategic adjustments or external factors impacting liquidity management.