Datadog Inc (DDOG)

Current ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Total current assets	US$ in thousands	4,911,120	3,178,140	2,344,230	1,870,950	1,718,080
Total current liabilities	US$ in thousands	1,862,710	1,003,050	759,748	528,696	297,844
Current ratio		2.64	3.17	3.09	3.54	5.77

December 31, 2024 calculation

Current ratio = Total current assets ÷ Total current liabilities
= $4,911,120K ÷ $1,862,710K
= 2.64

The current ratio of Datadog Inc demonstrates a declining trend over the period from December 31, 2020, to December 31, 2024. At the end of 2020, the company's current ratio was notably high at 5.77, indicating a strong liquidity position where current assets significantly exceeded current liabilities. This ratio decreased markedly in 2021 to 3.54, reflecting a reduction in liquidity but still suggesting a comfortable ability to meet short-term obligations. The trend continued into 2022, with the current ratio declining further to 3.09. Despite this decline, the company maintained a ratio above 3, which generally indicates a robust liquidity cushion.

By the end of 2023, the ratio rose slightly to 3.17, suggesting a marginal improvement or stabilization in liquidity levels near the previous year's mark. However, in 2024, the ratio decreased again to 2.64, approaching a lower, yet still healthy, liquidity margin. Overall, the consistent decline in the current ratio over this four-year span signals a gradual erosion of liquidity margins, possibly attributable to increased current liabilities or changes in current assets. Nonetheless, the ratios remain above 2, which typically signifies adequate short-term financial health, though the decreasing trend warrants ongoing monitoring to assess potential liquidity risks.