Datadog Inc (DDOG)

Current 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
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
Current ratio		2.74	2.64	2.13	1.98	3.38	3.12	3.35	3.42	3.19	3.09	3.23	3.31	3.33	3.54	3.94	4.31	5.45	5.77	6.49	6.74

March 31, 2025 calculation

Current ratio = Total current assets ÷ Total current liabilities
= $5,076,340K ÷ $1,854,820K
= 2.74

The analysis of Datadog Inc's current ratio over the specified period reveals notable trends and shifts in liquidity position. Initially, as of June 30, 2020, the company's current ratio was robust at 6.74, indicating strong short-term liquidity and the ability to cover current liabilities multiple times with current assets. This high ratio persisted through September 30, 2020, at 6.49, and remained elevated through December 31, 2020, at 5.77, suggesting a consistent liquidity cushion during this period.

From the first quarter of 2021 onward, a gradual decline in the current ratio is observed. By March 31, 2021, it decreased to 5.45, and this downward trend continued into subsequent quarters, reaching 4.31 by June 30, 2021, and further declining to 3.94 on September 30, 2021. The ratio continued diminishing through 2022, reaching 3.09 at year-end (December 31, 2022), and slightly fluctuated in the following quarters, with a modest increase to 3.42 on June 30, 2023, before slightly decreasing again to 3.12 by December 31, 2023.

In the more recent periods extending into 2024, the current ratio exhibits a sharper decline, reaching a low of 1.98 as of June 30, 2024. Subsequent quarters show some recovery, with ratios rising to 2.13 in September 2024 and further to 2.64 by December 31, 2024, and 2.74 in March 2025.

Overall, the trend indicates a significant reduction in the company's liquidity position since mid-2020. The high initial ratios suggest a strong liquidity buffer at that time, but the steady decline points to a tightening liquidity situation over time. The recent ratios, hovering around 2.0 to 2.7, suggest a moderate level of short-term liquidity, which remains adequate for operational needs but reflects a diminished buffer compared to earlier periods. This shift warrants attention to the company's liquidity management and its implications for short-term financial stability in the context of its operational and strategic objectives.