Datadog Inc (DDOG)

Quick ratio

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Cash 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
Receivables US$ in thousands 598,919 509,279 399,551 268,824 163,359
Total current liabilities US$ in thousands 1,862,710 1,003,050 759,748 528,696 297,844
Quick ratio 2.57 3.08 3.01 3.45 5.64

December 31, 2024 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($1,246,980K + $2,942,080K + $598,919K) ÷ $1,862,710K
= 2.57

The quick ratio of Datadog Inc demonstrates a trend of significant decline from December 31, 2020, through December 31, 2024. Specifically, the ratio stood at 5.64 in 2020, reflecting a strong liquidity position whereby the company's most liquid assets exceeded current liabilities by more than five times. By December 31, 2021, this ratio decreased substantially to 3.45, indicating an erosion in liquidity but still maintaining a comfortable margin. The downward trajectory continued into 2022, with the ratio further declining to 3.01, suggesting ongoing liquidity tightening.

In 2023, the quick ratio experienced a marginal increase to 3.08, implying a slight improvement or stabilization in the company's liquidity position relative to the previous year. Nonetheless, it remained well below the 2020 peak, indicating that liquidity levels have not returned to earlier robust levels despite the modest uptick in 2023.

By December 31, 2024, the ratio decreased again to 2.57, positioning the company's liquid asset coverage at just over two and a half times its current liabilities. This trajectory suggests a gradual but consistent reduction in liquidity reserves that could potentially influence the company's short-term financial flexibility if the trend persists. Overall, the data reflects a pattern of diminishing liquidity ratios over the four-year period, transitioning from a very strong liquidity position in 2020 to a relatively lower but still acceptable liquidity level in 2024.


See also:

Datadog Inc Quick Ratio