Datadog Inc (DDOG)

Quick 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	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
Receivables	US$ in thousands	490,172	598,919	487,064	533,292	451,057	509,279	400,649	333,102	367,046	399,551	348,830	305,501	275,342	268,824	224,602	188,326	154,111	163,359	120,992	124,078
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
Quick ratio		2.66	2.57	2.07	1.95	3.32	3.08	3.26	3.31	3.09	3.01	3.14	3.21	3.23	3.45	3.84	4.19	5.31	5.64	6.35	6.59

March 31, 2025 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($1,079,850K + $3,369,820K + $490,172K) ÷ $1,854,820K
= 2.66

The quick ratio of Datadog Inc. demonstrates a relatively high level of liquidity throughout the analyzed period, indicating the company's strong short-term financial health. Initially, the quick ratio was notably elevated, starting at 6.59 as of June 30, 2020. This high value suggests that immediate liquid assets, relative to current liabilities, were abundantly sufficient to meet short-term obligations during that time.

Over the subsequent quarters, the ratio experienced a consistent decline, reaching 3.01 by December 31, 2022—signifying a reduction in the company's liquid asset coverage but still maintaining a comfortable margin above 1. This indicates that Datadog retained a robust liquidity buffer, capable of fulfilling its short-term liabilities without relying on inventory sales, which are excluded from the quick ratio calculation.

Between December 2022 and June 2024, the ratio continued to decline, bottoming out at 1.95 as of June 30, 2024. This downward trend reflects either a decrease in liquid assets, an increase in current liabilities, or a combination of both. Nonetheless, the ratio remained above 1, implying that the company's liquid assets continued to cover its current liabilities on a short-term basis, suggesting a moderate level of liquidity risk.

In the most recent data, as of September 30, 2024, the quick ratio increased slightly to 2.07, and further to 2.66 as of March 31, 2025. These upticks may indicate a modest improvement in liquidity positioning, possibly due to an increase in liquid assets or a reduction in short-term liabilities.

Overall, the trend reveals a transition from an initially extremely high quick ratio, indicative of substantial liquidity reserves, toward a more stabilized level closer to typical industry benchmarks. Despite fluctuations, Datadog's quick ratio consistently remained above 1, reflecting a cautious but stable liquidity status suitable for operational resilience.