Datadog Inc (DDOG)
Solvency ratios
Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
---|---|---|---|---|---|
Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
Financial leverage ratio | 2.13 | 1.94 | 2.13 | 2.29 | 1.97 |
The solvency ratios for Datadog Inc. from December 31, 2020, through December 31, 2024, indicate a consistent absence of debt obligations, as evidenced by the zero values in the debt-to-assets, debt-to-capital, and debt-to-equity ratios across all periods. Specifically, these ratios remaining at zero suggest that the company has not utilized long-term liabilities or debt financing during this timeframe.
In contrast, the financial leverage ratio, which measures the proportion of total assets financed by shareholders' equity relative to debt (where debt is minimal or absent), shows variation over the same period. It increased from 1.97 in 2020 to 2.29 in 2021, then slightly declined to 2.13 in 2022, before decreasing further to 1.94 in 2023, and returning to 2.13 in 2024. This fluctuation may reflect changes in other liabilities or internal adjustments in asset structures, but overall, the ratios reaffirm a low or nonexistent reliance on debt financing.
In summary, Datadog Inc. maintains an essentially debt-free capital structure over the analyzed period, with its financial leverage ratios indicating reliance on equity or alternative financing sources rather than debt. This positioning suggests a conservative approach to leverage and a potentially strong solvency profile, with minimal risk linked to debt obligations.
Coverage ratios
Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
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Interest coverage | 29.85 | 10.56 | -1.30 | 0.12 | 0.27 |
The interest coverage ratios for Datadog Inc. over the observed period reflect significant fluctuations, indicating shifts in the company’s ability to meet its interest obligations through its earnings before interest and taxes (EBIT).
At the end of December 31, 2020, the ratio stood at 0.27, which suggests that the company's EBIT was only approximately 27% of its interest expenses, highlighting a precarious position with limited earnings to cover interest payments. This trend worsened by the end of December 31, 2021, with the ratio declining further to 0.12, indicating increased difficulty in servicing interest obligations solely from operational earnings.
By December 31, 2022, the interest coverage ratio turned negative at -1.30. A negative ratio generally signifies that the company incurred a net loss or had negative EBIT, thereby rendering it unable to cover its interest expenses from operating income. Such a scenario is often associated with heightened financial risk and potential solvency concerns.
The subsequent year, December 31, 2023, marked a substantial improvement, with the ratio rising to 10.56. This indicates a robust recovery in earnings relative to interest expenses, with EBIT exceeding interest obligations by over ten times. This notable jump suggests a significant enhancement in profitability or reduction in interest burdens during this period.
Looking ahead to December 31, 2024, the projected ratio further escalates to 29.85, reflecting an even stronger ability to cover interest expenses through operating earnings. This elevated ratio signifies a markedly improved financial position with ample operational profit to meet debt service requirements comfortably.
Overall, the data illustrates a trajectory from precarious coverage levels, with very limited ability to service interest in the early years, toward a substantially healthier financial stance in the most recent years and projections. This trend suggests that Datadog Inc. experienced considerable operational improvements and/or deleveraging efforts that enhanced its capacity to cover interest obligations over the analyzed period.