Datadog Inc (DDOG)

Financial leverage 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 assets	US$ in thousands	6,010,380	5,785,340	4,631,470	4,412,390	4,141,470	3,936,070	3,543,300	3,312,170	3,139,740	3,004,850	2,797,600	2,654,490	2,529,020	2,380,790	2,194,170	2,076,730	1,952,070	1,890,280	1,814,280	1,783,710
Total stockholders’ equity	US$ in thousands	2,916,670	2,714,360	2,629,140	2,407,310	2,202,360	2,025,350	1,806,480	1,649,360	1,512,100	1,410,500	1,289,440	1,215,120	1,116,860	1,041,200	957,412	912,879	841,330	957,432	936,188	912,871
Financial leverage ratio		2.06	2.13	1.76	1.83	1.88	1.94	1.96	2.01	2.08	2.13	2.17	2.18	2.26	2.29	2.29	2.27	2.32	1.97	1.94	1.95

March 31, 2025 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $6,010,380K ÷ $2,916,670K
= 2.06

The financial leverage ratio of Datadog Inc. exhibits notable fluctuations over the period from June 2020 to March 2025. Initially, in June 2020, the ratio stood at 1.95, indicating a relatively moderate level of leverage. Throughout the subsequent periods, the ratio experienced a gradual increase, reaching its peak at approximately 2.32 in March 2021. This suggests a period where the company employed increased debt financing relative to equity.

Post this peak, the leverage ratio maintained a relatively high level within the vicinity of 2.27 to 2.29 until the end of 2021, implying sustained leverage during this timeframe. Starting in early 2022, there was a gradual downward trend, with the ratio decreasing to approximately 2.18 by June 2022 and continuing to decline through subsequent quarters, reaching around 1.88 in March 2024. This decline reflects a decreasing reliance on debt financing relative to equity, indicating an internal or strategic shift toward reducing leverage.

In the later part of 2024, the leverage ratio increased again to approximately 2.13 by December 2024, before slightly decreasing to 2.06 in March 2025. Overall, the data indicates a pattern characterized by initial moderate leverage, a period of increased borrowing around 2021, followed by a consistent reduction in leverage levels in 2022 and 2023, with a slight uptick at the end of 2024.

This trend may suggest that Datadog Inc. has been managing its debt levels prudently, aiming to optimize its capital structure by reducing leverage during certain periods while maintaining a balanced approach to financing. The recent fluctuation around the 2.0 mark indicates a balanced leverage position, reflecting prudent financial management and strategic adjustments over the observed period.