Analysis of Solvency Ratios
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
Solvency Ratios (Summary)
Datadog Inc., solvency ratios
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Debt to Equity
- The debt to equity ratio demonstrates a fluctuating pattern over the five-year period. It increased from 0.6 in 2020 to a peak of 0.71 in 2021, then decreased to its lowest value of 0.37 in 2023, before rising again to 0.59 in 2024. Including operating lease liabilities, the pattern remains similar, with slightly higher values each year, indicating the impact of lease obligations on overall leverage.
- Debt to Capital
- This ratio also follows a similar trend to debt to equity, starting at 0.38 in 2020, peaking at 0.41 in 2021, declining to 0.27 in 2023, and increasing to 0.37 in 2024. When including operating lease liabilities, the ratio values are marginally higher but maintain the same general trend, suggesting a reduction in capital structure leverage in 2023 followed by a moderate increase in 2024.
- Debt to Assets
- Debt to assets ratio experiences a gradual decline from 0.30 in 2020 to 0.19 in 2023, then rises again to 0.28 in 2024. Similar to other leverage metrics, including operating lease liabilities results in consistently higher figures, but the trend remains consistent. The decline until 2023 suggests a decreasing reliance on debt relative to total assets, with a slight reversal in the final year.
- Financial Leverage
- Financial leverage, measured as a ratio, started at 1.97 in 2020, increased to 2.29 in 2021, then declined to 1.94 in 2023 before rising again to 2.13 in 2024. This indicates some variability in the company's use of debt relative to equity, with the highest leverage observed in 2021 and a recovery trend in 2024 after a dip.
- Interest Coverage
- The interest coverage ratio shows significant volatility over the period. Starting at a low coverage of 0.27 in 2020, it dropped to 0.12 in 2021 and further to a negative value (-1.3) in 2022, indicating insufficient earnings to cover interest expenses during that year. A notable recovery occurs in 2023, reaching 10.56, and further improvement in 2024 to 29.85, reflecting a strong ability to meet interest obligations in recent years.
- Fixed Charge Coverage
- Fixed charge coverage remains consistently low in 2020 and 2021, with ratios around 0.53 and 0.55, respectively. It declines sharply in 2022 to 0.09, paralleling the interest coverage trend, indicating strained capacity to cover fixed charges. However, there is a marked recovery in 2023 (2.47) and continued improvement in 2024 (5.09), suggesting enhanced financial stability and operational cash flow generation to cover fixed costs.
Debt Ratios
Coverage Ratios
Debt to Equity
Datadog Inc., debt to equity calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Convertible senior notes, net, current | 634,023) | —) | —) | —) | —) | |
| Convertible senior notes, net, non-current | 979,282) | 742,235) | 738,847) | 735,482) | 575,864) | |
| Total debt | 1,613,305) | 742,235) | 738,847) | 735,482) | 575,864) | |
| Stockholders’ equity | 2,714,363) | 2,025,354) | 1,410,505) | 1,041,203) | 957,432) | |
| Solvency Ratio | ||||||
| Debt to equity1 | 0.59 | 0.37 | 0.52 | 0.71 | 0.60 | |
| Benchmarks | ||||||
| Debt to Equity, Competitors2 | ||||||
| Accenture PLC | 0.04 | 0.01 | 0.00 | 0.00 | 0.00 | |
| Adobe Inc. | 0.40 | 0.22 | 0.29 | 0.28 | 0.31 | |
| Cadence Design Systems Inc. | 0.53 | 0.19 | 0.27 | 0.13 | 0.14 | |
| CrowdStrike Holdings Inc. | 0.32 | 0.51 | 0.72 | 0.85 | 0.00 | |
| Fair Isaac Corp. | — | — | — | — | 2.54 | |
| International Business Machines Corp. | 2.01 | 2.51 | 2.32 | 2.74 | 2.99 | |
| Intuit Inc. | 0.33 | 0.35 | 0.42 | 0.21 | 0.66 | |
| Microsoft Corp. | 0.29 | 0.31 | 0.39 | 0.50 | 0.62 | |
| Oracle Corp. | 9.98 | 84.33 | — | 16.08 | 5.93 | |
| Palantir Technologies Inc. | 0.00 | 0.00 | 0.00 | 0.00 | 0.13 | |
| Palo Alto Networks Inc. | 0.19 | 1.14 | 17.51 | 5.08 | 2.80 | |
| Salesforce Inc. | 0.17 | 0.20 | 0.19 | 0.07 | 0.09 | |
| ServiceNow Inc. | 0.15 | 0.20 | 0.30 | 0.43 | 0.58 | |
| Synopsys Inc. | 0.00 | 0.00 | 0.00 | 0.02 | 0.03 | |
| Workday Inc. | 0.37 | 0.53 | 0.41 | 0.55 | 0.51 | |
| Debt to Equity, Sector | ||||||
| Software & Services | 0.54 | 0.64 | 0.71 | 0.83 | 0.95 | |
| Debt to Equity, Industry | ||||||
| Information Technology | 0.61 | 0.66 | 0.71 | 0.83 | 0.97 | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Debt to equity = Total debt ÷ Stockholders’ equity
= 1,613,305 ÷ 2,714,363 = 0.59
2 Click competitor name to see calculations.
- Total Debt
- The total debt exhibited an increasing trend from 2020 to 2024, rising from 575,864 thousand US dollars in 2020 to 1,613,305 thousand US dollars in 2024. The growth was relatively moderate from 2020 through 2023, with debt increasing gradually each year. However, there was a significant escalation in total debt between 2023 and 2024, more than doubling during this period.
- Stockholders’ Equity
- Stockholders’ equity showed consistent and substantial growth throughout the analyzed period, increasing from 957,432 thousand US dollars in 2020 to 2,714,363 thousand US dollars in 2024. This represents nearly a threefold increase over five years. The growth appears steady, with particularly notable increases in the later years, indicating a strengthening of the company's capital base.
- Debt to Equity Ratio
- The debt to equity ratio fluctuated over the period. It increased from 0.6 in 2020 to 0.71 in 2021, indicating a rise in leverage relative to equity. Subsequently, the ratio declined progressively to 0.52 in 2022 and further to 0.37 in 2023, suggesting a reduction in financial leverage during these years. However, in 2024, the ratio increased sharply to 0.59, reflecting the substantial increase in total debt observed in the same period. Despite this increase, the debt to equity ratio in 2024 remained below the peak level seen in 2021, indicating that equity growth has helped to offset the rise in debt.
- Overall Analysis
- The company demonstrated strong growth in equity capital over the five-year period, which contributed to maintaining a relatively moderate debt to equity ratio despite rising total debt levels. The notable surge in total debt in 2024 suggests increased borrowing which could be aimed at financing expansion or other strategic initiatives. The equity growth appears to have partly mitigated the impact of higher debt on financial leverage, but the uptick in the debt to equity ratio in the most recent year indicates a shift towards higher leverage after several years of reduction. Close monitoring of debt levels and associated risks will be advisable going forward.
Debt to Equity (including Operating Lease Liability)
Datadog Inc., debt to equity (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Convertible senior notes, net, current | 634,023) | —) | —) | —) | —) | |
| Convertible senior notes, net, non-current | 979,282) | 742,235) | 738,847) | 735,482) | 575,864) | |
| Total debt | 1,613,305) | 742,235) | 738,847) | 735,482) | 575,864) | |
| Operating lease liabilities, current | 31,970) | 21,974) | 22,092) | 20,157) | 16,326) | |
| Operating lease liabilities, non-current | 196,905) | 138,128) | 76,582) | 52,106) | 51,433) | |
| Total debt (including operating lease liability) | 1,842,180) | 902,337) | 837,521) | 807,745) | 643,623) | |
| Stockholders’ equity | 2,714,363) | 2,025,354) | 1,410,505) | 1,041,203) | 957,432) | |
| Solvency Ratio | ||||||
| Debt to equity (including operating lease liability)1 | 0.68 | 0.45 | 0.59 | 0.78 | 0.67 | |
| Benchmarks | ||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | ||||||
| Accenture PLC | 0.15 | 0.12 | 0.15 | 0.18 | 0.21 | |
| Adobe Inc. | 0.43 | 0.25 | 0.33 | 0.32 | 0.35 | |
| Cadence Design Systems Inc. | 0.56 | 0.24 | 0.34 | 0.18 | 0.20 | |
| CrowdStrike Holdings Inc. | 0.34 | 0.54 | 0.76 | 0.89 | 0.00 | |
| Fair Isaac Corp. | — | — | — | — | 2.83 | |
| International Business Machines Corp. | 2.14 | 2.66 | 2.46 | 2.92 | 3.23 | |
| Intuit Inc. | 0.36 | 0.39 | 0.46 | 0.25 | 0.71 | |
| Microsoft Corp. | 0.36 | 0.39 | 0.47 | 0.58 | 0.69 | |
| Oracle Corp. | 10.85 | 88.84 | — | 16.61 | 6.10 | |
| Palantir Technologies Inc. | 0.05 | 0.07 | 0.10 | 0.11 | 0.30 | |
| Palo Alto Networks Inc. | 0.27 | 1.33 | 19.12 | 5.68 | 3.16 | |
| Salesforce Inc. | 0.23 | 0.25 | 0.25 | 0.15 | 0.18 | |
| ServiceNow Inc. | 0.24 | 0.30 | 0.44 | 0.60 | 0.75 | |
| Synopsys Inc. | 0.08 | 0.11 | 0.12 | 0.13 | 0.14 | |
| Workday Inc. | 0.41 | 0.58 | 0.46 | 0.68 | 0.63 | |
| Debt to Equity (including Operating Lease Liability), Sector | ||||||
| Software & Services | 0.63 | 0.73 | 0.81 | 0.94 | 1.06 | |
| Debt to Equity (including Operating Lease Liability), Industry | ||||||
| Information Technology | 0.67 | 0.72 | 0.77 | 0.91 | 1.04 | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Stockholders’ equity
= 1,842,180 ÷ 2,714,363 = 0.68
2 Click competitor name to see calculations.
- Total Debt (including operating lease liability)
- The total debt showed a consistent increase from 643,623 thousand US dollars in 2020 to 902,337 thousand US dollars in 2023. There was a marked surge in 2024, reaching 1,842,180 thousand US dollars, more than doubling the previous year's amount.
- Stockholders’ Equity
- Stockholders’ equity demonstrated strong and steady growth over the entire period, rising from 957,432 thousand US dollars in 2020 to 2,714,363 thousand US dollars in 2024. The increase was particularly pronounced from 2022 onward, with a significant acceleration in 2023 and 2024.
- Debt to Equity Ratio (including operating lease liability)
- The debt to equity ratio initially increased from 0.67 in 2020 to 0.78 in 2021, reflecting a higher relative leverage position. Subsequently, it declined to 0.59 in 2022 and further to 0.45 in 2023, indicating a reduction in leverage relative to equity. However, in 2024 the ratio increased again to 0.68, corresponding with the sharp increase in total debt relative to equity growth during that period.
- Overall Analysis
- The financial data reveals a trend of expanding financial size and resources, evidenced by the growth in both total debt and stockholders’ equity. The company appears to have strategically leveraged its capital structure, reducing relative debt levels between 2021 and 2023, which may suggest improved financial stability or equity financing activities. The sharp rise in total debt and resulting increase in the debt to equity ratio in 2024 could indicate increased borrowing, possibly to support growth initiatives or capital expenditures. Despite this, equity continued to grow, maintaining a fairly balanced capital structure.
Debt to Capital
Datadog Inc., debt to capital calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Convertible senior notes, net, current | 634,023) | —) | —) | —) | —) | |
| Convertible senior notes, net, non-current | 979,282) | 742,235) | 738,847) | 735,482) | 575,864) | |
| Total debt | 1,613,305) | 742,235) | 738,847) | 735,482) | 575,864) | |
| Stockholders’ equity | 2,714,363) | 2,025,354) | 1,410,505) | 1,041,203) | 957,432) | |
| Total capital | 4,327,668) | 2,767,589) | 2,149,352) | 1,776,685) | 1,533,296) | |
| Solvency Ratio | ||||||
| Debt to capital1 | 0.37 | 0.27 | 0.34 | 0.41 | 0.38 | |
| Benchmarks | ||||||
| Debt to Capital, Competitors2 | ||||||
| Accenture PLC | 0.03 | 0.01 | 0.00 | 0.00 | 0.00 | |
| Adobe Inc. | 0.29 | 0.18 | 0.23 | 0.22 | 0.24 | |
| Cadence Design Systems Inc. | 0.35 | 0.16 | 0.21 | 0.11 | 0.12 | |
| CrowdStrike Holdings Inc. | 0.24 | 0.34 | 0.42 | 0.46 | 0.00 | |
| Fair Isaac Corp. | 1.77 | 1.59 | 1.76 | 1.10 | 0.72 | |
| International Business Machines Corp. | 0.67 | 0.72 | 0.70 | 0.73 | 0.75 | |
| Intuit Inc. | 0.25 | 0.26 | 0.30 | 0.17 | 0.40 | |
| Microsoft Corp. | 0.23 | 0.24 | 0.28 | 0.33 | 0.38 | |
| Oracle Corp. | 0.91 | 0.99 | 1.09 | 0.94 | 0.86 | |
| Palantir Technologies Inc. | 0.00 | 0.00 | 0.00 | 0.00 | 0.12 | |
| Palo Alto Networks Inc. | 0.16 | 0.53 | 0.95 | 0.84 | 0.74 | |
| Salesforce Inc. | 0.15 | 0.16 | 0.16 | 0.06 | 0.08 | |
| ServiceNow Inc. | 0.13 | 0.16 | 0.23 | 0.30 | 0.37 | |
| Synopsys Inc. | 0.00 | 0.00 | 0.00 | 0.02 | 0.03 | |
| Workday Inc. | 0.27 | 0.35 | 0.29 | 0.35 | 0.34 | |
| Debt to Capital, Sector | ||||||
| Software & Services | 0.35 | 0.39 | 0.42 | 0.45 | 0.49 | |
| Debt to Capital, Industry | ||||||
| Information Technology | 0.38 | 0.40 | 0.41 | 0.45 | 0.49 | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Debt to capital = Total debt ÷ Total capital
= 1,613,305 ÷ 4,327,668 = 0.37
2 Click competitor name to see calculations.
The financial data exhibits a clear evolution in the company's debt and capital structure over the five-year period examined. Total debt follows an upward trajectory, increasing from approximately $576 million at the end of 2020 to about $1.61 billion by the end of 2024. This represents a substantial rise, with the most pronounced increase occurring between 2023 and 2024, where total debt more than doubles compared to prior years.
Total capital also experiences growth through the years, rising from roughly $1.53 billion in 2020 to nearly $4.33 billion by the end of 2024. The increase is steady and marked, with notable acceleration in growth particularly evident in the last two years. This expansion demonstrates an overall strengthening of the company's capital base.
The debt to capital ratio, which measures the proportion of debt within the total capitalization, presents a more varied pattern. It starts at 0.38 in 2020 and increases slightly to 0.41 in 2021, indicating a higher reliance on debt during that year. Subsequently, the ratio declines steadily to 0.27 in 2023, reflecting a reduction in leverage relative to capital growth. However, in 2024, the ratio reverses this trend and climbs back to 0.37, suggesting that the company's leverage has increased once more, though it remains slightly below the peak observed in 2021.
In summary, while both total debt and total capital have grown significantly over the five-year period, the relationship between these two metrics has fluctuated. The company appears to have managed a period of deleveraging through 2022 and 2023, followed by a return to a higher debt level as a proportion of capital in 2024. The rapid increase in total debt and capital in the final year indicates an active phase of financial restructuring or expansion, which merits further examination to assess sustainability and risk.
Debt to Capital (including Operating Lease Liability)
Datadog Inc., debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Convertible senior notes, net, current | 634,023) | —) | —) | —) | —) | |
| Convertible senior notes, net, non-current | 979,282) | 742,235) | 738,847) | 735,482) | 575,864) | |
| Total debt | 1,613,305) | 742,235) | 738,847) | 735,482) | 575,864) | |
| Operating lease liabilities, current | 31,970) | 21,974) | 22,092) | 20,157) | 16,326) | |
| Operating lease liabilities, non-current | 196,905) | 138,128) | 76,582) | 52,106) | 51,433) | |
| Total debt (including operating lease liability) | 1,842,180) | 902,337) | 837,521) | 807,745) | 643,623) | |
| Stockholders’ equity | 2,714,363) | 2,025,354) | 1,410,505) | 1,041,203) | 957,432) | |
| Total capital (including operating lease liability) | 4,556,543) | 2,927,691) | 2,248,026) | 1,848,948) | 1,601,055) | |
| Solvency Ratio | ||||||
| Debt to capital (including operating lease liability)1 | 0.40 | 0.31 | 0.37 | 0.44 | 0.40 | |
| Benchmarks | ||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | ||||||
| Accenture PLC | 0.13 | 0.11 | 0.13 | 0.15 | 0.17 | |
| Adobe Inc. | 0.30 | 0.20 | 0.25 | 0.24 | 0.26 | |
| Cadence Design Systems Inc. | 0.36 | 0.19 | 0.25 | 0.15 | 0.17 | |
| CrowdStrike Holdings Inc. | 0.26 | 0.35 | 0.43 | 0.47 | 0.00 | |
| Fair Isaac Corp. | 1.75 | 1.57 | 1.72 | 1.09 | 0.74 | |
| International Business Machines Corp. | 0.68 | 0.73 | 0.71 | 0.74 | 0.76 | |
| Intuit Inc. | 0.26 | 0.28 | 0.31 | 0.20 | 0.42 | |
| Microsoft Corp. | 0.27 | 0.28 | 0.32 | 0.37 | 0.41 | |
| Oracle Corp. | 0.92 | 0.99 | 1.08 | 0.94 | 0.86 | |
| Palantir Technologies Inc. | 0.05 | 0.06 | 0.09 | 0.10 | 0.23 | |
| Palo Alto Networks Inc. | 0.21 | 0.57 | 0.95 | 0.85 | 0.76 | |
| Salesforce Inc. | 0.19 | 0.20 | 0.20 | 0.13 | 0.16 | |
| ServiceNow Inc. | 0.19 | 0.23 | 0.31 | 0.37 | 0.43 | |
| Synopsys Inc. | 0.07 | 0.10 | 0.11 | 0.11 | 0.12 | |
| Workday Inc. | 0.29 | 0.37 | 0.32 | 0.41 | 0.39 | |
| Debt to Capital (including Operating Lease Liability), Sector | ||||||
| Software & Services | 0.39 | 0.42 | 0.45 | 0.48 | 0.51 | |
| Debt to Capital (including Operating Lease Liability), Industry | ||||||
| Information Technology | 0.40 | 0.42 | 0.44 | 0.48 | 0.51 | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 1,842,180 ÷ 4,556,543 = 0.40
2 Click competitor name to see calculations.
- Total Debt (including operating lease liability)
- The total debt shows a consistent upward trend from 2020 through 2024. It increased from approximately $643.6 million at the end of 2020 to around $902.3 million by the end of 2023, followed by a significant jump to $1.842 billion in 2024. This substantial increase in 2024 suggests a major financing event or increased borrowing during that year.
- Total Capital (including operating lease liability)
- Total capital exhibits a steady growth pattern over the entire period analyzed. Starting at about $1.6 billion in 2020, it rose annually to reach nearly $2.928 billion by 2023, before making a more pronounced leap to $4.556 billion in 2024. The sharp increase in 2024 corresponds with the increase in total debt, indicating overall expansion of the company's financed resources.
- Debt to Capital Ratio (including operating lease liability)
- This ratio initially increased from 0.40 in 2020 to 0.44 in 2021, indicating a higher proportion of debt relative to capital in that year. However, it then decreased steadily to 0.37 in 2022 and further to 0.31 in 2023, reflecting a reduction in leverage and a more conservative capital structure during this period. Notably, in 2024, the ratio returned to 0.40, aligning more closely with the 2020 level, suggesting the recent increase in debt was matched by a proportional increase in capital.
- Overall Analysis
- The data indicates that while both total debt and total capital increased throughout the period, the company managed to reduce its leverage ratio from 2021 through 2023, possibly through capital growth outpacing debt growth. The reversal of this trend in 2024 with a sharp rise in both debt and capital, and a return to a previous debt-to-capital ratio level, signals a strategic shift or major capital investment financed through increased borrowing. This pattern could merit further examination of the underlying causes and potential implications for financial risk and cost of capital.
Debt to Assets
Datadog Inc., debt to assets calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Convertible senior notes, net, current | 634,023) | —) | —) | —) | —) | |
| Convertible senior notes, net, non-current | 979,282) | 742,235) | 738,847) | 735,482) | 575,864) | |
| Total debt | 1,613,305) | 742,235) | 738,847) | 735,482) | 575,864) | |
| Total assets | 5,785,339) | 3,936,072) | 3,004,852) | 2,380,794) | 1,890,285) | |
| Solvency Ratio | ||||||
| Debt to assets1 | 0.28 | 0.19 | 0.25 | 0.31 | 0.30 | |
| Benchmarks | ||||||
| Debt to Assets, Competitors2 | ||||||
| Accenture PLC | 0.02 | 0.00 | 0.00 | 0.00 | 0.00 | |
| Adobe Inc. | 0.19 | 0.12 | 0.15 | 0.15 | 0.17 | |
| Cadence Design Systems Inc. | 0.28 | 0.11 | 0.15 | 0.08 | 0.09 | |
| CrowdStrike Holdings Inc. | 0.11 | 0.15 | 0.20 | 0.27 | 0.00 | |
| Fair Isaac Corp. | 1.29 | 1.18 | 1.29 | 0.80 | 0.52 | |
| International Business Machines Corp. | 0.40 | 0.42 | 0.40 | 0.39 | 0.39 | |
| Intuit Inc. | 0.19 | 0.22 | 0.25 | 0.13 | 0.31 | |
| Microsoft Corp. | 0.15 | 0.16 | 0.18 | 0.21 | 0.24 | |
| Oracle Corp. | 0.62 | 0.67 | 0.69 | 0.64 | 0.62 | |
| Palantir Technologies Inc. | 0.00 | 0.00 | 0.00 | 0.00 | 0.07 | |
| Palo Alto Networks Inc. | 0.05 | 0.14 | 0.30 | 0.31 | 0.34 | |
| Salesforce Inc. | 0.10 | 0.12 | 0.12 | 0.04 | 0.06 | |
| ServiceNow Inc. | 0.07 | 0.09 | 0.11 | 0.15 | 0.19 | |
| Synopsys Inc. | 0.00 | 0.00 | 0.00 | 0.01 | 0.02 | |
| Workday Inc. | 0.18 | 0.22 | 0.18 | 0.21 | 0.19 | |
| Debt to Assets, Sector | ||||||
| Software & Services | 0.23 | 0.25 | 0.26 | 0.28 | 0.30 | |
| Debt to Assets, Industry | ||||||
| Information Technology | 0.25 | 0.26 | 0.26 | 0.29 | 0.31 | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Debt to assets = Total debt ÷ Total assets
= 1,613,305 ÷ 5,785,339 = 0.28
2 Click competitor name to see calculations.
The financial data reveals several key trends regarding the company's balance sheet structure over the analyzed period.
- Total Debt
- The total debt exhibited a steady upward trend from 2020 through 2023, rising from approximately $576 million to about $742 million. However, in 2024, there was a substantial increase, more than doubling the total debt to over $1.6 billion. This sharp rise suggests a significant change in the company's financing strategy or capital structure during the final year.
- Total Assets
- Total assets consistently increased each year, showing robust growth from approximately $1.9 billion in 2020 to nearly $5.8 billion by the end of 2024. This steady upward movement indicates ongoing expansion or investment activities over the five-year span.
- Debt to Assets Ratio
- The ratio of debt to assets started at 0.30 in 2020 and remained relatively stable through 2021 (0.31). From 2021 to 2023, the ratio steadily declined, reaching a low of 0.19, indicating that asset growth outpaced debt growth during this period, thus improving the company's leverage position. However, in 2024, the ratio rebounded to 0.28, reflecting the sharp increase in total debt relative to assets. Despite this increase, the ratio remains below the initial levels noted in 2020 and 2021.
In summary, the company expanded significantly in terms of total assets over the five-year horizon, with a period of deleveraging between 2021 and 2023 followed by a notable increase in debt in 2024. This increase in leverage in the most recent period warrants further inquiry into the underlying causes, such as financing new projects, acquisitions, or other strategic initiatives.
Debt to Assets (including Operating Lease Liability)
Datadog Inc., debt to assets (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Convertible senior notes, net, current | 634,023) | —) | —) | —) | —) | |
| Convertible senior notes, net, non-current | 979,282) | 742,235) | 738,847) | 735,482) | 575,864) | |
| Total debt | 1,613,305) | 742,235) | 738,847) | 735,482) | 575,864) | |
| Operating lease liabilities, current | 31,970) | 21,974) | 22,092) | 20,157) | 16,326) | |
| Operating lease liabilities, non-current | 196,905) | 138,128) | 76,582) | 52,106) | 51,433) | |
| Total debt (including operating lease liability) | 1,842,180) | 902,337) | 837,521) | 807,745) | 643,623) | |
| Total assets | 5,785,339) | 3,936,072) | 3,004,852) | 2,380,794) | 1,890,285) | |
| Solvency Ratio | ||||||
| Debt to assets (including operating lease liability)1 | 0.32 | 0.23 | 0.28 | 0.34 | 0.34 | |
| Benchmarks | ||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | ||||||
| Accenture PLC | 0.07 | 0.06 | 0.07 | 0.08 | 0.09 | |
| Adobe Inc. | 0.20 | 0.14 | 0.17 | 0.17 | 0.19 | |
| Cadence Design Systems Inc. | 0.29 | 0.14 | 0.18 | 0.11 | 0.13 | |
| CrowdStrike Holdings Inc. | 0.12 | 0.16 | 0.21 | 0.29 | 0.00 | |
| Fair Isaac Corp. | 1.31 | 1.21 | 1.33 | 0.85 | 0.58 | |
| International Business Machines Corp. | 0.43 | 0.44 | 0.42 | 0.42 | 0.43 | |
| Intuit Inc. | 0.20 | 0.24 | 0.27 | 0.16 | 0.33 | |
| Microsoft Corp. | 0.19 | 0.19 | 0.21 | 0.25 | 0.27 | |
| Oracle Corp. | 0.67 | 0.71 | 0.73 | 0.66 | 0.64 | |
| Palantir Technologies Inc. | 0.04 | 0.05 | 0.07 | 0.08 | 0.17 | |
| Palo Alto Networks Inc. | 0.07 | 0.16 | 0.33 | 0.35 | 0.38 | |
| Salesforce Inc. | 0.14 | 0.15 | 0.15 | 0.10 | 0.11 | |
| ServiceNow Inc. | 0.11 | 0.13 | 0.17 | 0.21 | 0.24 | |
| Synopsys Inc. | 0.05 | 0.07 | 0.07 | 0.08 | 0.08 | |
| Workday Inc. | 0.20 | 0.24 | 0.20 | 0.26 | 0.23 | |
| Debt to Assets (including Operating Lease Liability), Sector | ||||||
| Software & Services | 0.27 | 0.29 | 0.30 | 0.32 | 0.34 | |
| Debt to Assets (including Operating Lease Liability), Industry | ||||||
| Information Technology | 0.27 | 0.28 | 0.29 | 0.31 | 0.33 | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 1,842,180 ÷ 5,785,339 = 0.32
2 Click competitor name to see calculations.
- Total debt (including operating lease liability)
- The total debt exhibited a general upward trajectory over the five-year period. Starting at $643.6 million in 2020, it increased moderately each year until 2023, reaching $902.3 million. There was a significant spike by the end of 2024, with total debt more than doubling to approximately $1.84 billion. This sharp increase suggests a potential strategic decision to leverage more debt, possibly for expansion or large investments.
- Total assets
- Total assets consistently grew each year, reflecting ongoing asset accumulation and expansion of the company's resource base. Beginning at $1.89 billion in 2020, assets rose steadily to nearly $3 billion by 2022, then jumped to approximately $3.94 billion in 2023 and surged again to $5.79 billion in 2024. The steady asset growth aligns with the scale of operations expanding significantly during this period.
- Debt to assets ratio (including operating lease liability)
- The debt to asset ratio showed a declining trend from 0.34 in 2020 to a low of 0.23 in 2023, indicating that asset growth outpaced increases in debt during this interval, improving leverage and potentially indicating better solvency. However, this ratio reversed course in 2024, rising back to 0.32, correlating with the marked increase in total debt. Despite the growth in assets, the relatively faster rise in debt implies a leverage increase, which may raise financial risk considerations.
Financial Leverage
Datadog Inc., financial leverage calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Total assets | 5,785,339) | 3,936,072) | 3,004,852) | 2,380,794) | 1,890,285) | |
| Stockholders’ equity | 2,714,363) | 2,025,354) | 1,410,505) | 1,041,203) | 957,432) | |
| Solvency Ratio | ||||||
| Financial leverage1 | 2.13 | 1.94 | 2.13 | 2.29 | 1.97 | |
| Benchmarks | ||||||
| Financial Leverage, Competitors2 | ||||||
| Accenture PLC | 1.98 | 1.99 | 2.14 | 2.21 | 2.18 | |
| Adobe Inc. | 2.14 | 1.80 | 1.93 | 1.84 | 1.83 | |
| Cadence Design Systems Inc. | 1.92 | 1.67 | 1.87 | 1.60 | 1.58 | |
| CrowdStrike Holdings Inc. | 2.88 | 3.43 | 3.53 | 3.14 | 1.89 | |
| Fair Isaac Corp. | — | — | — | — | 4.85 | |
| International Business Machines Corp. | 5.02 | 6.00 | 5.80 | 6.98 | 7.57 | |
| Intuit Inc. | 1.74 | 1.61 | 1.69 | 1.57 | 2.14 | |
| Microsoft Corp. | 1.91 | 2.00 | 2.19 | 2.35 | 2.55 | |
| Oracle Corp. | 16.20 | 125.24 | — | 25.03 | 9.56 | |
| Palantir Technologies Inc. | 1.27 | 1.30 | 1.35 | 1.42 | 1.77 | |
| Palo Alto Networks Inc. | 3.87 | 8.29 | 58.35 | 16.14 | 8.23 | |
| Salesforce Inc. | 1.67 | 1.69 | 1.64 | 1.60 | 1.63 | |
| ServiceNow Inc. | 2.12 | 2.28 | 2.64 | 2.92 | 3.07 | |
| Synopsys Inc. | 1.45 | 1.68 | 1.71 | 1.65 | 1.64 | |
| Workday Inc. | 2.04 | 2.41 | 2.31 | 2.66 | 2.74 | |
| Financial Leverage, Sector | ||||||
| Software & Services | 2.35 | 2.55 | 2.73 | 2.95 | 3.13 | |
| Financial Leverage, Industry | ||||||
| Information Technology | 2.46 | 2.55 | 2.69 | 2.89 | 3.12 | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Financial leverage = Total assets ÷ Stockholders’ equity
= 5,785,339 ÷ 2,714,363 = 2.13
2 Click competitor name to see calculations.
- Total assets
- The total assets show a consistent upward trend over the five-year period, increasing from approximately 1.89 billion US dollars at the end of 2020 to about 5.79 billion US dollars by the end of 2024. This represents a significant overall growth, with particularly notable acceleration in the latter years, indicating substantial asset accumulation.
- Stockholders’ equity
- Stockholders’ equity also demonstrates a steady increase throughout the timeframe, rising from around 957 million US dollars in 2020 to approximately 2.71 billion US dollars in 2024. The growth pattern resembles that of total assets, with a marked expansion, especially after 2022, suggesting enhanced retained earnings or additional capital contributions.
- Financial leverage
- The financial leverage ratio fluctuates moderately across the years. Starting at 1.97 in 2020, it rises to 2.29 in 2021, then declines to 2.13 in 2022 and further to 1.94 in 2023, before increasing again to 2.13 in 2024. These variations imply changes in the capital structure, with periods of increased reliance on debt relative to equity, balanced by phases of deleveraging, ultimately indicating a maintained leverage level close to two times over the period.
- Overall insights
- The data suggests robust growth in both total assets and equity, reflective of an expanding business scale and stronger equity base. The relatively stable financial leverage ratio indicates careful management of debt relative to equity, balancing growth with financial risk. The increasing equity alongside asset growth points towards sustainable expansion supported by growing net worth.
Interest Coverage
Datadog Inc., interest coverage calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net income (loss) | 183,746) | 48,568) | (50,160) | (20,745) | (24,547) | |
| Add: Income tax expense | 20,194) | 11,667) | 12,090) | 2,323) | 2,325) | |
| Add: Interest expense | 7,068) | 6,302) | 16,535) | 21,052) | 30,434) | |
| Earnings before interest and tax (EBIT) | 211,008) | 66,537) | (21,535) | 2,630) | 8,212) | |
| Solvency Ratio | ||||||
| Interest coverage1 | 29.85 | 10.56 | -1.30 | 0.12 | 0.27 | |
| Benchmarks | ||||||
| Interest Coverage, Competitors2 | ||||||
| Accenture PLC | 165.48 | 193.31 | 195.34 | 131.46 | 205.84 | |
| Adobe Inc. | 42.01 | 61.17 | 54.64 | 51.49 | 37.00 | |
| Cadence Design Systems Inc. | 19.37 | 36.43 | 46.58 | 46.26 | 31.50 | |
| CrowdStrike Holdings Inc. | 5.77 | -5.31 | -5.34 | -55.36 | -315.25 | |
| Fair Isaac Corp. | 7.08 | 6.79 | 7.83 | 12.80 | 7.09 | |
| International Business Machines Corp. | 4.40 | 6.42 | 1.97 | 5.20 | 4.62 | |
| Intuit Inc. | 15.67 | 13.05 | 32.38 | 89.14 | 158.00 | |
| Microsoft Corp. | 37.72 | 46.38 | 41.58 | 31.31 | 21.47 | |
| Oracle Corp. | 4.39 | 3.65 | 3.84 | 6.28 | 7.13 | |
| Palantir Technologies Inc. | — | 69.33 | -87.97 | -133.20 | -82.39 | |
| Palo Alto Networks Inc. | 120.07 | 21.82 | -6.56 | -1.85 | -1.61 | |
| Salesforce Inc. | 18.49 | 3.20 | 7.93 | 21.49 | 6.43 | |
| ServiceNow Inc. | 76.57 | 43.00 | 15.78 | 9.89 | 5.56 | |
| Synopsys Inc. | 44.06 | 1,106.08 | 657.96 | 240.38 | 125.16 | |
| Workday Inc. | 4.12 | -1.54 | 1.97 | -3.00 | -7.22 | |
| Interest Coverage, Sector | ||||||
| Software & Services | 17.98 | 17.21 | 18.04 | 17.29 | 13.91 | |
| Interest Coverage, Industry | ||||||
| Information Technology | 19.56 | 17.69 | 22.63 | 19.89 | 14.12 | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Interest coverage = EBIT ÷ Interest expense
= 211,008 ÷ 7,068 = 29.85
2 Click competitor name to see calculations.
- Earnings before interest and tax (EBIT)
- The EBIT shows a significant fluctuation over the five-year period. Initially, there was a positive EBIT of 8,212 thousand USD in 2020, which decreased substantially to 2,630 thousand USD in 2021. In 2022, EBIT turned negative, reaching -21,535 thousand USD, indicating operational losses before interest and tax. However, there was a notable recovery in 2023 with EBIT rising sharply to 66,537 thousand USD, followed by a further substantial increase to 211,008 thousand USD in 2024, suggesting a strong improvement in operational profitability.
- Interest expense
- Interest expense exhibited a declining trend from 30,434 thousand USD in 2020 to 6,302 thousand USD in 2023, representing a significant reduction in interest costs over this period. In 2024, there was a slight increase to 7,068 thousand USD, but overall, the trend indicates effective management or reduction of debt-related costs after 2020.
- Interest coverage ratio
- The interest coverage ratio, which measures the ability to meet interest obligations from operating earnings, followed a pattern aligned with EBIT performance. It was extremely low in 2020 at 0.27 and fell further to 0.12 in 2021, reflecting limited ability to cover interest expenses. In 2022, the ratio turned negative at -1.3, consistent with negative EBIT. A strong recovery occurred in 2023, with the ratio increasing to 10.56, demonstrating a comfortable coverage level, and it further improved significantly to 29.85 in 2024, indicating very strong capacity to cover interest expenses from earnings.
Fixed Charge Coverage
Datadog Inc., fixed charge coverage calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net income (loss) | 183,746) | 48,568) | (50,160) | (20,745) | (24,547) | |
| Add: Income tax expense | 20,194) | 11,667) | 12,090) | 2,323) | 2,325) | |
| Add: Interest expense | 7,068) | 6,302) | 16,535) | 21,052) | 30,434) | |
| Earnings before interest and tax (EBIT) | 211,008) | 66,537) | (21,535) | 2,630) | 8,212) | |
| Add: Operating lease cost | 42,855) | 34,670) | 25,212) | 20,198) | 17,081) | |
| Earnings before fixed charges and tax | 253,863) | 101,207) | 3,677) | 22,828) | 25,293) | |
| Interest expense | 7,068) | 6,302) | 16,535) | 21,052) | 30,434) | |
| Operating lease cost | 42,855) | 34,670) | 25,212) | 20,198) | 17,081) | |
| Fixed charges | 49,923) | 40,972) | 41,747) | 41,250) | 47,515) | |
| Solvency Ratio | ||||||
| Fixed charge coverage1 | 5.09 | 2.47 | 0.09 | 0.55 | 0.53 | |
| Benchmarks | ||||||
| Fixed Charge Coverage, Competitors2 | ||||||
| Accenture PLC | 13.46 | 10.98 | 12.25 | 10.41 | 9.66 | |
| Adobe Inc. | 26.20 | 30.56 | 26.79 | 25.59 | 18.77 | |
| Cadence Design Systems Inc. | 11.13 | 14.79 | 15.50 | 13.77 | 11.46 | |
| CrowdStrike Holdings Inc. | 3.98 | -3.39 | -3.39 | -6.40 | -12.01 | |
| Fair Isaac Corp. | 6.35 | 5.94 | 6.39 | 8.93 | 4.91 | |
| International Business Machines Corp. | 3.13 | 4.32 | 1.52 | 3.13 | 2.62 | |
| Intuit Inc. | 11.14 | 9.03 | 14.67 | 25.58 | 27.48 | |
| Microsoft Corp. | 17.61 | 19.44 | 19.50 | 16.90 | 12.44 | |
| Oracle Corp. | 3.55 | 3.12 | 3.22 | 5.17 | 5.68 | |
| Palantir Technologies Inc. | 9.48 | 4.62 | -5.06 | -7.89 | -16.41 | |
| Palo Alto Networks Inc. | 12.78 | 7.20 | -1.18 | -1.09 | -0.52 | |
| Salesforce Inc. | 4.74 | 1.51 | 2.18 | 2.92 | 1.68 | |
| ServiceNow Inc. | 12.36 | 7.59 | 3.87 | 2.95 | 2.29 | |
| Synopsys Inc. | 12.88 | 14.38 | 12.91 | 9.29 | 7.46 | |
| Workday Inc. | 2.60 | -0.29 | 1.15 | -0.69 | -2.35 | |
| Fixed Charge Coverage, Sector | ||||||
| Software & Services | 9.98 | 9.46 | 9.41 | 9.20 | 7.41 | |
| Fixed Charge Coverage, Industry | ||||||
| Information Technology | 12.42 | 11.32 | 13.42 | 12.19 | 9.02 | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 253,863 ÷ 49,923 = 5.09
2 Click competitor name to see calculations.
- Earnings before fixed charges and tax
-
The earnings before fixed charges and tax demonstrated a fluctuating trend over the analyzed periods. Initially, there was a slight decline from 25,293 thousand US dollars in 2020 to 22,828 thousand in 2021. This was followed by a significant drop to 3,677 thousand in 2022. However, the company showed a strong recovery in the subsequent years, with earnings rising sharply to 101,207 thousand in 2023 and more than doubling to 253,863 thousand in 2024.
- Fixed charges
-
Fixed charges slightly decreased from 47,515 thousand US dollars in 2020 to 41,250 thousand in 2021. In 2022, the fixed charges remained relatively stable at 41,747 thousand and continued around this level with 40,972 thousand in 2023. A modest increase was observed in 2024, with fixed charges rising to 49,923 thousand.
- Fixed charge coverage ratio
-
The fixed charge coverage ratio mirrored the fluctuations in earnings before fixed charges and tax. It started below 1 at 0.53 in 2020 and slightly increased to 0.55 in 2021. In 2022, the ratio experienced a sharp decline to 0.09, indicating significant difficulties in covering fixed charges with earnings. A strong recovery occurred in 2023, with the ratio rising to 2.47, indicating that earnings were more than sufficient to cover fixed charges. The upward trend continued in 2024, reaching a robust coverage ratio of 5.09, reflecting considerable improvement in financial stability and earnings capacity relative to fixed charges.
- Summary
-
Overall, the data reveals a period of financial challenge in 2022, characterized by a steep decline in earnings and a very low fixed charge coverage ratio, suggesting potential liquidity or profitability concerns. Subsequent years show a marked recovery and improvement, with earnings growing substantially and fixed charge coverage increasing to healthy levels. Fixed charges remained relatively stable throughout the timeframe, with only minor fluctuations. The company's capacity to cover its fixed charges strengthened considerably from 2023 onward, indicating a more solid financial position.