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💡 Main takeaway:
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Key takeaways
- A growing number of large customers and demand from artificial intelligence clients helped Datadog beat quarterly earnings and revenue expectations, sending shares higher on Thursday.
- The cloud monitoring and security platform also raised its full-year outlook.
Shares of Datadog (DDOG) rose Thursday after the cloud monitoring and security platform posted quarterly results that beat analyst estimates and raised its forecasts.
The stock rose 23% to close near $191, making it the best-performing stock in the S&P 500 on Thursday.
The company reported adjusted earnings per share of $0.55 for the third quarter, above analyst estimates compiled by Visible Alpha. Revenue jumped 28% year over year to $885.7 million, also beating expectations, thanks in part to a growing number of large, business-to-business AI clients.
The number of customers with annual recurring revenue of $100,000 or more rose 16% to about 4,060, and CEO Olivier Baumel told investors that the company saw “strong” growth from AI customers when excluding its largest customer, according to a transcript provided by AlphaSense.
Why is this important?
Datadog’s strong results underscore how a growing number of companies across industries are benefiting from the surge in demand for AI, including platforms that provide security services.
Datadog said it now expects full-year adjusted EPS of $2 to $2.02 on revenue of $3.386 billion and $3.390 billion, up from its previous forecast of $1.80 to $1.83 EPS on revenue of $3.312 billion to $3.322 billion.
With Thursday’s gains, Datadog shares added about a third of their value in 2025.
This article has been updated since it was first published to reflect the most recent stock prices.
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