Datadog raises forecast after Q1 revenue beat

Reuters reports that cloud security firm Datadog raised its full-year revenue outlook after surpassing first-quarter expectations, driven by growing enterprise demand and AI-fueled workloads.

Datadog reported $761.6 million in revenue for Q1 2025, a 25% year-over-year increase that beat analyst projections of $741.5 million. Adjusted earnings per share reached 46 cents, also topping estimates. The company attributed its strong performance to an expanding customer base, particularly among large enterprises, and the rapid adoption of artificial intelligence, which has elevated demand for cloud observability and security tools. Datadog now expects annual revenue between $3.22 billion and $3.24 billion, up from its earlier range of $3.18 billion to $3.20 billion, exceeding Wall Street’s consensus of $3.20 billion. CEO Olivier Pomel noted the company is accelerating innovation to help customers “observe, secure, and act” in complex cloud environments. Datadog also acquired Eppo, a feature flagging and experimentation startup, to bolster its AI and analytics capabilities and speed up product development for its customers.