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Datadog Raises Q3 Revenue Forecast Amid Growing Cloud Security Demand

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Datadog, the cloud security and monitoring firm, projected third-quarter revenue above Wall Street expectations on Thursday, driven by increasing enterprise investment in AI and cloud technologies. The company’s shares surged over 10% in premarket trading.

Datadog’s platform, used by clients like Samsung, NASDAQ, and Comcast, supports real-time monitoring and analytics of cloud applications to ensure performance, reliability, and security. As businesses accelerate cloud migration and AI adoption, demand for Datadog’s products has risen significantly.

The company unveiled 125 new innovations designed to enhance customers’ ability to observe, secure, and manage complex cloud and AI environments. For Q3, Datadog anticipates revenue between $847 million and $851 million, exceeding analyst estimates of $819.9 million, and adjusted earnings per share of 44 to 46 cents, above the 42-cent forecast.

In Q2, Datadog reported revenue of $827 million, beating estimates of $791.1 million, with adjusted earnings per share of 46 cents versus expected 42 cents.

Data Analytics Startup Coralogix Valued Over $1 Billion After $115 Million Funding Round

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Coralogix, a data analytics and AI observability platform, nearly doubled its valuation to over $1 billion in its latest funding round, the company’s co-founder and CEO Ariel Assaraf told Reuters.

The startup raised $115 million in a round led by California-based venture growth firm NewView Capital, with participation from the Canada Pension Plan Investment Board (CPPIB) and venture firm NextEquity. This funding round follows Coralogix’s $142 million raise in 2022.

Despite a wider slowdown in venture capital for enterprise software-as-a-service (SaaS) startups, driven by elevated interest rates and geopolitical tensions, AI-driven SaaS solutions continue to attract investor interest. According to PitchBook, AI-focused SaaS financing hit a record $58 billion in Q1 2025.

Coralogix’s revenue has grown sevenfold since 2022, but the company is not yet profitable, with nearly 75% of its 2024 revenue reinvested into research and development. Assaraf noted this investment-heavy approach is common among peers such as Datadog and Splunk, who also prioritized R&D before profitability.

The startup has expanded its AI capabilities, notably through the acquisition of Aporia in December 2024, which bolstered its AI observability offerings. Coralogix is aggressively growing its AI talent pool and remains open to strategic acquisitions to enhance its expertise.

In line with its AI focus, Coralogix introduced a new AI agent called “olly”, designed to simplify data monitoring with a conversational interface. Industry experts have recognized AI agents as a transformative application of artificial intelligence in enterprise IT management.

Workday Shares Drop as Lukewarm Subscription Forecast Signals Caution in Tech Budgets

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Workday Inc. saw its shares fall by 5% in extended trading Thursday after forecasting second-quarter subscription revenue that merely met Wall Street expectations, signaling caution amid weakened client spending and ongoing economic uncertainty in the enterprise software market.

The California-based human capital and financial management software provider projected Q2 subscription revenue of $2.16 billion, aligning with analysts’ consensus but doing little to boost investor confidence. The company also reiterated its full-year guidance of $8.8 billion in subscription revenue for fiscal 2026.

“We remain focused on executing in this uncertain environment,” said CFO Zane Rowe.

Despite this cautious outlook, Workday reported solid Q1 results:

  • Total revenue: $2.24 billion (vs. $2.22 billion expected)

  • Subscription revenue: $2.06 billion (slightly above $2.05 billion consensus)

  • Adjusted EPS: $2.23 per share (beating $2.01 estimate)

In tandem with its earnings release, the company announced a new $1 billion share repurchase program, a move often intended to reassure investors amid stock volatility.

Competitive Landscape and Federal Setback

Workday competes against enterprise giants like Oracle and SAP, both of which boast larger back-office software businesses. Analysts note that increased competition in the HR and finance software market may pressure pricing and margins in the coming quarters.

Adding to its recent headwinds, Workday was stripped of a federal HR platform contract earlier this month by the U.S. Office of Personnel Management. The decision followed criticism that the award process did not seek competitive bids. The canceled contract had been connected to efforts from within the Elon Musk-backed campaign to restructure federal workforce management, which could further dampen Workday’s growth in the public sector.

Analyst Outlook

While the company continues to grow and outperform near-term expectations, its muted forecast reflects broader macroeconomic concerns and signals that even resilient SaaS firms are not immune to tightening tech budgets. Analysts expect Workday to maintain its position among top enterprise software providers but caution that client spending softness and lost contracts may limit upside in the short term.