Datadog Raises 2025 Revenue Outlook as AI-Fueled Cloud Security Demand Surges
Datadog has raised its full-year 2025 revenue forecast and posted better-than-expected first-quarter sales, propelled by strong demand for AI-driven cloud security and monitoring tools and a growing base of large enterprise clients.
The cloud infrastructure and observability provider now expects 2025 revenue between $3.22 billion and $3.24 billion, up from its earlier range of $3.18 billion to $3.20 billion, and above Wall Street’s $3.20 billion consensus, according to LSEG.
Datadog’s first-quarter revenue rose 25% year-over-year to $761.6 million, beating analyst expectations of $741.5 million. Adjusted earnings came in at 46 cents per share, also topping forecasts of 43 cents.
CEO Olivier Pomel highlighted rapid innovation across the Datadog platform, stating the company is helping customers “observe, secure, and act” in cloud environments increasingly shaped by artificial intelligence.
Datadog also announced the acquisition of Eppo, a feature flagging and experimentation platform, to enhance its AI and analytics capabilities and support faster, lower-risk product development.
Newer services like App Builder and On-Call are showing strong uptake, and security monitoring is gaining substantial traction among clients. Datadog ended the quarter with approximately 3,770 customers generating over $100,000 in annual recurring revenue, a 13% year-over-year increase.