Datadog’s Stock Jumps 20% After Earnings. Its Results Got a Boost From AI Customers
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Key Takeaways
- A growing number of large clients, and demand from AI customers helped Datadog beat quarterly earnings and revenue forecasts, sending shares higher Thursday.
- The cloud-based monitoring and security platform also lifted its full-year outlook.
Datadog (DDOG) shares soared Thursday after the cloud-based monitoring and security platform posted quarterly results that topped analysts’ estimates and raised its outlook.
The stock was up over 20% in recent trading, making it the best-performing stock in the S&P 500 Thursday afternoon.
The company posted adjusted earnings per share of $0.55 for the third quarter, above analysts’ estimates compiled by Visible Alpha. Revenue jumped 28% year-over-year to $885.7 million, also topping forecasts, thanks in part to a growing number of large customers and business from AI clients.
Clients with $100,000 or more in annual recurring revenue were up 16% to about 4,060, and CEO Olivier Pomel told investors the company saw “strong” growth from AI customers when excluding its largest client, according to a transcript provided by AlphaSense.
Why This Is Significant
Datadog’s strong results underscore how a growing number of companies across industries are benefitting from the boom in AI demand, including platforms that offer security services.
Datadog said it now sees full-year adjusted EPS of $2 to $2.02 on revenue of $3.386 billion and $3.390 billion, up from its earlier projection of $1.80 to $1.83 in EPS on revenue of $3.312 billion to $3.322 billion.
With Thursday’s gains, Datadog shares have added about a third of their value in 2025.
