Datadog (DDOG) stock soared 22% in premarket trading on Thursday, reaching $175.99, after the company reported first-quarter results that easily beat Wall Street expectations and announced a major government certification win. The cloud monitoring and security platform continued to ride the AI infrastructure wave, posting record revenue and lifting its full-year outlook.
Earnings beat and revenue milestone: Adjusted earnings per share came in at $0.60, far above the consensus estimate of $0.51 and up from $0.46 a year ago. Revenue climbed 32% year-over-year to $1 billion, topping the $931.8 million forecast. The company generated $335 million in operating cash flow and $289 million in free cash flow during the quarter. Non-GAAP operating margin stood at 22%.
FedRAMP High Certification: Datadog also secured FedRAMP High Certification for its Datadog for Government offering, allowing it to handle some of the U.S. federal government’s most sensitive unclassified workloads. This opens a new lane of potential public-sector customers that had been largely off-limits without the approval.
Raised guidance: Management boosted its full-year revenue guidance to $4.30–$4.34 billion, up from the prior range of $4.06–$4.1 billion, and raised adjusted EPS outlook to $2.36–$2.44 from $2.08–$2.16. For Q2, the company expects revenue between $1.07 billion and $1.08 billion and non-GAAP EPS of $0.57–$0.59.
AI-driven growth: The company highlighted expanding enterprise demand for observability tools tied to AI infrastructure. It launched GPU Monitoring for general availability, the Bits AI Security Analyst for automated threat investigations, and an MCP Server for AI coding agents. About 4,550 customers generated annual recurring revenue above $100,000, a 21% yearly increase. CEO Olivier Pomel said Datadog is “helping customers of all sizes and industries deploy modern, cloud-based, AI-enabled solutions.”
