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(Reuters) -Cloud security firm Datadog raised its annual revenue forecast and beat the estimate for quarterly sales on Tuesday, thanks to growth in large customers and AI-driven workloads.
The company has benefited significantly from the increased adoption of artificial intelligence technologies, which has driven strong demand for its cloud monitoring and security platform.
On Monday, Datadog acquired Eppo, a feature flagging and experimentation platform, to expand its AI and product analytics offerings, aiming to help customers build products faster and with less risk.
"We are innovating rapidly across the Datadog platform, to help customers observe, secure, and act to solve mission-critical business problems in their modern, cloud environments," CEO Olivier Pomel said.
Datadog's newer products, such as App Builder and On-Call, are outperforming, and its security monitoring is seeing significant customer interest, analysts have said.
The company now expects full-year 2025 revenue to be between $3.22 billion and $3.24 billion, compared with its prior forecast of between $3.18 billion and $3.20 billion. Analysts on average expect $3.20 billion in annual revenue, according to data compiled by LSEG.
It also forecast second-quarter revenue above estimates.
Total revenue in the first quarter was up 25% from a year earlier to $761.6 million, compared with analysts' estimate of $741.5 million.
On an adjusted basis, the company earned 46 cents per share compared with the estimate of 43 cents per share.
At the end of the first quarter, Datadog had about 3,770 customers with annual recurring revenue of $100,000 or more, an increase of 13% from a year earlier.
(Reporting by Harshita Mary Varghese in Bengaluru; Editing by Vijay Kishore)