Datadog Inc. (NASDAQ:DDOG) shares climbed in premarket trading Thursday after the cloud monitoring and security company reported first-quarter results that topped Wall Street expectations, driven by rising demand for artificial intelligence-enabled cloud security products.
Datadog Revenue and Earnings Beat Wall Street Estimates
The software-as-a-service company posted first-quarter revenue of $1.006 billion, up 32% from a year earlier and ahead of analyst estimates of $961.31 million. Adjusted earnings came in at 60 cents per share, beating consensus estimates of 51 cents.
Datadog said it ended the quarter with 4,550 customers generating at least $100,000 in annual recurring revenue, representing a 21% increase from the prior year.
Margins Remain Strong Amid Growth
Adjusted gross margin held steady at 80%, while adjusted operating margin was 22% during the quarter.
The company reported cash, cash equivalents and marketable securities of $4.8 billion as of March 31, 2026. Free cash flow totaled $289 million.
CEO Highlights AI Innovation and Product Expansion
Chief Executive Officer Olivier Pomel said the company delivered a strong quarter as customers increasingly adopted modern cloud-based and AI-enabled technologies.
Pomel also said Datadog is using artificial intelligence to accelerate development across its platform and plans to unveil additional innovations at its DASH user conference in June.
Datadog Second-Quarter Outlook Tops Expectations
For the second quarter, Datadog expects revenue between $1.07 billion and $1.08 billion, above analyst estimates of $994.66 million. The company forecast adjusted earnings of 57 cents to 59 cents per share, compared with consensus estimates of 50 cents.
Raises Full-Year 2026 Guidance
Datadog raised its full-year 2026 outlook, projecting revenue of $4.30 billion to $4.34 billion, up from its prior forecast of $4.06 billion to $4.10 billion. Analysts currently expect revenue of $4.12 billion.
The company also increased its full-year adjusted earnings forecast to between $2.36 and $2.44 per share from its previous outlook of $2.08 to $2.16 per share. Analysts are expecting adjusted earnings of $2.17 per share.
Datadog Stock Surges In Premarket Trading
DDOG Price Action: Datadog shares were up 30.30% at $187.25 during premarket trading on Thursday, according to Benzinga Pro data.
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