Datadog Ups Q4 Revenue Expectations, Fuelled by AI Demand

Post by : Bianca Suleiman

Datadog is poised for an impressive close in 2025, projecting fourth-quarter earnings that exceed Wall Street's expectations, spurred by the growing adoption of artificial intelligence and cloud solutions.

The cloud-monitoring and security firm anticipates revenue between $912 million and $916 million for the final quarter, outpacing analysts' forecast of $887.27 million. Its adjusted earnings per share are expected to range from 54 to 56 cents, compared to the anticipated 46 cents.

Following the announcement, Datadog's shares surged nearly 10% in premarket trading, building on an 8.5% increase this year. Investors are responding to the increasing demand for the company's AI-driven security and monitoring solutions, which assist businesses in tracking devices, managing access, and ensuring their cloud infrastructure's real-time security.

The company has experienced rapid growth in recent quarters. In Q3, Datadog reported revenue of $885.65 million, reflecting a 28% year-over-year growth and surpassing the analyst estimate of $852.78 million. The adjusted earnings per share stood at 55 cents, exceeding the projection of 47 cents.

Since its addition to the S&P 500 in July, Datadog has enhanced its presence in the corporate sector, serving major clients like Shell, PayPal, and Comcast. Analysts indicate that the surge in AI adoption and ongoing cloud migration is propelling demand for tools capable of monitoring and securing increasingly intricate IT setups.

With a strong project pipeline and consistent enterprise engagement, Datadog seems well-equipped to harness the momentum of AI-driven cloud growth, instilling confidence in both investors and organizations in search of advanced security solutions.