Feb 10 (Reuters) – Datadog beat Wall Street estimates for fourth-quarter results on Tuesday, as rising adoption of artificial intelligence fueled stronger demand for its cloud security products, sending its shares up more than 14%.
The rise of generative AI has driven greater data volume and complexity in corporate IT systems, increasing demand for application and infrastructure monitoring tools offered by firms such as Datadog.
“During 2025, we delivered over 400 new features and capabilities to help our customers as they migrate to the cloud and begin to deploy to production with next-gen AI,” CEO Olivier Pomel said.
New York City-headquartered Datadog provides a cloud-based monitoring and analytics platform that can help companies see how their software and servers are performing in one place.
Nearly half of its customers use four or more of its products, the company said, indicating broader adoption of its platform and steady expansion of spending among existing clients.
The company’s stock rose on Tuesday following an extended software selloff last week, triggered by AI-related uncertainty.
Its fourth-quarter revenue grew 29% to $953.2 million from a year ago, beating estimates of $916.6 million, according to data compiled by LSEG.
Adjusted profit came in at 59 cents per share, topping expectations of 55 cents.
Datadog forecast first-quarter revenue between $951 million and $961 million, compared with estimates of $935.4 million.
The company expects annual revenue between $4.06 billion and $4.10 billion, below estimates of $4.11 billion.
It also projected full-year adjusted profit of $2.08 to $2.16 per share, lower than estimates of $2.37.
(Reporting by Anhata Rooprai in Bengaluru, additional reporting by Arnav Mishra; Editing by Shreya Biswas)