Datadog Inc. (NASDAQ:DDOG) stock climbed after it reported its quarterly results on Thursday.

The software-as-a-service (SaaS) platform's fiscal third-quarter revenue increased 28% year-over-year to $885.65 million, beating the analyst consensus estimate of $852.78 million.

Adjusted EPS of 55 cents beat the analyst consensus estimate of 46 cents. 

Also Read: Datadog Faces Analyst Warning As OpenAI Spending Risks Threaten Future Growth

As of September 30, Datadog had 4,060 customers with an ARR of $100,000 or more, an increase of 16% Y/Y. The adjusted gross margin remained flat at 81%, and the adjusted operating margin decreased by 200 bps to 23%. It also had cash and equivalents of $4.1 billion, generating $214 million in free cash flow.

Datadog co-founder and CEO Olivier Pomel noted that Datadog's R&D team continues to accelerate innovation to help customers address challenges in artificial intelligence, launching new AI Observability and Security products, Bits AI Agents for SREs, developers, and security teams, as well as the Datadog MCP Server and its time-series foundation model, TOTO.

Outlook: Datadog expects fourth-quarter revenue of $912 million–$916 million, above the analyst consensus estimate of $887.27 million. It projects an adjusted EPS of $0.54–$0.56, topping the analyst consensus estimate of $0.46.

The company raised its fiscal 2025 revenue outlook to $3.386 billion to $3.390 billion (up from prior outlook of $3.312 billion to $3.322 billion), above the consensus estimate of $3.329 billion. It projects an adjusted EPS of $2.00 and $2.02 (up from previous guidance of $1.80 and $1.83), topping the analyst consensus of $1.84.

Price Action: DDOG stock is up 19.95% at $186.16 as of the last check on Thursday.

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