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.

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.

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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