FILE PHOTO: A logo for Datadog is seen during the KubeCon + CloudNativeCon Europe hosted by the Cloud Native Computing Foundation (CNCF) in Paris, France, March 20, 2024. REUTERS/Benoit Tessier/File Photo
(Reuters) - Cloud monitoring firm Datadog raised its annual revenue and profit forecasts on Thursday, betting on accelerating demand for its AI-backed cybersecurity products.
Shares of the New York City-based company rose 4.1% before paring gains later in volatile trading.
"Datadog reported very strong results and guided for further impressive growth, some of it driven by AI applications. Shares are up significantly over the last few weeks as investors had very high expectations, which may be leading to some volatility in trading today," said Gil Luria, analyst, D.A. Davidson & Co.
Datadog raised its full-year revenue to be about $2.66 billion, compared to its earlier expectation of between $2.62 billion and $2.63 billion. Analysts were expecting revenue of $2.63 billion, data compiled by LSEG shows.
An increasing number of Datadog customers are deploying their artificial intelligence apps in live production, which is expected to boost usage of the company's products.
AI apps run in the cloud, and a large-scale migration to the cloud is anticipated, boding well for companies such as Datadog, which provide monitoring software for cloud infrastructure.
Datadog now sees adjusted profit between $1.75 and $1.77 per share for the full year, compared to $1.62 to $1.66 per share previously. Analysts were estimating an adjusted profit of $1.65.
Revenue for the quarter ended Sept. 30 was $690 million, compared with an expectation of $664.3 million. It reported adjusted profit of 46 cents per share, above analyst expectations of 40 cents.
(Reporting by Rishi Kant in Bengaluru; Editing by Pooja Desai and Tasim Zahid)
