Datadog Stock Surges 24% After Earnings. What's Exciting Wall Street.

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For the fourth quarter, Datadog expects revenue of between $564 million and $568 million, beating analysts’ estimates of $544.9 million.

Datadog stock surged Tuesday after the security software provider surpassed quarterly profit expectations and offered a solid outlook driven by more customers transitioning to the cloud.

The company earned 45 cents a share in the third quarter. Analysts surveyed by FactSet expected Datadog to report 34 cents a share. Revenue of $547.5 million was higher than the $524.7 million predicted. The provider of IT monitoring software had 3,130 customers with annual recurring revenue of $100,000 or more by the end of the quarter, up 20% from the year-ago quarter.“Companies across all industries and sizes are building cloud applications and services to deliver positive business outcomes, including more users, higher revenue growth, improved productivity, and cost savings,” said CEO Olivier Pomel.

Pomel’s positive remarks follow his cautious stance on customer spending in August when he mentioned that “particularly some larger spending customers” were closely examining their expenses. Shares of other software companies rallied after Datadog ‘s upbeat commentary: Cloud computing company Snowflake gained 7.3%, database management program MongoDB was up 6.3%, and search engine analytics provider Elastic was up 4.9%.

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