Datadog Inc (NASDAQ:DDOG) stock fell 4.04% (As on November 7, 11:22:09 AM UTC-4, Source: Google Finance) after the company reported third quarter results that exceeded analyst expectations, as the cloud monitoring company delivered strong revenue growth and raised its outlook for the remainder of the year. The company reported continued growth in its customer base, with approximately 4,060 customers generating annual recurring revenue of $100,000 or more, up 16% from 3,490 in the same period last year. Datadog also reached a milestone of over 1,000 integrations on its unified platform. Operating cash flow for the quarter was $251 million, with free cash flow of $214 million. The company maintained a strong balance sheet with $4.1 billion in cash, cash equivalents, and marketable securities as of September 30, 2025.

Moreover, one of the main contributors to the software maker’s growth in the third quarter was its suite of digital experience tools. Those tools enable developers to find usability issues in an application by collecting data on how users interact with it. According to Datadog, its digital experience suite’s annual recurring revenue topped $300 million in the third quarter. The company’s cybersecurity products also factored into its strong quarterly performance. Datadog helps developers find vulnerabilities in application code, cloud configuration settings and user accounts. In percentage terms, its cybersecurity products’ year-over-year revenue growth percentage accelerated to mid-50s during the third quarter from mid-40s in the three months ended June 30. Datadog maintains its revenue growth partly by regularly launching new products. The company’s current software lineup comprises about two dozen tools. One of the most recent additions, LLM Observability, became generally available in June. It enables developers to monitor their large language models’ output quality, latency and error rates.

DDOG in the third quarter of FY25 has reported the adjusted earnings per share of 55 cents, beating the analysts’ estimates for the adjusted earnings per share of 46 cents. The company had reported the adjusted revenue growth of 28 percent to $885.7 million in the third quarter of FY25, beating the analysts’ estimates for revenue of $8523 million. Datadog’s non-GAAP operating income was $207 million for the quarter, representing a non-GAAP operating margin of 23%.

For Q4, the company expects revenue between $912 million and $916 million, above the consensus of $886.4 million, and adjusted EPS of $0.54-$0.56, higher than analysts’ expectations of $0.45. Full-year revenue is projected at $3.386-$3.390 billion and adjusted EPS of $2.00-$2.02, both exceeding consensus estimates.