Datadog's earnings beat estimates, but the stock still slumps

Datadog Inc. exceeded expectations for its most recent quarter; however, the shares of the cloud-monitoring company faced some downward pressure in premarket trading on Monday.

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The observability and security firm reported a first-quarter net income of $42.6 million, or 12 cents per share, a significant improvement from a net loss of $24.1 million, or 8 cents per share, recorded in the same period last year.

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On an adjusted basis, Datadog (DDOG) earned 44 cents per share in the latest quarter, surpassing the FactSet consensus of 34 cents.

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Datadog's revenue climbed to $611 million, marking a 27% increase from the previous year, and exceeding analysts' projections of $590 million.

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For the second quarter, Datadog expects revenue in the range of $620 million to $624 million, accompanied by adjusted earnings per share ranging from 34 cents to 36 cents. This outlook contrasts with analysts' expectations of $617 million in revenue and 34 cents in adjusted EPS, as per FactSet.

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The company's shares experienced a decline of approximately 10% in premarket activity on Monday.

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Olivier Pomel, Chief Executive Officer, remarked, "Companies of every industry and size are deploying new technologies to deliver better customer experiences and business outcomes. At Datadog, we're focused on helping our customers observe, secure, and take action on their complex systems, so they can migrate to cloud and modern DevOps with confidence." DevOps pertains to the convergence of development and operations.

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Looking ahead to the full year, Datadog anticipates revenue in the range of $2.59 billion to $2.61 billion, alongside adjusted earnings per share ranging from $1.51 to $1.57. Analysts had projected figures of $2.57 billion in revenue and $1.43 per share in adjusted earnings.

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