(Reuters) -Datadog on Tuesday topped estimates for third-quarter results and raised its forecast for annual adjusted profit and revenue, driven by demand from customers seeking better security solutions due to increasing cybersecurity threats.
Shares of the software solutions provider soared 29.9% and were on track for the biggest one-day percentage gain since their listing.
With the rising number of security breaches hitting major companies like MGM Resorts and Clorox, businesses and governments are turning to software and cybersecurity solutions providers like Datadog.
The Delaware, New-York-based company said it expects annual adjusted profit between $1.52 and $1.54 per share, up from its prior outlook of $1.30 and $1.34. Analysts were expecting $1.33 per share, according to LSEG data.
It also raised its full-year revenue forecast to the range of $2.10 billion to $2.11 billion, from its prior outlook of $2.05 billion to $2.06 billion.
Analysts expect Datadog to benefit from opportunities around cyber security and artificial intelligence with higher demand for development operations software.
The company's revenue for the third quarter stood at $548 million, beating estimates of $524.1 million.
Quarterly adjusted profit of 45 cents per share also topped expectations.
Earlier in October, internet companies Google, Amazon and Cloudflare had flagged the internet's largest-known denial of service attack that could easily cause widespread disruption. The firms had urged businesses to update their web servers to ensure that they do not remain vulnerable.
Datadog's total number of new and existing customers rose 20% to 3,130, with an annual recurring revenue of $100,000 or more as of Sept. 30.
(Reporting by Yamini Kalia in Bengaluru; Editing by Devika Syamnath and Shweta Agarwal)