Cloud monitoring provider Datadog Inc. today posted fiscal first-quarter financial results that exceeded analysts’ revenue and profit expectations.

The company also announced that it’s acquiring Spain-based cybersecurity startup Hdiv Security SL. The financial terms of the deal were not disclosed. 

Nasdaq-listed Datadog provides a platform that companies use to monitor their infrastructure technology environments, and in particular cloud environments, for technical issues. Datadog counts major brands such as Samsung Electronics Co. Ltd. and Amazon.com Inc.’s Whole Foods unit among its customers.

Datadog’s revenue jumped 83% year-over-year in the first quarter, to $363 million, well above the $339 million that analysts polled by FactSet had expected. One contributor to this rapid revenue growth was increased demand from large customers.  The number of organizations that spend $100,000 or more annually on Datadog’s platform was about 2,250 in the first quarter, up from 1,406 a year earlier.

Analysts polled by FactSet were expecting Datadog to post earnings of 11 cents per share for the first quarter. The company delivered 24 cents per share, or more than double the consensus estimate, by generating an adjusted operating income of $83.7 million. Datadog’s guidance for the next quarter, which forecasts earnings of 13 to 15 cents per share on between $376 million and $380 million in sales, also topped expectations.

“We are pleased with our strong first-quarter results, with 83% year-over-year revenue growth and strong profitability,” said Datadog co-founder and Chief Executive Officer Olivier Pomel. “We continue to see customers of all sizes and in all industries progressing along their digital transformation and cloud migration journeys.”

A key component of the value proposition with which Datadog has been winning over customers is its platform’s extensive feature set. Often, information technology monitoring tools focus on finding issues in one specific type of technology asset, such as applications. Datadog’s platform can monitor many kinds of technology assets, including servers, the corporate network, a company’s applications and even the databases in which those applications store their information.

Cybersecurity is emerging as another key focus for the company. In the first quarter, Datadog introduced a tool called Application Security Monitoring that can detect cyberattacks against a company’s workloads. It also helps administrators find and fix application vulnerabilities.

The newly announced acquisition of Hdiv Security will advance Datadog’s cybersecurity product roadmap. The startup, which has raised about $2 million in funding, offers a platform that can automatically identify code vulnerabilities in applications. It’s also capable of detecting other types of cybersecurity risks. 

“Combining security and observability provides Datadog customers unique insights into sensitive services that are vulnerable or under attack,” said Pierre Betouin, vice president of product management at Datadog. “Adding Hdiv Security’s capabilities to Datadog’s Cloud Security Platform will deepen security visibility across the entire software life cycle to help our customers develop more secure and resilient applications.”

In the full 2022 fiscal year, Datadog expects to generate revenues of $1.6 billion to $1.62 billion. The company is forecasting an adjusted operating income of between $240 million and $260 million, which it anticipates will amount to earnings per share in the range of 70 to 77 cents.  

Image: Datadog