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Barclays' Raimo Lenschow raised their price target on Datadog (NASDAQ: DDOG) by 2.4% from $125 to $128 on 2025/05/07. The analyst maintained their Strong Buy rating on the stock.

Datadog reported its Q1 2025 earnings.

Hiking their price target, Lenschow attributed the "strong" quarter to:

• AI-Native contributions.
• Better new customer bookings.
• And, large customer expansions.

"Those were just a few pieces of an all-around solid quarter," the analyst continued, conceding that "margins could raise some eyebrows near term," but arguing that "management's guidance and better growth should balance that out."

Earnings Report

For Q1 2025, Datadog reported:

• EPS of $0.46, which beat the Zacks Consensus Estimate of $0.42 and Q1 2024's $0.44.
• Revenue of $761.55M, which beat the Zacks Consensus Estimate by 3% and Q1 2024's $611.25M.

Management guided:

For Q2 2025:

• EPS of $0.40 to $0.42.
• Revenue of $787M to $791M.

For FY 2025:

• EPS of $1.67 to $1.71.
• Revenue of $3.215B to $3.235B.

CEO Olivier Pomel commented: "Datadog executed solidly in the first quarter, with 25% year-over-year revenue growth, $272 million in operating cash flow, and $244 million in free cash flow.

"We are innovating rapidly across the Datadog platform, to help customers observe, secure, and act to solve mission-critical business problems in their modern, cloud environments."