Datadog Inc. reported its first quarter 2025 earnings, surpassing expectations with an adjusted EPS of $0.46, beating the estimate of $0.43, and revenue of $762 million, exceeding the forecast of $741.52 million. The company's revenue grew by 25% year-over-year, and it generated $244 million in free cash flow, marking a 28% increase. Additionally, Datadog reported a GAAP operating loss of $12 million with a GAAP operating margin of -2%, while non-GAAP operating income was $167 million with a non-GAAP operating margin of 22%. The company's GAAP net income per diluted share was $0.07, and the non-GAAP gross margin was 80%, down from 83% year-over-year. Datadog also provided an updated outlook for the second quarter and the full year 2025. For Q2, the company anticipates an EPS range of $0.40 to $0.42, compared to the estimate of $0.40, and revenue between $787 million and $791 million, against the expected $768 million. For the full year, Datadog raised its guidance, projecting an EPS of $1.67 to $1.71 and revenue between $3.22 billion and $3.24 billion, both above previous estimates. The company's customer base expanded, with the number of customers with an annual recurring revenue (ARR) of over $100,000 growing to approximately 3,770, up from 3,340 a year earlier. Datadog's CEO highlighted the solid execution in the quarter, emphasizing the growth in revenue, operating cash flow, and free cash flow. The company's free cash flow margin was 32%. Separately, DigitalOcean Holdings reported its Q1 2025 results, with an adjusted EPS of $0.56, surpassing the estimate of $0.44, and revenue of $211 million, beating the forecast of $208.55 million. The company's revenue increased by 14% year-over-year, driven by strong AI product momentum and new feature launches. DigitalOcean's ARR ended the quarter at $843 million, also up 14% year-over-year, with AI ARR growing over 160% year-over-year. The net dollar retention rate improved to 100% for the first time since Q2 2023. Revenue from customers spending over $100,000 grew 41% year-over-year, now accounting for 23% of total revenue. DigitalOcean's stock was down 3.8% pre-market, while Datadog's stock slipped 0.3% pre-market despite the earnings beat.