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According to a recent report, the global cloud monitoring market is estimated to grow at 21% CAGR to $9.4 billion by 2030 from $3 billion in 2024. The growth in the industry is attributed to the increasing adoption of DevOps and Site Reliability Engineering (SRE) practices, especially as IT teams are embracing DevOps methodologies to accelerate software development and deployment cycles. Datadog (Nasdaq: DDOG), a leading provider of essential monitoring and security platform for cloud applications, continues to expand its AI capabilities through acquisitions.

Datadog’s Financials

For the first quarter, Datadog’s revenues grew 25% to $762 million, ahead of market estimates of $739.4 million. Non-GAAP earnings per share came in at $0.46, also ahead of the market expectations of $0.42 per share. Customers with ARR of $100,000 or more grew 13% to 3,770.

Looking forward, Datadog projects Q2 revenue of $787-$791 million, compared with market estimates of $789.55 million. Datadog expects to end the year with revenues of $3.215-$3.235 billion, compared with market forecasts of $3.23 billion. Datadog projected Q2 earnings of $0.40-$0.42 per share in line with market estimates and an EPS of $1.67-$1.71 for the year, compared with market forecasts of $1.70.

Datadog’s Acquisitions

Earlier this year, Datadog announced the acquisitions of Eppo and Metaplane to enhance its AI capabilities within experimentation and data observability. In May, it acquired San Francisco-based Eppo for an estimated $220 million.

Founded in 2020 by Che Sharma, Eppo developed an experimentation and feature-management platform that integrates directly with existing data warehouses, enabling product teams to conduct statistically rigorous A/B tests and monitor the impact of product changes on key business metrics. Eppo’s platform was designed to support high-velocity, experiment-first cultures, allowing companies to make data-driven decisions with confidence.

The acquisition allows Datadog to incorporate advanced experimentation capabilities into its existing observability and analytics suite and to provide a single-stop platform for monitoring, feature flagging, and experimentation. Prior to the acquisition, Eppo was privately held and did not disclose financials. According to reports, the company had raised $51.3 million from investors including Innovation Endeavors, Menlo Ventures, and Amplify Partners at undisclosed valuations.

In April this year, Datadog also acquired Boston-based Metaplane, a data observability startup, for an undisclosed sum. Founded in 2020 by Kevin Hu, Peter Casinelli, and Guru Mahendran, Metaplane’s platform offers machine learning–powered monitoring and column-level lineage to detect, resolve, and prevent data quality issues across a company’s data stack.

Unlike traditional tools that only monitor data after it lands in data warehouses, Metaplane provides visibility throughout the entire data lifecycle, from production to consumption. Using anomaly detection AI models trained on historical metadata, Metaplane tries to establish lineages in a data warehouse, and notifies stakeholders of issues so that users can identify any alert as an expected change or otherwise.

The acquisition enhances Datadog’s capabilities in data observability, enabling organizations to build reliable AI systems by unifying observability across applications and data. Prior to the acquisition, Metaplane was privately held and had raised $22.2 million in funding from investors including Khosla Ventures, Y Combinator, and Flybridge Capital Partners.

Datadog’s stock is trading at $135.01 with a market capitalization of $46.6 billion. It touched a 52-week high of $170.08 in December last year, and has recovered from the 52-week low of $81.63 that it had fallen to in April this year.

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