Datadog (NASDAQ:DDOG) delivered strong fourth-quarter results, surpassing analyst expectations, but shares tumbled over 9% intra-day today after the company issued a disappointing revenue outlook for 2025.

For Q4, the cloud monitoring and security platform provider posted adjusted earnings per share of $0.49, beating analyst estimates of $0.43. Revenue rose 25% year-over-year to $737.7 million, exceeding the $714.2 million consensus forecast.

Despite the strong quarter, Datadog’s guidance fell short. The company expects Q1 2025 revenue between $737 million and $741 million, slightly below the $741.7 million analyst consensus. For the full year, Datadog projects revenue between $3.175 billion and $3.195 billion, missing Wall Street’s $3.24 billion estimate.

While investors reacted negatively to the outlook, Datadog highlighted solid business momentum. The company ended 2024 with 462 customers generating $1 million or more in annual recurring revenue (ARR), a 17% increase year-over-year. Additionally, customers with ARR of $100,000 or more grew 13% to approximately 3,610.

Although Datadog continues to expand its customer base and generate strong cash flow, the softer-than-expected revenue guidance has raised concerns about its near-term growth trajectory, leading to a sharp stock decline.