Cloud monitoring firm Datadog raised its annual revenue and profit forecasts on Thursday, after beating second-quarter estimates on rising demand for artificial intelligence-powered cybersecurity services.

Businesses across sectors are spending more on safeguarding their digital assets in the wake of growing online threats and hacking incidents.

An accelerated migration of data and applications by businesses to the cloud have also driven growth for Datadog, which counts Peloton and Samsung Electronics among its more than 3,000 customers.

The company said it launched a range of security products during the quarter, which allow its clients to protect their cloud environments and production applications.

Analysts have said that spending more on research and development than on sales and marketing helped the company to innovate and scale products more rapidly than its competitors.

Shares of the company were up nearly 3% in premarket trading.

Datadog raised its annual revenue forecast to $2.62 billion to $2.63 billion from its earlier expectation of $2.59 billion to $2.61 billion.

It now expects adjusted profit between $1.62 and $1.66 per share, up from $1.51 to $1.57 previously.

It also forecast an adjusted profit of 38 cents to 40 cents per share for the third quarter, compared with estimates of 37 cents.

The company's revenue for the quarter ended June 30 stood at $645 million, exceeding analysts' average estimate of $624.9 million, according to LSEG data.

It reported an adjusted profit of 43 cents per share, above expectations of 37 cents.

Datadog is among the interested parties in the potential acquisition of Google-backed cloud-based software developer GitLab.

  - Reuters