Datadog's (DDOG) 2025 revenue outlook looks conservative, demonstrating the company's consistent approach to providing guidance at the start of the year, RBC Capital Markets said Friday in a report.

"We weren't surprised with the initial CY/25 revenue guide as it does follow a similar pattern of conservatism," and there are prospects for upward revisions, the report said.

This year, the company is "strategically" investing in sales after accelerating hiring of sales representatives throughout H2 2024, while continuing to ramp up sales capacity expansion, RBC said.

Revenue growth this year might be as much as 23% to 24%, faster than the 18.7% midpoint of guidance, the report said.

RBC reiterated its outperform rating on Datadog's stock and kept its $170 price target.

Datadog shares fell 3.4% in recent Friday trading.

Price: 131.32, Change: -4.57, Percent Change: -3.36