Earnings season can be a great time to assess how companies are handling the current business environment and discover new stocks. Let’s have a look at how Akamai (NASDAQ:AKAM) and the rest of the software development stocks fared in Q2.
Software is eating the world, as Marc Andreessen says, and there is virtually no industry left that has been untouched by it. That in turn drives increasing demand for tools that help software developers do their jobs, whether it is monitoring critical cloud infrastructure, integrating audio and video functionality or ensuring smooth streaming of content.
The 11 software development stocks we track reported a a decent Q2; on average, revenues beat analyst consensus estimates by 4.42%, while on average next quarter revenue guidance was 3.96% above consensus. On average the share price was down 0.12% the day after the earnings.
Founded in 1999 by two engineers from MIT, Akamai (NASDAQ:AKAM) provides software for organizations to efficiently deliver web content to their customers.
Akamai reported revenues of $852.8 million, up 7.31% year on year, in line with analyst expectations. It was a weak quarter for the company, with a slow revenue growth.
"Akamai's excellent second quarter financial performance was highlighted by continued strong growth across our security solutions globally," said Dr. Tom Leighton, Akamai's Chief Executive Officer.
Akamai delivered the weakest performance against analyst estimates, slowest revenue growth, and weakest full year guidance update of the whole group. The stock is down 14.8% since the results and currently trades at $102.
Best Q2: Datadog (NASDAQ:DDOG)
Named after a database the founders had to painstakingly look after at their previous company, Datadog (NASDAQ:DDOG) is a software as a service platform that makes it easier to monitor cloud infrastructure and applications.
Datadog reported revenues of $233.5 million, up 66.8% year on year, beating analyst expectations by 9.93%. It was a very strong quarter for the company, with an exceptional revenue growth and a very optimistic guidance for the next quarter.
The stock is up 23.5% since the results and currently trades at $142.
Is now the time to buy Datadog? Access our full analysis of the earnings results here, it's free.
Weakest Q2: Agora (NASDAQ:API)
Founded in 2014 by former engineers at WebEx and based in China, Agora provides a cloud platform that makes it easy for developers to integrate real-time audio and video functionalities in their apps.
Agora reported revenues of $42.3 million, up 24.8% year on year, beating analyst expectations by 2.56%. It was a weak quarter for the company, with a decline in net revenue retention rate and a full year guidance missing analysts' expectations.
The stock is down 7.64% since the results and currently trades at $27.31.
Founded in 1999, Bandwidth (NASDAQ:BAND) provides thousands of customers with a software platform that uses its own global network to provide phone numbers, voice, and text connectivity.
Bandwidth reported revenues of $120.6 million, up 57.1% year on year, beating analyst expectations by 4.19%. It was a decent quarter for the company, with an exceptional revenue growth but a decline in net revenue retention rate.
The stock is down 36.6% since the results and currently trades at $79.
Founded in San Francisco in 2009, Cloudflare is a software as a service platform that helps improve security, reliability and loading times of internet applications and websites.
Cloudflare reported revenues of $152.4 million, up 52.8% year on year, beating analyst expectations by 4.33%. It was a very strong quarter for the company, with an exceptional revenue growth.
The stock is up 20% since the results and currently trades at $145.49.
The author has no position in any of the stocks mentioned