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Q3 Earnings Outperformers: Akamai (NASDAQ:AKAM) And The Rest Of The Software Development Stocks


Petr Huřťák /
2023/01/25 4:28 am EST
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The end of an 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 Q3.

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 14 software development stocks we track reported a mixed Q3; on average, revenues beat analyst consensus estimates by 2.83%, while on average next quarter revenue guidance was 0.11% under consensus. Tech stocks have been hit the hardest as investors start to value profits over growth, but software development stocks held their ground better than others, with the share prices up 17.2% since the previous earnings results, on average.

Akamai (NASDAQ:AKAM)

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 $881.8 million, up 2.5% year on year, in line with analyst expectations. It was a weak quarter for the company, with slow revenue growth.

"Akamai delivered another quarter of solid results despite global macroeconomic challenges, including foreign exchange headwinds," said Dr. Tom Leighton, Akamai's chief executive officer.

Akamai Total Revenue

The stock is up 4.54% since the results and currently trades at $87.7.

Read our full report on Akamai here, it's free.

Best Q3: HashiCorp (NASDAQ:HCP)

Initially created as a research project at the University of Washington, HashiCorp (NASDAQ:HCP) provides software that helps companies operate their own applications in a multi-cloud environment.

HashiCorp reported revenues of $125.3 million, up 52.4% year on year, beating analyst expectations by 12.7%. It was a very strong quarter for the company, with an impressive beat of analyst estimates and exceptional revenue growth.

HashiCorp Total Revenue

HashiCorp pulled off the strongest analyst estimates beat and highest full year guidance raise among its peers. The company added 26 enterprise customers paying more than $100,000 annually to a total of 760. The stock is up 8.97% since the results and currently trades at $29.02.

Is now the time to buy HashiCorp? Access our full analysis of the earnings results here, it's free.

Weakest Q3: Agora (NASDAQ:API)

Founded in 2014 by former engineers at WebEx and based in China, Agora (NASDAQ:API) 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 $40.9 million, down 8.99% year on year, missing analyst expectations by 7.83%. It was a weak quarter for the company, with a full year guidance missing analysts' expectations.

Agora had the weakest performance against analyst estimates, declining revenue, and weakest full year guidance update in the group. The company added 110 customers to a total of 2,987. The stock is up 32.1% since the results and currently trades at $4.42.

Read our full analysis of Agora's results here.

Twilio (NYSE:TWLO)

Founded in 2008 by Jeff Lawson, a former engineer at Amazon, Twilio (NYSE:TWLO) is a software as a service platform that makes it really easy for software developers to use text messaging, voice calls and other forms of communication in their apps.

Twilio reported revenues of $983 million, up 32.8% year on year, beating analyst expectations by 1.04%. It was a slower quarter for the company, with underwhelming revenue guidance for the next quarter and decelerating customer growth.

The company added 5,000 customers to a total of 280,000. The stock is down 15% since the results and currently trades at $55.55.

Read our full, actionable report on Twilio here, it's free.

Bandwidth (NASDAQ:BAND)

Started in 1999 by David Morken who was later joined by Henry Kaestner as co-founder in 2001, 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 $148.3 million, up 13.5% year on year, beating analyst expectations by 5.32%. It was a strong quarter for the company, with accelerating customer growth.

The company added 18 customers to a total of 3,380. The stock is up 95.8% since the results and currently trades at $24.13.

Read our full, actionable report on Bandwidth here, it's free.

The author has no position in any of the stocks mentioned