As software development stocks’ Q1 earnings season wraps, let's dig into this quarter’s best and worst performers, including Akamai (NASDAQ:AKAM) and its peers.
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 13 software development stocks we track reported a decent Q1; on average, revenues beat analyst consensus estimates by 3.49%, while on average next quarter revenue guidance was 1.18% above consensus. Technology stocks have been hit hard on fears of higher interest rates, but software development stocks held their ground better than others, with share price down 8.29% since earnings, on average.
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 $903.6 million, up 7.23% year on year, missing analyst expectations by 0.13%. It was a weak quarter for the company, with a slow revenue growth.
"Despite a challenging global environment and the headwinds associated with the strengthening U.S. dollar, Akamai delivered results in line with our Q1 guidance," said Dr. Tom Leighton, Akamai's Chief Executive Officer. "
Akamai delivered the weakest performance against analyst estimates of the whole group. The stock is down 21.3% since the results and currently trades at $89.50.
Best Q1: GitLab (NASDAQ:GTLB)
Founded as an open-source project in 2011, GitLab (NASDAQ:GTLB) is a leading software development tools platform.
GitLab reported revenues of $87.4 million, up 61.7% year on year, beating analyst expectations by 11.8%. It was a very strong quarter for the company, with an impressive beat of analyst estimates and exceptional revenue growth.
GitLab pulled off the strongest analyst estimates beat among its peers. The stock is up 35.5% since the results and currently trades at $54.
Is now the time to buy GitLab? Access our full analysis of the earnings results here, it's free.
Weakest Q1: F5 Networks (NASDAQ:FFIV)
While the company initially started in the late 90s by selling hardware appliances, these days F5 (NASDAQ:FFIV) is making software that helps large enterprises ensure their web applications are always available, by distributing network traffic and protecting them from cyber attacks.
F5 Networks reported revenues of $634.2 million, down 1.72% year on year, in line with analyst expectations. It was a weak quarter for the company, with a slow revenue growth and an underwhelming revenue guidance for the next quarter.
The stock is down 23.6% since the results and currently trades at $147.89.
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 $363 million, up 82.8% year on year, beating analyst expectations by 7.93%. It was a very strong quarter for the company, with an exceptional revenue growth.
Datadog scored the fastest revenue growth and highest full year guidance raise among the peers. The company added 240 enterprise customers paying more than $100,000 annually to a total of 2,250. The stock is down 18.9% since the results and currently trades at $96.50.
Started by three former Amazon engineers, PagerDuty (NYSE:PD) is a software as a service platform that helps companies respond to IT incidents fast and make sure that any downtime is minimized.
PagerDuty reported revenues of $85.3 million, up 34.2% year on year, beating analyst expectations by 2.95%. It was a mixed quarter for the company, with a strong top line growth but decelerating customer growth.
The company added 175 customers to a total of 15,040. The stock is down 5.3% since the results and currently trades at $26.01.
The author has no position in any of the stocks mentioned