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A Look Back at Software Development Stocks' Q1 Earnings: Agora (NASDAQ:API) Vs The Rest Of The Pack


Jabin Bastian /
2022/07/14 4:22 am EDT
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The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s have a look at how the software development stocks have fared in Q1, starting with Agora (NASDAQ:API).

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. The technology sell-off has been putting pressure on stocks since November, but software development stocks held their ground better than others, with share price down 9.08% since earnings, on average.

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 $38.5 million, down 4.08% year on year, beating analyst expectations by 4.27%. It was a weak quarter for the company, with a slow revenue growth and a decline in net revenue retention rate.

“We delivered robust results in the first quarter as we navigated through a complex and fast-evolving market environment. Strong revenue growth momentum continued in markets such as Middle East, Southeast Asia and Europe as developers increasingly choose our platform to create immersive real-time engagement experiences,” said Tony Zhao, founder, chairman and CEO of Agora.

Agora Total Revenue

Agora delivered the slowest revenue growth of the whole group. The company added 36 customers to a total of 2,706. The stock is down 16.7% since the results and currently trades at $5.60.

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

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 an exceptional revenue growth.

GitLab Total Revenue

GitLab achieved 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.

Read our full analysis of F5 Networks's results here.

Dynatrace (NYSE:DT)

Founded in Austria in 2005, Dynatrace (NYSE:DT) provides companies with software that allows them to monitor the performance of their full technology stack, from software applications to the infrastructure they run on.

Dynatrace reported revenues of $252.5 million, up 28.5% year on year, beating analyst expectations by 2.44%. Despite the solid topline results, it was a weaker quarter for the company, with full-year guidance missing analysts' expectations and underwhelming guidance for the next quarter.

Dynatrace had the weakest full year guidance update among the peers. The stock is up 12.3% since the results and currently trades at $36.84.

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

Sumo Logic (NASDAQ:SUMO)

Founded in 2010 by Christian Beegden who went from driving a cab in Germany to landing an internship at Amazon, Sumo Logic (NASDAQ:SUMO) is software as a service data analytics platform that helps companies get insight into what is happening in their servers and applications.

Sumo Logic reported revenues of $67.8 million, up 25.1% year on year, beating analyst expectations by 2.67%. It was a mixed quarter for the company, with a decent beat of analyst estimates but a decline in gross margin.

The stock is down 4.54% since the results and currently trades at $7.35.

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

The author has no position in any of the stocks mentioned