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Software Development Stocks Q4 In Review: Agora (NASDAQ:API) Vs Peers


Petr Huřťák /
2023/04/17 4:11 am EDT

Earnings results often give us a good indication what direction will the company take in the months ahead. With Q4 now behind us, let’s have a look at Agora (NASDAQ:API) 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 14 software development stocks we track reported a slower Q4; on average, revenues beat analyst consensus estimates by 3.04%, while on average next quarter revenue guidance was 1.28% under consensus. Tech stocks have been under pressure as inflation makes their long-dated profits less valuable, but software development stocks held their ground better than others, with share prices down 0.93% since the previous earnings results, on average.

Weakest Q4: 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 $40.1 million, down 0.66% year on year, missing analyst expectations by 1.12%. It was a weak quarter for the company, with full year revenue guidance missing analysts' expectations and declining net retention rate.

“We made significant adjustments to our organization and strategy to overcome the many challenges in 2022, including regulatory changes in certain market and a turbulent macroeconomic environment,” said Tony Zhao, founder, chairman and CEO of Agora.

Agora Total Revenue

Agora delivered the weakest performance against analyst estimates and slowest revenue growth of the whole group. The company added 79 customers to a total of 3,066. The stock is down 5.74% since the results and currently trades at $3.61.

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

Best Q4: 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 $79 million, up 27.3% year on year, beating analyst expectations by 6.41%. It was a very strong quarter for the company, with a significant improvement in gross margin and a solid beat of analyst estimates.

Sumo Logic Total Revenue

Sumo Logic scored the highest full year guidance raise among its peers. The stock is up 66.8% since the results and currently trades at $12.01.

Sumo Logic has agreed to be sold to private equity firm Francisco Partners for about $1.7 billion.

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

JFrog (NASDAQ:FROG)

With the name chosen due to the founders' fondness for frogs, JFrog (NASDAQ:FROG) provides software as a service platform that makes developing and releasing software easier and faster, especially for large teams.

JFrog reported revenues of $76.5 million, up 29.2% year on year, missing analyst expectations by 0.58%. It was a weak quarter for the company, with revenue guidance for the next quarter and the full year missing analysts' expectations.

The stock is down 13.2% since the results and currently trades at $20.83.

Read our full analysis of JFrog's results here.

Cloudflare (NYSE:NET)

Founded by two grad students of Harvard Business School, Cloudflare (NYSE:NET) is a software as a service platform that helps improve security, reliability and loading times of internet applications and websites.

Cloudflare reported revenues of $274.7 million, up 41.9% year on year, in line with analyst expectations. It was a mixed quarter for the company, with exceptional revenue growth but underwhelming guidance for the next year.

The stock is up 10.4% since the results and currently trades at $64.25.

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

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 $927.8 million, up 2.48% year on year, beating analyst expectations by 2.54%. It was a weaker quarter for the company, with slow revenue growth.

The stock is down 5.89% since the results and currently trades at $82.62.

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

The author has no position in any of the stocks mentioned