Winners And Losers Of Q2: Datadog (NASDAQ:DDOG) Vs The Rest Of The Cloud Monitoring Pack
Jabin Bastian 2021/09/22 6:56 am EDT
As Q2 earnings season comes to a close, it’s time to take stock of this quarters’ best and worst performers amongst the cloud monitoring stocks, including Datadog (NASDAQ:DDOG) and its peers.
As more workloads and applications move to the cloud, the reliability of the underlying cloud infrastructure becomes ever more critical, and ever more complex. To solve the challenge, companies and their engineering teams have turned to a range of cloud monitoring tools that provide them with visibility to troubleshoot the issues in real time.
The 5 cloud monitoring stocks we track reported a solid Q2; on average, revenues beat analyst consensus estimates by 4.83%, while on average next quarter revenue guidance was 3.81% above consensus. The market rewarded the results with the average return the day after earnings coming in at 6.03%.
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.
"We had a strong second quarter, with revenue growth accelerating to 67% year-over-year and 18% quarter-over-quarter. We saw broad-based strength across customer segments and products," said Olivier Pomel, co-founder and CEO of Datadog.
Datadog pulled off the fastest growth in large customers, strongest analyst estimates beat, and fastest revenue growth of the whole group. The company added 173 enterprise customers paying more than $100,000 annually to a total of 1,610. The stock is up 14.8% since the results and currently trades at $145.60.
Read why we think that Datadog is one of the best cloud monitoring stocks, our full report is free.
New Relic (NYSE:NEWR)
With the name being an anagram of its founder, Lew Cirne, New Relic (NYSE:NEWR) makes a monitoring software that collects, scores, and analyses performance data about a client's IT stack.
New Relic reported revenues of $180.4 million, up 11% year on year, beating analyst expectations by 4.25%. It was a strong quarter for the company, with a significant improvement in net revenue retention rate but the business reported a drop in the number of large customers due to a methodology change.
New Relic had the slowest growth in large customers and slowest revenue growth among its peers. The company lost 84 enterprise customers paying more than $100,000 annually and ended up with a total of 964. The stock is up 15.7% since the results and currently trades at $75.57.
Is now the time to buy New Relic? Access our full analysis of the earnings results here, it's free.
Weakest Q2: Sumo Logic (NASDAQ:SUMO)
Founded in 2010, Sumo Logic 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 $58.8 million, up 19% year on year, beating analyst expectations by 3.82%. It was a weaker quarter for the company, with a decent beat of analyst estimates but a decline in gross margin.
The stock is down 9.49% since the results and currently trades at $17.19.
Read our full analysis of Sumo Logic's results here.
Dynatrace (NYSE:DT)
Founded in Austria in 2005, Dynatrace 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 $209.7 million, up 34.8% year on year, beating analyst expectations by 3.08%. It was a strong quarter for the company, with a full year guidance beating analysts' expectations.
The stock is up 2.01% since the results and currently trades at $71.85.
Read our full analysis of Dynatrace's results here.
PagerDuty (NYSE:PD)
Founded in 2009, 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 $67.5 million, up 33.1% year on year, beating analyst expectations by 3.08%. It was a decent quarter for the company, with a strong top line growth but decelerating customer growth.
PagerDuty had the weakest performance against analyst estimates within the sector. The stock is up 7.07% since the results and currently trades at $46.50.
Read our full analysis of PagerDuty's results here.
The author has no position in any of the stocks mentioned