Looking back on cloud monitoring stocks' Q2 earnings, we examine this quarter’s best and worst performers, including Datadog (NASDAQ:DDOG) and its peers.
Software is eating the world, increasing organizations’ reliance on digital-only solutions. 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 mixed Q2; on average, revenues beat analyst consensus estimates by 3.2%, while on average next quarter revenue guidance was 0.16% under consensus. There has been a stampede out of high valuation technology stocks as raising interest rates encourage investors to value profits over growth again, but cloud monitoring stocks held their ground better than others, with share price down 2.11% since the previous earnings results, on average.
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 $406.1 million, up 73.8% year on year, beating analyst expectations by 6.51%. It was a decent quarter for the company, with an exceptional revenue growth but decelerating growth in large customers.
Datadog pulled off the strongest analyst estimates beat and fastest revenue growth of the whole group. The company added 170 enterprise customers paying more than $100,000 annually to a total of 2,420. The stock is down 16.2% since the results and currently trades at $94.20.
Is now the time to buy Datadog? Access our full analysis of the earnings results here, it's free.
Best Q2: 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 $74.1 million, up 25.9% year on year, beating analyst expectations by 3.57%. It was a strong quarter for the company, with a decent beat of topline estimates and guidance for the next quarter above analysts' expectations.
The stock is up 5.32% since the results and currently trades at $8.90.
Is now the time to buy Sumo Logic? Access our full analysis of the earnings results here, it's free.
Slowest Q2: 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 $267.2 million, up 27.4% year on year, beating analyst expectations by 2.07%. It was a weak quarter for the company, with guidance for both the next quarter and full year missing analysts' expectations.
Dynatrace had the weakest full year guidance update in the group. The stock is up 0.86% since the results and currently trades at $38.64.
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 $216.4 million, up 19.9% year on year, beating analyst expectations by 1.55%. It was a mixed quarter for the company, with a meaningful improvement in gross margin but an underwhelming revenue guidance for the next quarter.
New Relic had the weakest performance against analyst estimates and slowest revenue growth among the peers. The company added 38 enterprise customers paying more than $100,000 annually to a total of 1,137. The stock is down 2.16% since the results and currently trades at $60.06.
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 $90.2 million, up 33.6% year on year, beating analyst expectations by 2.3%. It was a mixed quarter for the company, with a strong top line growth but a decline in gross margin.
PagerDuty scored the highest full year guidance raise among the peers. The company added 134 customers to a total of 15,174. The stock is up 1.61% since the results and currently trades at $24.57.
The author has no position in any of the stocks mentioned