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Q3 Earnings Outperformers: F5 Networks (NASDAQ:FFIV) And The Rest Of The Software Development Stocks


Petr Huřťák /
2023/01/19 4:11 am EST
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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 Q3, starting with F5 Networks (NASDAQ:FFIV).

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 mixed Q3; on average, revenues beat analyst consensus estimates by 2.92%, while on average next quarter revenue guidance was 0.03% under consensus. Increasing interest rates hurt growth companies as investors search for near-term cash flows, but software development stocks held their ground better than others, with the share prices up 9.18% since the previous earnings results, on average.

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 $700 million, up 2.64% year on year, beating analyst expectations by 1.19%. It was a weaker quarter for the company, with slow revenue growth and a decline in gross margin.

“Organizations across the globe have embraced and accelerated digital transformation to improve efficiency and to deliver the extraordinary digital experiences that are significant drivers of their businesses. In a challenging macro environment, these efforts take on new importance,” said François Locoh-Donou, F5’s President and CEO.

F5 Networks Total Revenue

The stock is down 6.37% since the results and currently trades at $143.7.

Read our full report on F5 Networks here, it's free.

Best Q3: HashiCorp (NASDAQ:HCP)

Initially created as a research project at the University of Washington, HashiCorp (NASDAQ:HCP) provides software that helps companies operate their own applications in a multi-cloud environment.

HashiCorp reported revenues of $125.3 million, up 52.4% year on year, beating analyst expectations by 12.7%. It was a very strong quarter for the company, with an impressive beat of analyst estimates and exceptional revenue growth.

HashiCorp Total Revenue

HashiCorp delivered the strongest analyst estimates beat and highest full year guidance raise among its peers. The company added 26 enterprise customers paying more than $100,000 annually to a total of 760. The stock is up 6.45% since the results and currently trades at $28.35.

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

Weakest Q3: 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 $40.9 million, down 8.99% year on year, missing analyst expectations by 7.83%. It was a weak quarter for the company, with a full year guidance missing analysts' expectations.

Agora had the weakest performance against analyst estimates, declining revenue, and weakest full year guidance update in the group. The company added 110 customers to a total of 2,987. The stock is up 25.2% since the results and currently trades at $4.19.

Read our full analysis of Agora's results here.

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 $112.9 million, up 69.1% year on year, beating analyst expectations by 6.5%. It was a very strong quarter for the company, with exceptional revenue growth.

GitLab delivered the fastest revenue growth among the peers. The stock is up 20.8% since the results and currently trades at $46.34.

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

Bandwidth (NASDAQ:BAND)

Started in 1999 by David Morken who was later joined by Henry Kaestner as co-founder in 2001, Bandwidth (NASDAQ:BAND) provides thousands of customers with a software platform that uses its own global network to provide phone numbers, voice, and text connectivity.

Bandwidth reported revenues of $148.3 million, up 13.5% year on year, beating analyst expectations by 5.32%. It was a strong quarter for the company, with accelerating customer growth and revenue guidance for the next quarter above analyst estimates.

The company added 18 customers to a total of 3,380. The stock is up 70% since the results and currently trades at $20.95.

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

The author has no position in any of the stocks mentioned