2204

A Look Back at Software Development Stocks' Q3 Earnings: JFrog (NASDAQ:FROG) Vs The Rest Of The Pack


Adam Hejl /
2022/01/19 6:02 am EST
Add to Watchlist

Earnings results often give us a good indication what direction the company will take in the months ahead. With Q3 now behind us, let’s have a look at JFrog (NASDAQ:FROG) 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 13 software development stocks we track reported a strong Q3; on average, revenues beat analyst consensus estimates by 5.41%, while on average next quarter revenue guidance was 3.29% above consensus. Technology stocks have been hit hard on fears of higher interest rates and while some of the software development stocks have fared somewhat better, they have not been spared, with share price declining 18.2% since earnings, on average.

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 $53.7 million, up 38.1% year on year, beating analyst expectations by 2.24%. It was a solid quarter for the company, with accelerating growth in large customers and an exceptional revenue growth.

“JFrog’s strong performance in Q3 across all metrics demonstrated the company’s commitment to both new business and expansion of existing customers,” said Shlomi Ben Haim, CEO and Co-Founder of JFrog.

JFrog Total Revenue

The stock is down 24.6% since the results and currently trades at $26.72.

Read why we think that JFrog is one of the best software development stocks, our full report is free.

Best Q3: 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 $66.8 million, up 51.3% year on year, beating analyst expectations by 12.8%. It was a strong quarter for the company, with an impressive beat of analyst estimates and a very optimistic guidance for the next quarter.

GitLab Total Revenue

The stock is down 28.4% since the results and currently trades at $64.

Slowest Q3: 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 $860.3 million, up 8.51% year on year, in line with analyst expectations. Akamai had the weakest performance against analyst estimates and slowest revenue growth in the group. The stock is up 6.12% since the results and currently trades at $111.57.

Read our full analysis of Akamai's results here.

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 $270.4 million, up 74.8% year on year, beating analyst expectations by 9.14%. It was an impressive quarter for the company, with a very optimistic guidance for the next quarter.

Datadog scored the fastest revenue growth among the peers. The company added 190 enterprise customers paying more than $100,000 annually to a total of 1,800. The stock is down 17.1% since the results and currently trades at $138.30.

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

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 $172.3 million, up 50.9% year on year, beating analyst expectations by 4.04%. It was a very strong quarter for the company, with an exceptional revenue growth.

The high-flying stock is down 50.1% since the results and currently trades at $100.29.

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

The author has no position in any of the stocks mentioned