2204

Reflecting On Software Development Stocks’ Q2 Earnings: JFrog (NASDAQ:FROG)


Jabin Bastian /
2021/10/13 6:26 am EDT
Add to Watchlist

Earnings results often give us a good indication what direction will the company will take in the months ahead. With Q2 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 11 software development stocks we track reported a a decent Q2; on average, revenues beat analyst consensus estimates by 4.42%, while on average next quarter revenue guidance was 3.96% above consensus. On average the share price was down 0.12% the day after the earnings.

JFrog (NASDAQ:FROG)

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

JFrog reported revenues of $48.6 million, up 33.5% year on year, in line with analyst expectations. It was a weaker quarter for the company, with a strong top line growth but decelerating growth in large customer.

“JFrog again reported a strong quarter across the business - including revenue growth, gross margin, and record cash flow - while delivering technical innovations around security, binary distribution and more,” said Shlomi Ben Haim, JFrog’s Co-Founder and CEO.

JFrog Total Revenue

The stock is down 28.6% since the results and currently trades at $32.82.

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

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.

Datadog Total Revenue

The stock is up 27.7% since the results and currently trades at $146.82.

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

Weakest Q2: Agora (NASDAQ:API)

Founded in 2014 by former engineers at WebEx and based in China, Agora 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 $42.3 million, up 24.8% year on year, beating analyst expectations by 2.56%. It was a weak quarter for the company, with a decline in net revenue retention rate and a full year guidance missing analysts' expectations.

The stock is down 10.3% since the results and currently trades at $26.52.

Read our full analysis of Agora'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.

Dynatrace pulled off the highest full year guidance raise among the peers. The stock is up 18.4% since the results and currently trades at $73.99.

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

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 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 decline in gross margin.

The stock is down 18.8% since the results and currently trades at $16.33.

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

The author has no position in any of the stocks mentioned