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Software Development Stocks Q1 Teardown: JFrog (NASDAQ:FROG) Vs The Rest


Radek Strnad /
2022/07/12 4:32 am EDT
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Looking back on software development stocks' Q1 earnings, we examine the quarter’s best and worst performers, including 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 decent Q1; on average, revenues beat analyst consensus estimates by 3.49%, while on average next quarter revenue guidance was 1.18% above consensus. Tech stocks have been under pressure since the end of last year, but software development stocks held their ground better than others, with share price down 4.45% 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 $63.6 million, up 41.2% year on year, beating analyst expectations by 4.16%. It was a decent quarter for the company, with an exceptional revenue growth but decelerating growth in large customers.

“JFrog demonstrated a solid start to 2022, as Q1 was yet another strong quarter. We’re excited to see the growing number of customers transitioning to the cloud, securing their software supply chain, and powering their DevOps pipelines with the JFrog Platform,” said Shlomi Ben Haim, JFrog Co-founder and CEO.

JFrog Total Revenue

The stock is up 23.2% since the results and currently trades at $22.76.

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

Best Q1: 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 $87.4 million, up 61.7% year on year, beating analyst expectations by 11.8%. It was a very strong quarter for the company, with an impressive beat of analyst estimates and an exceptional revenue growth.

GitLab Total Revenue

GitLab pulled off the strongest analyst estimates beat among its peers. The stock is up 47% since the results and currently trades at $58.60.

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

Weakest Q1: 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 $634.2 million, down 1.72% year on year, in line with analyst expectations. It was a weak quarter for the company, with a slow revenue growth and an underwhelming revenue guidance for the next quarter.

The stock is down 18.4% since the results and currently trades at $157.86.

Read our full analysis of F5 Networks's results here.

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 $205.7 million, up 19.1% year on year, in line with analyst expectations. It was a mixed quarter for the company, with a significant improvement in gross margin but decelerating growth in large customers.

The company added 35 enterprise customers paying more than $100,000 annually to a total of 1,099. The stock is up 17.8% since the results and currently trades at $56.33.

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

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 $363 million, up 82.8% year on year, beating analyst expectations by 7.93%. It was a very strong quarter for the company, with an exceptional revenue growth.

Datadog delivered the fastest revenue growth and highest full year guidance raise among the peers. The company added 240 enterprise customers paying more than $100,000 annually to a total of 2,250. The stock is down 9.22% since the results and currently trades at $108.10.

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

The author has no position in any of the stocks mentioned