As Q3 earnings season comes to a close, it’s time to take stock of this quarter's best and worst performers amongst the software development stocks, 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 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 0.04% under consensus. Tech stocks have been hit the hardest as investors start to value profits over growth, but software development stocks held their ground better than others, with the share prices up 10.5% since the previous earnings results, on average.
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 $71.9 million, up 34% year on year, beating analyst expectations by 1.88%. It was a mixed quarter for the company, with strong top line growth but a decline in net revenue retention rate.
“Our third quarter results exceeded the high-end of guidance across all metrics, as cloud revenues grew 60%, driven with our cloud marketplace partners and higher levels of customer usage,” said Shlomi Ben Haim, JFrog Co-founder and CEO.
The stock is down 9.78% since the results and currently trades at $20.74.
Is now the time to buy JFrog? Access our full analysis of the earnings results 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 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 8.97% since the results and currently trades at $29.02.
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 full year guidance missing analysts' expectations.
Agora had the weakest performance against analyst estimates, and weakest full year guidance update in the group. The company added 110 customers to a total of 2,987. The stock is up 33.3% since the results and currently trades at $4.46.
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 analysts' estimates.
The company added 18 customers to a total of 3,380. The stock is up 92.7% since the results and currently trades at $23.75.
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 $94.2 million, up 31.2% year on year, beating analyst expectations by 1.85%. It was a mixed quarter for the company, with strong top line growth but decelerating customer growth.
The company added 91 customers to a total of 15,265. The stock is up 20.9% since the results and currently trades at $27.29.
The author has no position in any of the stocks mentioned