Earnings results often give us a good indication of what direction the company will take in the months ahead. With Q1 now behind us, let’s have a look at GitLab (NASDAQ:GTLB) 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 had a rocky start in 2022, but software development stocks held their ground better than others, with share price down 0.58% since earnings, on average.
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.
“We have seen a substantial shift in how enterprises are developing, operating, and securing software by moving to a platform strategy. As a result, our One DevOps Platform is gaining momentum and broader adoption,” said Sid Sijbrandij, GitLab CEO and Co-Founder.
GitLab scored the strongest analyst estimates beat of the whole group. The stock is up 47% since the results and currently trades at $58.60.
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 and a full year guidance beating analysts' expectations.
Datadog scored the fastest revenue growth and highest full year guidance raise among its 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.
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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.
Founded in 2008 by Jeff Lawson, a former engineer at Amazon, Twilio (NYSE:TWLO) is a software as a service platform that makes it really easy for software developers to use text messaging, voice calls and other forms of communication in their apps.
Twilio reported revenues of $875.3 million, up 48.3% year on year, beating analyst expectations by 1.33%. It was a strong quarter for the company, with accelerating customer growth.
The company added 12,000 customers to a total of 268,000. The stock is down 21.5% since the results and currently trades at $92.99.
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 $212.1 million, up 53.6% year on year, beating analyst expectations by 3.16%. It was a very strong quarter for the company, with an exceptional revenue growth and a very optimistic guidance for the next quarter.
The stock is down 33% since the results and currently trades at $52.10.
The author has no position in any of the stocks mentioned