Earnings results often give us a good indication what direction will the company 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 12 software development stocks we track reported a weaker Q1; on average, revenues beat analyst consensus estimates by 2.07%, while on average next quarter revenue guidance was 1.78% under consensus. Increasing interest rates hurt growth companies as investors search for near-term cash flows, but software development stocks held their ground better than others, with the share prices up 11.4% since the previous earnings results, on average.
Founded as an open-source project in 2011, GitLab (NASDAQ:GTLB) is a leading software development tools platform.
GitLab reported revenues of $126.9 million, up 45.2% year on year, beating analyst expectations by 7.7%. It was a solid quarter for the company, with an impressive beat of analyst estimates and strong sales guidance for the next quarter.
“With AI revolutionizing how companies develop, secure, and operate software, we believe GitLab is positioned as the leading AI-powered DevSecOps platform,” said Sid Sijbrandij, GitLab CEO and Co-Founder.
GitLab achieved the strongest analyst estimates beat and fastest revenue growth of the whole group. The stock is up 38.4% since the results and currently trades at $48.98.
Is now the time to buy GitLab? Access our full analysis of the earnings results here, it's free.
Best Q1: Dynatrace (NYSE:DT)
Founded in Austria in 2005, Dynatrace (NYSE:DT) 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 $314.5 million, up 24.5% year on year, beating analyst expectations by 3.23%. It was a strong quarter for the company, with revenue guidance for the next quarter and full year beating analysts' expectations.
Dynatrace pulled off the highest full year guidance raise among its peers. The stock is up 7.6% since the results and currently trades at $50.39.
Is now the time to buy Dynatrace? Access our full analysis of the earnings results here, it's free.
Weakest Q1: PagerDuty (NYSE:PD)
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 $103.2 million, up 20.9% year on year, in line with analyst expectations. It was a weak quarter for the company, with revenue guidance for the next quarter and the full year missing analysts' expectations.
PagerDuty had the weakest full year guidance update in the group. The company lost 155 customers and ended up with a total of 15,089. The stock is down 18.2% since the results and currently trades at $22.7.
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 $915.7 million, up 1.33% year on year, in line with analyst expectations. It was a decent quarter for the company, with optimistic revenue guidance for the next quarter.
Akamai had the slowest revenue growth among the peers. The stock is up 13.2% since the results and currently trades at $89.35.
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 $79.8 million, up 25.3% year on year, beating analyst expectations by 1.81%. It was a decent quarter for the company, with accelerating growth in large customers but declining net revenue retention rate. In addition, revenue guidance for the next quarter and full year were in line with Consensus estimates.
The company added 49 enterprise customers paying more than $100,000 annually to a total of 785. The stock is up 54.8% since the results and currently trades at $27.35.
The author has no position in any of the stocks mentioned