The end of an earnings season can be a great time to assess how companies are handling the current business environment and discover new stocks. Let’s have a look at how GitLab (NASDAQ:GTLB) and the rest of the software development stocks fared in Q4.
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 slower Q4; on average, revenues beat analyst consensus estimates by 3.04%, while on average next quarter revenue guidance was 1.28% under consensus. Tech multiples have reverted to the historical mean after reaching all time levels in early 2021, but software development stocks held their ground better than others, with share prices down 0.31% since the previous earnings results, on average.
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 $122.9 million, up 58% year on year, beating analyst expectations by 2.77%. It was a weaker quarter for the company, with revenue guidance for the next quarter and the full year missing analysts' expectations.
“Now more than ever, it is critical for companies to show an immediate return on their software investments,” said Sid Sijbrandij, co-founder and CEO,
GitLab scored the fastest revenue growth but had the weakest full year guidance update of the whole group. The stock is down 23% since the results and currently trades at $34.34.
Is now the time to buy GitLab? Access our full analysis of the earnings results here, it's free.
Best Q4: 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 (NASDAQ:SUMO) 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 $79 million, up 27.3% year on year, beating analyst expectations by 6.41%. It was a very strong quarter for the company, with a significant improvement in gross margin and a solid beat of analyst estimates.
Sumo Logic pulled off the highest full year guidance raise among its peers. The stock is up 65% since the results and currently trades at $11.88.
Sumo has agreed to be sold to private equity firm Francisco Partners for about $1.7 billion.
Is now the time to buy Sumo Logic? Access our full analysis of the earnings results here, it's free.
Weakest Q4: 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 $40.1 million, down 0.66% year on year, missing analyst expectations by 1.12%. It was a weak quarter for the company, with full year guidance missing analysts' expectations and slow revenue growth.
Agora had the weakest performance against analyst estimates and slowest revenue growth in the group. The company added 79 customers to a total of 3,066. The stock is down 3.39% since the results and currently trades at $3.7.
Read our full analysis of Agora's results here.
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 $469.4 million, up 43.9% year on year, beating analyst expectations by 4.44%. It was a weaker quarter for the company, with revenue guidance for the next quarter and the full year missing analysts' expectations.
The company added 180 enterprise customers paying more than $100,000 annually to a total of 2,780. The stock is down 20.5% since the results and currently trades at $70.54.
Read our full, actionable report on Datadog here, it's free.
Bandwidth (NASDAQ:BAND)
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 $157 million, up 24.5% year on year, beating analyst expectations by 6.81%. It was a weaker quarter for the company, with revenue guidance for the next quarter and the full year missing analysts' expectations.
The company added 25 customers to a total of 3,405. The stock is down 37.1% since the results and currently trades at $14.98.
Read our full, actionable report on Bandwidth here, it's free.
The author has no position in any of the stocks mentioned