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Q2 Earnings Review: Software Development Stocks Led by HashiCorp (NASDAQ:HCP)


Jack Winthrop /
2022/10/20 3:08 am EDT
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Heading into the new earnings season, we look at the numbers and key takeaways for the software development stocks, including HashiCorp (NASDAQ:HCP) 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 Q2; on average, revenues beat analyst consensus estimates by 3.49%, while on average next quarter revenue guidance was 0.45% above consensus. Increasing interest rates hurt growth companies as investors search for near-term cash flows and software development stocks have not been spared, with share prices down 16.5% since the previous earnings results, on average.

Best Q2: 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 $113.8 million, up 51.5% year on year, beating analyst expectations by 11.2%. It was a stunning quarter for the company, with an impressive beat of analyst estimates and exceptional revenue growth.

“Global enterprises continue to invest in their cloud programs, which are critical to their long term business goals. Our second quarter of fiscal 2023 results reflect the strength of this trend, with revenue growth of 52% year-over-year,” said Dave McJannet, CEO, HashiCorp.

HashiCorp Total Revenue

HashiCorp achieved the strongest analyst estimates beat and highest full year guidance raise of the whole group. The company added 30 enterprise customers paying more than $100,000 annually to a total of 734. The stock is down 4.09% since the results and currently trades at $29.01.

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

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 $101 million, up 73.8% year on year, beating analyst expectations by 6.99%. It was a very strong quarter for the company, with exceptional revenue growth and a solid beat of analyst estimates.

GitLab Total Revenue

The stock is down 5.16% since the results and currently trades at $45.13.

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

Slowest Q2: 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 $267.2 million, up 27.4% year on year, beating analyst expectations by 2.07%. It was a weak quarter for the company, with revenue guidance for both the next quarter and the full year missing analysts' expectations.

Dynatrace had the weakest full year guidance update in the group. The stock is down 13.5% since the results and currently trades at $33.11.

Read our full analysis of Dynatrace's results here.

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 $90.2 million, up 33.6% year on year, beating analyst expectations by 2.3%. It was a mixed quarter for the company, with a strong top line growth but a decline in gross margin.

The company added 134 customers to a total of 15,174. The stock is down 7.07% since the results and currently trades at $22.47.

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

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 3.2% year on year, beating analyst expectations by 1.95%. It was a decent quarter for the company, with accelerating customer growth but declining revenue.

The company added 171 customers to a total of 2,877. The stock is down 32.3% since the results and currently trades at $3.21.

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

The author has no position in any of the stocks mentioned