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Q3 Earnings Highs And Lows: DigitalOcean (NYSE:DOCN) Vs The Rest Of The Data Storage Stocks


Jabin Bastian /
2023/01/19 4:09 am EST
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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 DigitalOcean (NYSE:DOCN) and the rest of the data storage stocks fared in Q3.

Data is the lifeblood of the internet and software in general, and the amount of data created is growing at an accelerating pace. Likewise, the importance of storing the data in scalable and efficient formats continues to rise, especially as the diversity of the data and associated use cases expand from analyzing simple, structured data to high-scale processing of unstructured data, images, audio and video.

The 5 data storage stocks we track reported a mixed Q3; on average, revenues beat analyst consensus estimates by 4.38%, while on average next quarter revenue guidance was inline with consensus. Tech stocks have been under pressure as inflation makes their long-dated profits less valuable, but data storage stocks held their ground better than others, with the share prices up 3.65% since the previous earnings results, on average.

DigitalOcean (NYSE:DOCN)

Started by brothers Ben and Moisey Uretsky, DigitalOcean (NYSE: DOCN) provides a simple, low-cost platform that allows developers and small and medium sized businesses to host applications and data in the cloud.

DigitalOcean reported revenues of $152.1 million, up 36.5% year on year, beating analyst expectations by 2.81%. It was a mixed quarter for the company, with a significant improvement in net revenue retention rate but full year guidance missing analysts' expectations.

“I'm proud that we delivered top-line acceleration combined with significant operating margin and free cash flow leverage in the third quarter, despite the difficult operating environment due to global macro challenges,” said Yancey Spruill, CEO of DigitalOcean.

DigitalOcean Total Revenue

The stock is down 5.15% since the results and currently trades at $27.95.

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

Best Q3: MongoDB (NASDAQ:MDB)

Started in 2007 by the team behind Google’s ad platform DoubleClick, MongoDB offers database-as-a-service that helps companies store large volumes of semi-structured data.

MongoDB reported revenues of $333.6 million, up 47% year on year, beating analyst expectations by 9.56%. It was a strong quarter for the company, with very optimistic guidance for the next quarter and an impressive beat of analyst estimates.

MongoDB Total Revenue

MongoDB delivered the strongest analyst estimates beat but had the weakest full year guidance update among its peers. The company added 83 enterprise customers paying more than $100,000 annually to a total of 1,545. The stock is up 37.2% since the results and currently trades at $199.01.

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

Slowest Q3: Commvault Systems (NASDAQ:CVLT)

Originally formed in 1988 as part of Bell Labs, Commvault (NASDAQ: CVLT) provides enterprise software used for data backup and recovery, cloud and infrastructure management, retention and compliance.

Commvault Systems reported revenues of $188 million, up 5.74% year on year, in line with analyst expectations. It was a weaker quarter for the company, with slow revenue growth.

Commvault Systems had the weakest performance against analyst estimates and slowest revenue growth in the group. The company lost 11 enterprise customers paying more than $100,000 annually and ended up with a total of 173. The stock is down 6.76% since the results and currently trades at $56.75.

Read our full analysis of Commvault Systems's results here.

Snowflake (NYSE:SNOW)

Founded in 2013 by three French engineers who spent decades working for Oracle, Snowflake (NYSE:SNOW) provides a data warehouse-as-a-service in the cloud that allows companies to store large amounts of data and analyze it in real time.

Snowflake reported revenues of $557 million, up 66.5% year on year, beating analyst expectations by 3.36%. It was a decent quarter for the company, with exceptional revenue growth but a decline in net revenue retention rate.

Snowflake scored the fastest revenue growth among the peers. The company added 41 enterprise customers paying more than $1m annually to a total of 287. The stock is down 2.21% since the results and currently trades at $139.65.

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

Couchbase (NASDAQ:BASE)

Formed in 2011 with the merger of Membase and CouchOne, Couchbase (NASDAQ:BASE) is a database as a service platform that allows enterprises to store large volumes of semi-structured data.

Couchbase reported revenues of $38.5 million, up 25% year on year, beating analyst expectations by 5.35%. It was a mixed quarter for the company, with solid topline results but underwhelming revenue guidance for the next quarter.

Couchbase delivered the highest full year guidance raise among the peers. The stock is down 4.87% since the results and currently trades at $13.26.

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

The author has no position in any of the stocks mentioned