Looking back on cloud monitoring stocks' Q2 earnings, we examine this quarters’ best and worst performers, including Dynatrace (NYSE:DT) and its peers.
With the growing complexity of systems powering their businesses, it is increasingly harder for organizations to monitor the operational status of all their apps. Coupled with the increased reliance on digital-only solutions, monitoring systems are expected to play an important role in the future of the digital economy.
The 5 cloud monitoring stocks we track reported a a decent Q2; on average, revenues beat analyst consensus estimates by 4.83%, while on average next quarter revenue guidance was 3.81% above consensus. The market rewarded the results with the average return the day after earnings coming in at 6.03%.
Founded in Austria in 2005, Dynatrace 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 $209.7 million, up 34.8% year on year, beating analyst expectations by 3.08%. It was a strong quarter for the company, with a full year guidance beating analysts' expectations and a solid top line growth.
“We are pleased with our strong first quarter results, once again exceeding guidance across all our key metrics, led by ARR growth of 37% year-over-year,” said John Van Siclen, Dynatrace’s CEO.
Dynatrace pulled off the highest full year guidance raise of the whole group. The stock is up 14% since the results and currently trades at $71.24.
Best Q2: 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 $233.5 million, up 66.8% year on year, beating analyst expectations by 9.93%. It was a very strong quarter for the company, with an exceptional revenue growth and a very optimistic guidance for the next quarter.
Datadog had the fastest revenue growth from the cloud monitoring segment and also the highest analyst estimate beat. The stock is up 21.3% since the results and currently trades at $139.50.
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Weakest Q2: Sumo Logic (NASDAQ:SUMO)
Founded in 2010, Sumo Logic 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 $58.8 million, up 19% year on year, beating analyst expectations by 3.82%. It was a weaker quarter for the company, with a decent beat of analyst estimates but a decline in gross margin.
The stock is down 20.4% since the results and currently trades at $16.
New Relic (NYSE:NEWR)
With the name being an anagram of its founder, Lew Cirne, New Relic (NYSE:NEWR) makes a monitoring software that collects, scores, and analyses performance data about a client's IT stack.
New Relic reported revenues of $180.4 million, up 11% year on year, beating analyst expectations by 4.25%. It was a decent quarter for the company, with a significant improvement in net revenue retention rate but decelerating growth in large customer.
The company lost 84 enterprise customers paying more than $100,000 annually and ended up with a total of 964. The stock is up 9.97% since the results and currently trades at $74.95.
Founded in 2009, 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 $67.5 million, up 33.1% year on year, beating analyst expectations by 3.08%. It was a decent quarter for the company, with a strong top line growth but decelerating customer growth.
The stock is down 10.5% since the results and currently trades at $39.56.
The author has no position in any of the stocks mentioned