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 Elastic (NYSE:ESTC) and the rest of the data infrastructure stocks fared in Q2.
Generating insights from system level data is an increasing priority for most businesses, but to do so requires connecting and analyzing piles of data stored and siloed in separate databases. This is the demand driver for cloud based data infrastructure software providers, who can more readily integrate, distribute and process information vs. legacy on-premise software providers.
The 4 data infrastructure stocks we track reported a mixed Q2; on average, revenues beat analyst consensus estimates by 2.98%, while on average next quarter revenue guidance was 0.52% above consensus. Increasing interest rates hurt growth companies as investors search for near-term cash flows, but data infrastructure stocks held their ground better than others, with the share prices up 1.69% since the previous earnings results, on average.
Started by Shay Banon as a search engine for his wife's growing list of recipes at Le Cordon Bleu cooking school in Paris, Elastic (NYSE:ESTC) helps companies integrate search into their products and monitor their cloud infrastructure.
Elastic reported revenues of $293.8 million, up 17.5% year on year, beating analyst expectations by 3.26%. It was a decent quarter, with revenue and non-GAAP operating profit exceeding expectations. Next quarter's guidance was largely ahead, and the full year outlook was raised as well. On the other hand, its net revenue retention fell.
“We had a strong start to the fiscal year, and delivered better than expected results as customers continued to consolidate vendors and adopt Elastic as their AI-powered data analytics platform of choice for addressing multiple real-time search use cases,” said Ash Kulkarni, CEO, Elastic.
Elastic delivered the weakest full year guidance update of the whole group. The company added 30 enterprise customers paying more than $100,000 annually to a total of 1,190. The stock is up 28% since the results and currently trades at $79.2.Is now the time to buy Elastic? Read our full report on Elastic here.
Best Q2: Confluent (NASDAQ:CFLT)
Started in 2014 by the team of engineers at LinkedIn who originally built it as an internal tool, Confluent (NASDAQ:CFLT) provides infrastructure software for organizations that makes it easy and fast to collect and move large amounts of data between different systems.
Confluent reported revenues of $189.3 million, up 35.8% year on year, beating analyst expectations by 3.75%. It was a decent quarter for the company, with a beat on quarterly revenue as well as RPO (remaining performance obligations, a leading indicator of revenue). Forward guidance was also bullish, with next quarter and the full year non-GAAP operating profit guidance particularly impressive vs. Wall Street expectations.
Confluent delivered the fastest revenue growth and highest full year guidance raise among its peers. The company added 69 enterprise customers paying more than $100,000 annually to a total of 1,144. The stock is up 9.22% since the results and currently trades at $33.88.
Is now the time to buy Confluent? Access our full analysis of the earnings results here, it's free.
Weakest Q2: C3.ai (NYSE:AI)
Founded in 2009 by enterprise software veteran Tom Seibel, C3.ai (NYSE:AI) provides software that makes it easy for organizations to add artificial intelligence technology to their applications.
C3.ai reported revenues of $72.4 million, up 10.8% year on year, beating analyst expectations by 1.07%. It was a mixed quarter for the company, with its full-year revenue guidance coming in higher than Wall Street's estimates. However, the outlook for the full year operating loss is larger.
C3.ai had the weakest performance against analyst estimates in the group. The stock is down 9.79% since the results and currently trades at $28.37.
Part of point-of-sale and ATM company NCR from 1991 to 2007, Teradata (NYSE:TDC) offers a software-as-service platform that helps organizations manage their data across multiple storages and analyze it.
Teradata reported revenues of $462 million, up 7.44% year on year, beating analyst expectations by 3.85%. It was a decent quarter for the company, with revenue and ARR (annual recurring revenue) surpassing Wall Street's expectations. Next quarter's non-GAAP EPS guidance was in line, and the company largely maintained its full year guidance.
Teradata pulled off the strongest analyst estimates beat but had the slowest revenue growth among the peers. The stock is down 20.7% since the results and currently trades at $44.03.
The author has no position in any of the stocks mentioned