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Q4 Earnings Outperformers: Cloudflare (NYSE:NET) And The Rest Of The Software Development Stocks


Jabin Bastian /
2022/04/14 7:06 am EDT
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The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s have a look at how the software development stocks have fared in Q4, starting with Cloudflare (NYSE:NET).

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 13 software development stocks we track reported a mixed Q4; on average, revenues beat analyst consensus estimates by 5.08%, while on average next quarter revenue guidance was 1.67% above consensus. The technology sell-off has been putting pressure on stocks since November , but software development stocks held their ground better than others, with share price down 3.31% since earnings, on average.

Cloudflare (NYSE:NET)

Founded by two grad students of Harvard Business School, Cloudflare (NYSE:NET) is a software as a service platform that helps improve security, reliability and loading times of internet applications and websites.

Cloudflare reported revenues of $193.5 million, up 53.7% year on year, beating analyst expectations by 4.72%. It was a very strong quarter for the company, with an exceptional revenue growth and a very optimistic guidance for the next quarter.

“We had a most excellent 2021, capping off the year with fourth quarter revenue growth up 54% year-over-year. The full year represented a 52% year-over-year increase in revenue growth and a 71% year-over-year increase in large customer growth. It was also the fifth straight year we achieved 50 percent, or greater, compounded growth,” said Matthew Prince, co-founder & CEO of Cloudflare.

Cloudflare Total Revenue

The stock is up 4.93% since the results and currently trades at $121.60.

We think Cloudflare is a good business, but is it a buy today? Read our full report here, it's free.

Best Q4: 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 $77.7 million, up 76.2% year on year, beating analyst expectations by 10.6%. It was a very strong quarter for the company, with an impressive beat of analyst estimates and an exceptional revenue growth.

GitLab Total Revenue

GitLab delivered the highest full year guidance raise among its peers. The stock is up 56.9% since the results and currently trades at $51.95.

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

Weakest Q4: 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 $126.1 million, up 11.5% year on year, beating analyst expectations by 6.72%. It was a weak quarter for the company, with revenue guidance for both the next quarter and the full year missing analyst estimates.

Bandwidth had the weakest full year guidance update in the group. The company added 55 customers to a total of 3,228. The stock is down 30.6% since the results and currently trades at $32.19.

Read our full analysis of Bandwidth's results here.

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 $40.3 million, up 21.4% year on year, beating analyst expectations by 6.41%. It was a weaker quarter for the company, with a full year guidance missing analysts' expectations.

The company added 106 customers to a total of 2,670. The stock is down 15.9% since the results and currently trades at $8.41.

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

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 $67 million, up 23.8% year on year, beating analyst expectations by 4.23%. It was a mixed quarter for the company, with a very strong guidance for the next year but an underwhelming revenue guidance for the next quarter.

The stock is up 2.42% since the results and currently trades at $11.

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

The author has no position in any of the stocks mentioned