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Q2 Earnings Roundup: New Relic (NYSE:NEWR) And The Rest Of The Cloud Monitoring Segment


Jabin Bastian /
2021/10/19 8:53 am EDT
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Earnings results often give us a good indication of what direction the company will take in the months ahead. With Q2 now behind us, let’s have a look at New Relic (NYSE:NEWR) and its peers.

Software is eating the world, increasing organizations’ reliance on digital-only solutions. As more workloads and applications move to the cloud, the reliability of the underlying cloud infrastructure becomes ever more critical, and ever more complex. To solve the challenge, companies and their engineering teams have turned to a range of cloud monitoring tools that provide them with visibility to troubleshoot the issues in real time.

The 5 cloud monitoring stocks we track reported a solid 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%.

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 customers.

“We aspire to help millions of developers and engineers build better software, faster and with less toil, by making observability a daily part of a data-driven engineering approach across the entire software lifecycle,” said Bill Staples, CEO, New Relic.

New Relic Total Revenue

New Relic delivered the slowest revenue growth of the whole group. The company lost 84 enterprise customers paying more than $100,000 annually and ended up with a total of 964. The stock is up 7.48% since the results and currently trades at $73.25.

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

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 Total Revenue

Datadog delivered the strongest analyst estimates beat and fastest revenue growth among its peers. The company added 173 enterprise customers paying more than $100,000 annually to a total of 1,610. The stock is up 37.3% since the results and currently trades at $157.80.

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

Weakest Q2: 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 $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.

Sumo Logic had the weakest full year guidance update in the group. The stock is down 14.5% since the results and currently trades at $17.19.

Read our full analysis of Sumo Logic'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 $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.

PagerDuty had the weakest performance against analyst estimates among the peers. The company added 1,200 customers to a total of 18,000. The stock is down 6.98% since the results and currently trades at $41.15.

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

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 $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.

Dynatrace achieved the highest full year guidance raise among the peers. The stock is up 24.3% since the results and currently trades at $77.64.

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

The author has no position in any of the stocks mentioned