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Q2 Rundown: New Relic (NYSE:NEWR) Vs Other Cloud Monitoring Stocks


Jack Winthrop /
2022/09/30 3:10 am EDT
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Quarterly earnings results are a good time to check in on a company’s progress, especially compared to other peers in the same sector. Today we are looking at New Relic (NYSE:NEWR), and the best and worst performers in the cloud monitoring group.

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 mixed Q2; on average, revenues beat analyst consensus estimates by 3.2%, while on average next quarter revenue guidance was 0.16% under consensus. Technology stocks have been hit hard on fears of higher interest rates as investors search for near-term cash flows and cloud monitoring stocks have not been spared, with share prices down 11% since the previous earnings results, on average.

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 $216.4 million, up 19.9% year on year, beating analyst expectations by 1.55%. It was a mixed quarter for the company, with a meaningful improvement in gross margin but an underwhelming revenue guidance for the next quarter.

“Q1 was a strong start for New Relic as we beat both top and bottom line expectations,” said New Relic CEO Bill Staples.

New Relic Total Revenue

New Relic delivered the weakest performance against analyst estimates and slowest revenue growth of the whole group. The company added 38 enterprise customers paying more than $100,000 annually to a total of 1,137. The stock is down 9.87% since the results and currently trades at $55.33.

Read our full report on New Relic here, it's free.

Best 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 $74.1 million, up 25.9% year on year, beating analyst expectations by 3.57%. It was a solid quarter for the company, with a decent beat of analyst estimates and revenue guidance for the next quarter above expectations.

Sumo Logic Total Revenue

The stock is down 9.46% since the results and currently trades at $7.65.

Is now the time to buy Sumo Logic? Access our full analysis of the earnings results 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 $267.2 million, up 27.4% year on year, beating analyst expectations by 2.07%. It was a weak quarter for the company, with guidance for both the next quarter and full year missing analysts' expectations.

Dynatrace had the weakest full year guidance update in the group. The stock is down 9.68% since the results and currently trades at $34.60.

Read our full analysis of Dynatrace's results here.

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 $406.1 million, up 73.8% year on year, beating analyst expectations by 6.51%. It was a decent quarter for the company, with exceptional revenue growth but decelerating growth in large customers.

Datadog pulled off the strongest analyst estimates beat and fastest revenue growth among the peers. The company added 170 enterprise customers paying more than $100,000 annually to a total of 2,420. The stock is down 22.1% since the results and currently trades at $87.56.

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

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 $90.2 million, up 33.6% year on year, beating analyst expectations by 2.3%. It was a mixed quarter for the company, with a strong top line growth but a decline in gross margin.

PagerDuty scored the highest full year guidance raise among the peers. The company added 134 customers to a total of 15,174. The stock is down 4.13% since the results and currently trades at $23.18.

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

The author has no position in any of the stocks mentioned