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 4 cloud monitoring stocks we track reported a weaker Q1; on average, revenues beat analyst consensus estimates by 1.71%, while on average next quarter revenue guidance was 1.58% under consensus. Technology stocks have been hit hard on fears of higher interest rates as investors search for near-term cash flows, but cloud monitoring stocks held their ground better than others, with the share prices up 4.36% 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 $242.5 million, up 17.9% year on year, in line with analyst expectations. It was a weak quarter for the company, with the revenue guidance provided for the upcoming quarter and the full year both falling short of Consensus expectations.
“We finished the fiscal year with consumption revenue growing in excess of 30% excluding the impact of migrations, with profitability at a new high watermark, and with our innovation leadership recognized broadly. I’m very grateful for such committed customers and all the hard work across the company which made fiscal 2023 a terrific year,” said New Relic CEO Bill Staples.
New Relic delivered the slowest revenue growth of the whole group. The stock is down 20.4% since the results and currently trades at $65.67.
Read our full report on New Relic here, it's free.
Best Q1: 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 $314.5 million, up 24.5% year on year, beating analyst expectations by 3.23%. It was a strong quarter for the company, with revenue guidance for the next quarter and full year beating analysts' expectations.
Dynatrace achieved the strongest analyst estimates beat and highest full year guidance raise among its peers. The stock is up 10.8% since the results and currently trades at $51.9.
Is now the time to buy Dynatrace? Access our full analysis of the earnings results here, it's free.
Weakest Q1: 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 $103.2 million, up 20.9% year on year, in line with analyst expectations. It was a weak quarter for the company, with revenue guidance for the next quarter and the full year missing analysts' expectations.
PagerDuty had the weakest performance against analyst estimates and weakest full year guidance update in the group. The company lost 155 customers and ended up with a total of 15,089. The stock is down 18.4% since the results and currently trades at $22.66.
Read our full analysis of PagerDuty'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 $481.7 million, up 32.7% year on year, beating analyst expectations by 2.72%. It was a mixed quarter for the company, with decelerating growth in large customers and underwhelming revenue guidance for the next quarter.
Datadog scored the fastest revenue growth among the peers. The company added 130 enterprise customers paying more than $100,000 annually to a total of 2,910. The stock is up 45.4% since the results and currently trades at $95.83.
Read our full, actionable report on Datadog here, it's free.
The author has no position in any of the stocks mentioned