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 cloud monitoring stocks have fared in Q1, starting with PagerDuty (NYSE:PD).
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. Tech stocks have been hit the hardest as investors start to value profits over growth, but cloud monitoring stocks held their ground better than others, with the share prices up 6.4% since the previous earnings results, on average.
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 demonstrated balanced growth in Q1 with solid revenue growth of 21% and record 16% non-GAAP operating margin—up 1,800 basis points with 20% free cash flow margin,” said Jennifer Tejada, Chairperson and CEO, PagerDuty.
PagerDuty delivered the weakest performance against analyst estimates and weakest full year guidance update of the whole group. The company lost 155 customers and ended up with a total of 15,089. The stock is down 19.7% since the results and currently trades at $22.3.
Is now the time to buy PagerDuty? Access our full analysis of the earnings results 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 delivered the strongest analyst estimates beat and highest full year guidance raise among its peers. The stock is up 10.9% since the results and currently trades at $51.95.
Is now the time to buy Dynatrace? Access our full analysis of the earnings results here, it's free.
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 revenue guidance for the next quarter and the full year missing analysts' expectations.
New Relic had the slowest revenue growth in the group. The stock is down 15.6% since the results and currently trades at $69.69.
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 strong revenue growth and solid free cash flow but decelerating growth in large customers and underwhelming revenue guidance for the next quarter.
Datadog achieved 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 49% since the results and currently trades at $98.76.
The author has no position in any of the stocks mentioned