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Q1 Earnings Highs And Lows: PagerDuty (NYSE:PD) Vs The Rest Of The Software Development Stocks


Anthony Lee /
2024/06/11 2:47 am EDT

Earnings results often indicate what direction a company will take in the months ahead. With Q1 now behind us, let’s have a look at PagerDuty (NYSE:PD) and its peers.

As legendary VC investor Marc Andreessen says, "Software is eating the world", and it touches virtually every industry. That drives increasing demand for tools helping software developers do their jobs, whether it be monitoring critical cloud infrastructure, integrating audio and video functionality, or ensuring smooth content streaming.

The 11 software development stocks we track reported a slower Q1; on average, revenues beat analyst consensus estimates by 1.7%. while next quarter's revenue guidance was in line with consensus. Stocks--especially those trading at higher multiples--had a strong end of 2023, but 2024 has seen periods of volatility. Mixed signals about inflation have led to uncertainty around rate cuts, and software development stocks have had a rough stretch, with share prices down 7.3% on average since the previous earnings results.

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 $111.2 million, up 7.7% year on year, falling short of analysts' expectations by 0.3%. It was a solid quarter for the company, with accelerating customer growth and a decent beat of analysts' billings estimates.

“PagerDuty delivered a solid first quarter with annual recurring revenue growth stabilizing at 10% for the second consecutive quarter, and non-GAAP operating margin four percentage points above the range,” said Jennifer Tejada, Chairperson and CEO, PagerDuty.

PagerDuty Total Revenue

The stock is up 10.9% since the results and currently trades at $19.9.

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

Best Q1: 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 $611.3 million, up 26.9% year on year, outperforming analysts' expectations by 3.3%. It was a strong quarter for the company, with an impressive beat of analysts' ARR (annual recurring revenue) estimates and accelerating growth in large customers.

Datadog Total Revenue

The stock is down 11.1% since the results and currently trades at $112.87.

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

Weakest Q1: F5 (NASDAQ:FFIV)

Initially started as a hardware appliances company in the late 1990s, F5 (NASDAQ:FFIV) makes software that helps large enterprises ensure their web applications are always available by distributing network traffic and protecting them from cyberattacks.

F5 reported revenues of $681.4 million, down 3.1% year on year, falling short of analysts' expectations by 0.4%. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and a miss of analysts' billings estimates.

F5 had the weakest performance against analyst estimates and slowest revenue growth in the group. The stock is down 8.1% since the results and currently trades at $167.32.

Read our full analysis of F5's results here.

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 $169.2 million, up 33.3% year on year, surpassing analysts' expectations by 1.9%. It was a slower quarter for the company, with a miss of analysts' billings estimates and a decline in its gross margin.

GitLab delivered the fastest revenue growth among its peers. The stock is down 5.9% since the results and currently trades at $44.3.

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

JFrog (NASDAQ:FROG)

Named after the founders' affinity for frogs, JFrog (NASDAQ:FROG) provides a software-as-a-service platform that makes developing and releasing software easier and faster, especially for large teams.

JFrog reported revenues of $100.3 million, up 25.7% year on year, surpassing analysts' expectations by 1.7%. It was a weaker quarter for the company, with a miss of analysts' billings estimates and decelerating growth in large customers.

The company added 25 enterprise customers paying more than $100,000 annually to reach a total of 911. The stock is down 20.1% since the results and currently trades at $32.5.

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

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