The end of an earnings season can be a great time to assess how companies are handling the current business environment and discover new stocks. Let’s have a look at how PagerDuty (NYSE:PD) and the rest of the cloud monitoring stocks fared in Q2.
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. Tech stocks have been hit the hardest as investors start to value profits over growth, and cloud monitoring stocks have not been spared, with share prices down 15% since the previous earnings results, on average.
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.
“In the second quarter, we again exceeded our guidance ranges while extending our lead through innovations across PagerDuty's Operations Cloud,” said Jennifer Tejada, Chairperson and CEO at PagerDuty.
PagerDuty pulled off the highest full year guidance raise of the whole group. The company added 134 customers to a total of 15,174. The stock is down 15.9% since the results and currently trades at $20.33.
Is now the time to buy PagerDuty? Access our full analysis of the earnings results 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.
The stock is down 13.7% since the results and currently trades at $7.29.
Is now the time to buy Sumo Logic? Access our full analysis of the earnings results here, it's free.
Slowest Q2: 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 12.1% since the results and currently trades at $33.64.
Read our full analysis of Dynatrace's results here.
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.
New Relic had the weakest performance against analyst estimates and slowest revenue growth among the peers. The company added 38 enterprise customers paying more than $100,000 annually to a total of 1,137. The stock is down 11.4% since the results and currently trades at $54.34.
Read our full, actionable report on New Relic here, it's free.
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 an exceptional revenue growth but decelerating growth in large customers.
Datadog achieved 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% since the results and currently trades at $87.60.
Read our full, actionable report on Datadog here, it's free.
The author has no position in any of the stocks mentioned