Wrapping up Q2 earnings, we look at the numbers and key takeaways for the data storage stocks, including Snowflake (NYSE:SNOW) and its peers.
Data is the lifeblood of the internet and software in general, and the amount of data created is growing at an accelerating pace. Likewise, the importance of storing the data in scalable and efficient formats continues to rise, especially as the diversity of the data and associated use cases expand from analyzing simple, structured data to high-scale processing of unstructured data, images, audio and video.
The 5 data storage stocks we track reported a mixed Q2; on average, revenues beat analyst consensus estimates by 2.81%, while on average next quarter revenue guidance was 0.22% under consensus. There has been a stampede out of high valuation technology stocks as raising interest rates encourage investors to value profits over growth again and data storage stocks have not been spared, with share prices down 10.5% since the previous earnings results, on average.
Founded in 2013 by three French engineers who spent decades working for Oracle, Snowflake (NYSE:SNOW) provides a data warehouse-as-a-service in the cloud that allows companies to store large amounts of data and analyze it in real time.
Snowflake reported revenues of $674 million, up 35.5% year on year, beating analyst expectations by 1.77%. It was a decent quarter for the company, with an improvement in its gross margin. We were also happy that its revenue narrowly outperformed Wall Street's estimates, driven by better-than-expected net revenue retention and an increase in Forbes Global 2000 customers.
“During Q2, product revenue grew 37% year-over-year to $640 million. Our non-GAAP adjusted free cash flow was $88 million, representing 50% year-over-year growth,” said Frank Slootman, Chairman and CEO, Snowflake.
The stock is up 3.91% since the results and currently trades at $161.85.Is now the time to buy Snowflake? Read our full report on Snowflake here.
Best Q2: MongoDB (NASDAQ:MDB)
Started in 2007 by the team behind Google’s ad platform DoubleClick, MongoDB offers database-as-a-service that helps companies store large volumes of semi-structured data.
MongoDB reported revenues of $423.8 million, up 39.6% year on year, beating analyst expectations by 8.42%. It was a very strong quarter for the company, with an impressive beat of analysts' revenue estimates and optimistic revenue guidance for the next quarter. Full year guidance was also raised across the board.
MongoDB scored the strongest analyst estimates beat, fastest revenue growth, and highest full year guidance raise among its peers. The company added 94 enterprise customers paying more than $100,000 annually to a total of 1,855. The stock is down 6.43% since the results and currently trades at $356.85.
Is now the time to buy MongoDB? Access our full analysis of the earnings results here, it's free.
Weakest Q2: DigitalOcean (NYSE:DOCN)
Started by brothers Ben and Moisey Uretsky, DigitalOcean (NYSE: DOCN) provides a simple, low-cost platform that allows developers and small and medium sized businesses to host applications and data in the cloud.
DigitalOcean reported revenues of $169.8 million, up 26.8% year on year, inline with analyst expectations. It was a weak quarter for the company, with a deterioration in gross margin and revenue retention rate.
DigitalOcean had the weakest performance against analyst estimates and weakest full year guidance update in the group. The stock is down 48.6% since the results and currently trades at $24.
Formed in 2011 with the merger of Membase and CouchOne, Couchbase (NASDAQ:BASE) is a database as a service platform that allows enterprises to store large volumes of semi-structured data.
Couchbase reported revenues of $43.1 million, up 8.41% year on year, beating analyst expectations by 3.42%. It was a weaker quarter for the company, with underwhelming revenue guidance for the next quarter.
The stock is up 11.4% since the results and currently trades at $18.38.
Commvault Systems (NASDAQ:CVLT)
Originally formed in 1988 as part of Bell Labs, Commvault (NASDAQ: CVLT) provides enterprise software used for data backup and recovery, cloud and infrastructure management, retention and compliance.
Commvault Systems reported revenues of $198.2 million, flat year on year, in line with analyst expectations. It was a decent quarter for the company, with revenue guidance relatively in line for the next quarter.
Commvault Systems had the slowest revenue growth among the peers. The stock is down 12.8% since the results and currently trades at $67.99.
The author has no position in any of the stocks mentioned