As we reflect back on the just completed Q1 software development sector earnings season, we dig into the relative performance of Twilio (NYSE:TWLO) and its peers.
Software is eating the world, as Marc Andreessen says, and there is virtually no industry left that has been untouched by it. That in turn drives increasing demand for tools that help software developers do their jobs, whether it is monitoring critical cloud infrastructure, integrating audio and video functionality or ensuring smooth streaming of content.
The 13 software development stocks we track reported a decent Q1; on average, revenues beat analyst consensus estimates by 3.45%, while on average next quarter revenue guidance was 1.18% above consensus. There has been a stampede out of high valuation technology stocks and while some of the software development stocks have fared somewhat better, they have not been spared, with share price declining 15.7% since earnings, on average.
Twilio (NYSE:TWLO)
Founded in 2008 by Jeff Lawson, a former engineer at Amazon, Twilio (NYSE:TWLO) is a software as a service platform that makes it really easy for software developers to use text messaging, voice calls and other forms of communication in their apps.
Twilio reported revenues of $875.3 million, up 48.3% year on year, beating analyst expectations by 1.33%. It was a strong quarter for the company, with accelerating customer growth and an exceptional revenue growth.
“We carried our momentum into 2022 and delivered another strong quarter to start the year, with first quarter revenue coming in at $875 million, representing 48% year-over-year growth," said Jeff Lawson, Twilio’s co-founder and CEO.
The stock is down 28.2% since the results and currently trades at $85.
Is now the time to buy Twilio? Access our full analysis of the earnings results here, it's free.
Best Q1: 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 $87.4 million, up 61.7% year on year, beating analyst expectations by 11.8%. It was a very strong quarter for the company, with an impressive beat of analyst estimates and an exceptional revenue growth.
GitLab achieved the strongest analyst estimates beat among its peers. The stock is up 7.27% since the results and currently trades at $42.75.
Is now the time to buy GitLab? Access our full analysis of the earnings results here, it's free.
Weakest Q1: F5 Networks (NASDAQ:FFIV)
While the company initially started in the late 90s by selling hardware appliances, these days F5 (NASDAQ:FFIV) is making software that helps large enterprises ensure their web applications are always available, by distributing network traffic and protecting them from cyber attacks.
F5 Networks reported revenues of $634.2 million, down 1.72% year on year, in line with analyst expectations. It was a weak quarter for the company, with a slow revenue growth and an underwhelming revenue guidance for the next quarter.
The stock is down 22.3% since the results and currently trades at $150.38.
Read our full analysis of F5 Networks's results here.
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 $252.5 million, up 28.5% year on year, beating analyst expectations by 2.44%. Despite the solid topline results, it was a weaker quarter for the company, with full-year guidance missing analysts' expectations and underwhelming guidance for the next quarter.
Dynatrace had the weakest full year guidance update among the peers. The stock is up 19.2% since the results and currently trades at $39.11.
Read our full, actionable report on Dynatrace 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 $205.7 million, up 19.1% year on year, in line with analyst expectations. It was a mixed quarter for the company, with a significant improvement in gross margin but decelerating growth in large customers.
The company added 35 enterprise customers paying more than $100,000 annually to a total of 1,099. The stock is down 6.99% since the results and currently trades at $44.44.
Read our full, actionable report on New Relic here, it's free.
The author has no position in any of the stocks mentioned