Q3 Earnings Highs And Lows: Cloudflare (NYSE:NET) Vs The Rest Of The Software Development Stocks
Wrapping up Q3 earnings, we look at the numbers and key takeaways for the software development stocks, including Cloudflare (NYSE:NET) 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 mixed Q3; on average, revenues beat analyst consensus estimates by 2.5% while next quarter's revenue guidance was 0.6% above consensus. Valuation multiples for growth stocks have reverted to their historical means after reaching highs in early 2021, but software development stocks held their ground better than others, with the share prices up 22% on average since the previous earnings results.
Cloudflare (NYSE:NET)
Founded by two grad students of Harvard Business School, Cloudflare (NYSE:NET) is a software as a service platform that helps improve security, reliability and loading times of internet applications and websites.
Cloudflare reported revenues of $335.6 million, up 32.2% year on year, topping analyst expectations by 1.5%. It was a weaker quarter for the company, with underwhelming revenue guidance for the next quarter.
“We delivered another strong quarter, growing revenue by 32% year-over-year to $335.6 million and delivering our fifth consecutive quarter of record operating profitability,” said Matthew Prince, co-founder & CEO of Cloudflare.
The stock is up 38.9% since the results and currently trades at $78.61.
Is now the time to buy Cloudflare? Access our full analysis of the earnings results here, it's free.
Best Q3: 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 $149.7 million, up 32.5% year on year, outperforming analyst expectations by 6.1%. It was an impressive quarter for the company, with optimistic revenue guidance for the next quarter and a solid beat of analysts' revenue estimates.
GitLab scored the biggest analyst estimates beat, fastest revenue growth, and highest full-year guidance raise among its peers. The stock is up 12.3% since the results and currently trades at $59.37.
Is now the time to buy GitLab? Access our full analysis of the earnings results here, it's free.
Slowest Q3: F5 Networks (NASDAQ:FFIV)
Initially started as a hardware appliances company in the late 1990s, F5 Networks (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 Networks reported revenues of $707 million, flat year on year, in line with analyst expectations. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter.
F5 Networks had the weakest performance against analyst estimates and slowest revenue growth in the group. The stock is up 16.2% since the results and currently trades at $172.26.
Read our full analysis of F5 Networks's results here.
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 $88.64 million, up 23.1% year on year, surpassing analyst expectations by 1.2%. It was a decent quarter for the company, with accelerating growth in large customers but its net revenue retention rate in jeopardy.
The company added 35 enterprise customers paying more than $100,000 annually to reach a total of 848. The stock is up 41.7% since the results and currently trades at $31.9.
Read our full, actionable report on JFrog 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 $547.5 million, up 25.4% year on year, surpassing analyst expectations by 4.5%. It was a very strong quarter for the company, with accelerating growth in large customers and optimistic revenue guidance for the next quarter.
The company added 140 enterprise customers paying more than $100,000 annually to reach a total of 3,130. The stock is up 49.7% since the results and currently trades at $119.17.
Read our full, actionable report on Datadog here, it's free.
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The author has no position in any of the stocks mentioned
