Winners And Losers Of Q3: PagerDuty (NYSE:PD) Vs The Rest Of The Software Development Stocks
As the craze of earnings season draws to a close, here's a look back at some of the most exciting (and some less so) results from Q3. Today we are looking at the software development stocks, starting with PagerDuty (NYSE:PD).
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. Investors abandoned cash-burning companies to buy stocks with higher margins of safety, but software development stocks held their ground better than others, with the share prices up 25.8% 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 $108.7 million, up 15.4% year on year, in line with analyst expectations. It was a slower quarter for the company, with decelerating customer growth.
“Results in the third quarter were above our guidance ranges with 15% revenue growth and a non-GAAP operating margin of 14%,” said Jennifer Tejada, Chairperson and CEO, PagerDuty.
The stock is up 20.2% since the results and currently trades at $26.2.
Read our full report on PagerDuty 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 delivered the biggest analyst estimates beat, fastest revenue growth, and highest full-year guidance raise among its peers. The stock is up 17.2% since the results and currently trades at $62.
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 18.9% since the results and currently trades at $176.28.
Read our full analysis of F5 Networks's results here.
Akamai (NASDAQ:AKAM)
Founded in 1999 by two engineers from MIT, Akamai (NASDAQ:AKAM) provides software for organizations to efficiently deliver web content to their customers.
Akamai reported revenues of $965.5 million, up 9.5% year on year, surpassing analyst expectations by 2.3%. It was a good quarter for the company, with a decent beat of analysts' revenue estimates.
The stock is up 7.3% since the results and currently trades at $116.79.
Read our full, actionable report on Akamai here, it's free.
HashiCorp (NASDAQ:HCP)
Initially created as a research project at the University of Washington, HashiCorp (NASDAQ:HCP) provides software that helps companies operate their own applications in a multi-cloud environment.
HashiCorp reported revenues of $146.1 million, up 16.6% year on year, surpassing analyst expectations by 2%. It was a mixed quarter for the company, with a significant improvement in its gross margin but its net revenue retention rate in jeopardy.
The company added 26 enterprise customers paying more than $100,000 annually to reach a total of 877. The stock is down 8.5% since the results and currently trades at $22.8.
Read our full, actionable report on HashiCorp here, it's free.
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The author has no position in any of the stocks mentioned
