Looking back on software development stocks' Q1 earnings, we examine this quarter's best and worst performers, including Dynatrace (NYSE:DT) 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 slower Q1; on average, revenues beat analyst consensus estimates by 1.7%. while next quarter's revenue guidance was in line with consensus. Valuation multiples for many growth stocks have not yet reverted to their early 2021 highs, but the market was optimistic at the end of 2023 due to cooling inflation. The start of 2024 has been a different story as mixed signals have led to market volatility, and while some of the software development stocks have fared somewhat better than others, they collectively declined, with share prices falling 2.5% on average since the previous earnings results.
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 $380.8 million, up 21.1% year on year, exceeding analysts' expectations by 1.4%. Overall, it was a mixed quarter for the company with an impressive beat of analysts' billings estimates but management forecasting growth to slow.
“Dynatrace delivered a strong finish to fiscal 2024. Our fourth quarter results exceeded guidance across all key operating metrics, fueled in part by a record number of 7-figure deals closed in the quarter,” said Rick McConnell, Chief Executive Officer.
The stock is down 5.5% since reporting and currently trades at $43.86.
Is now the time to buy Dynatrace? Find out by reading the original article on StockStory, it's free. Best Q1: Datadog (NASDAQ:DDOG (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 $611.3 million, up 26.9% year on year, outperforming analysts' expectations by 3.3%. It was a strong quarter for the company with an impressive beat of analysts' ARR (annual recurring revenue) estimates and accelerating growth in large customers.
The market seems content with the results as the stock is up 2.1% since reporting. It currently trades at $129.69.
Weakest Q1: F5 (NASDAQ:FFIV)Initially started as a hardware appliances company in the late 1990s, F5 (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 reported revenues of $681.4 million, down 3.1% year on year, in line with analysts' expectations. It was a weak quarter for the company with underwhelming revenue guidance for the next quarter and a miss of analysts' billings estimates.
F5 posted the weakest performance against analyst estimates and slowest revenue growth in the group. As expected, the stock is down 5% since the results and currently trades at $173.02.
Twilio (NYSE:NYSE:TWLO)Founded in 2008 by Jeff Lawson, a former engineer at Amazon (NASDAQ:AMZN), 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 $1.05 billion, up 4% year on year, surpassing analysts' expectations by 1.4%. Taking a step back, it was a decent quarter for the company with accelerating customer growth but underwhelming revenue guidance for the next quarter.
The company added 8,000 customers to reach a total of 313,000. The stock is down 9.9% since reporting and currently trades at $57.11.
Bandwidth (NASDAQ:BAND)Started in 1999 by David Morken who was later joined by Henry Kaestner as co-founder in 2001, Bandwidth (NASDAQ:BAND) provides thousands of customers with a software platform that uses its own global network to provide phone numbers, voice, and text connectivity.
Bandwidth reported revenues of $171 million, up 24.1% year on year, surpassing analysts' expectations by 3.6%. Revenue aside, it was a solid quarter for the company with optimistic revenue guidance for the next quarter and an improvement in its gross margin.
Bandwidth scored the highest full-year guidance raise among its peers. The stock is down 10.7% since reporting and currently trades at $18.35.
This content was originally published on Stock Story
