Q4 Earnings Outperformers: Dynatrace (NYSE:DT) And The Rest Of The Software Development Stocks
Quarterly earnings results are a good time to check in on a company’s progress, especially compared to other peers in the same sector. Today we are looking at Dynatrace (NYSE:DT), and the best and worst performers in the software development group.
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 Q4; on average, revenues beat analyst consensus estimates by 3% while next quarter's revenue guidance was 0.8% above consensus. Inflation (despite slowing) has investors prioritizing near-term cash flows, but software development stocks held their ground better than others, with share prices down 1.2% 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 $365.1 million, up 22.7% year on year, topping analyst expectations by 2.1%. It was a mixed quarter for the company, with revenue exceeding analysts' expectations. However, billings missed. And while full-year revenue guidance came in higher than Wall Street's estimates, full year ARR (annual recurring revenue) came in below expectations.
"Our Q3 results of balanced growth, profitability, and free cash flow reflect our continued ability to execute successfully in a dynamic market,” said Rick McConnell, Chief Executive Officer.
The stock is down 25.7% since the results and currently trades at $45.04.
Is now the time to buy Dynatrace? Access our full analysis of the earnings results here, it's free.
Best Q4: 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 $165.4 million, up 5.4% year on year, outperforming analyst expectations by 7.4%. It was an exceptional quarter for the company, with a significant improvement in its net revenue retention rate and optimistic revenue guidance for the next quarter.
Bandwidth delivered the biggest analyst estimates beat and highest full-year guidance raise among its peers. The stock is up 44.8% since the results and currently trades at $17.62.
Is now the time to buy Bandwidth? Access our full analysis of the earnings results here, it's free.
Weakest Q4: 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 $995 million, up 7.2% year on year, falling short of analyst expectations by 0.5%. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and a miss of analysts' revenue estimates.
Akamai had the weakest performance against analyst estimates in the group. The stock is down 14.4% since the results and currently trades at $107.08.
Read our full analysis of Akamai's results here.
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 $589.6 million, up 25.6% year on year, surpassing analyst expectations by 3.8%. It was a mixed quarter for the company, with revenue and operating income outperforming Wall Street's estimates. On the other hand, its new large contract wins slowed. Looking ahead, both full-year revenue guidance and full-year operating income guidance missed Wall Street's estimates.
The company added 60 enterprise customers paying more than $100,000 annually to reach a total of 3,190. The stock is down 9.4% since the results and currently trades at $122.2.
Read our full, actionable report on Datadog here, it's free.
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 $1.08 billion, up 5% year on year, surpassing analyst expectations by 3.2%. It was a weaker quarter for the company, with underwhelming revenue guidance for the next quarter and decelerating customer growth.
The company lost 1000 customers and ended up with a total of 305,000. The stock is down 15.2% since the results and currently trades at $61.4.
Read our full, actionable report on Twilio here, it's free.
Join Paid Stock Investor Research
Help us make StockStory more helpful to investors like yourself. Join our paid user research session and receive a $50 Amazon gift card for your opinions. Sign up here.
