Software Development Stocks Q1 Highlights: Twilio (NYSE:TWLO)
Wrapping up Q1 earnings, we look at the numbers and key takeaways for the software development stocks, including Twilio (NYSE:TWLO) 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 8 software development stocks we track reported a slower Q1; on average, revenues beat analyst consensus estimates by 1.5%. 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 software development stocks have had a rough stretch, with share prices down 7% on average since the previous earnings results.
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 $1.05 billion, up 4% year on year, topping analysts' expectations by 1.4%. It was a decent quarter for the company, with accelerating customer growth but underwhelming revenue guidance for the next quarter.
“We are operating with greater financial discipline, operational rigor, and focus on innovation than ever before,” said Khozema Shipchandler, CEO of Twilio.
The stock is down 6.6% since the results and currently trades at $59.15.
Is now the time to buy Twilio? Access our full analysis of the earnings results here, it's free.
Best Q1: 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 $611.3 million, up 26.9% year on year, outperforming analysts' expectations by 3.3%. It was a mixed quarter for the company, with an impressive beat of analysts' ARR (annual recurring revenue) estimates and accelerating growth in large customers. However, billings missed. Overall, this quarter's results seemed fairly positive, although the billings blemish means it wasn't perfect.
The stock is down 2.5% since the results and currently trades at $123.76.
Is now the time to buy Datadog? Access our full analysis of the earnings results here, it's free.
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, falling short of analysts' expectations by 0.4%. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and a miss of analysts' billings estimates.
F5 had the weakest performance against analyst estimates and slowest revenue growth in the group. The stock is down 6.7% since the results and currently trades at $169.9.
Read our full analysis of F5'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 $987 million, up 7.8% year on year, falling short of analysts' expectations by 0.2%. It was a weak quarter for the company, with full-year revenue guidance missing analysts' expectations and underwhelming revenue guidance for the next quarter.
Akamai had the weakest full-year guidance update among its peers. The stock is down 8.1% since the results and currently trades at $94.29.
Read our full, actionable report on Akamai here, it's free.
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 $100.3 million, up 25.7% year on year, surpassing analysts' expectations by 1.7%. It was a weaker quarter for the company, with a miss of analysts' billings estimates and decelerating growth in large customers.
The company added 25 enterprise customers paying more than $100,000 annually to reach a total of 911. The stock is down 18.6% since the results and currently trades at $33.09.
Read our full, actionable report on JFrog here, it's free.
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