As Q4 earnings season draws to a close, it’s time to review the best and worst performers in the software development industry this quarter, including Cloudflare ( NYSE:NET ) and its competitors.
As legendary VC investor Marc Andreessen says, “Software is eating the world” and it touches almost every industry. This is driving increasing demand for tools that help software developers do their jobs, whether it’s 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 analysts’ consensus estimates by 3%. while revenue guidance for the next quarter was 0.8% above consensus. Stocks faced challenges as investors prioritize short-term cash flows, but software development stocks held up better than others, with share prices up an average of 1.4% from previous earnings results.
Cloudflare (NYSE:NET)
Founded by two Harvard Business School graduate students, Cloudflare (NYSE:NET) is a software-as-a-service platform that helps improve the security, reliability and load times of Internet applications and websites.
Cloudflare reported revenue of $362.5 million, up 32% year-over-year, beating analysts’ expectations by 2.7%. It was a decent quarter for the company, with revenue exceeding analysts’ expectations. Its guidance for the full year also indicated that the company can maintain a high level of growth.
The stock is up 8.3% since the results and is currently trading at $97.92.
Is now the time to buy Cloudflare? Access our full earnings performance analysis here, it’s free.
Best Q4: Bandwidth (NASDAQ:BAND)
Started in 1999 by David Morken and later joined by Henry Kaestner as a 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 revenue of $165.4 million, up 5.4% year-over-year, beating analysts’ expectations by 7.4%. It was an exceptional quarter for the company, with significant improvement in net income retention rate and optimistic revenue guidance for next quarter.
Bandwidth posted the biggest beat of analysts’ estimates and the biggest full-year guidance increase among peers. The stock is up 48% since the results and currently trades at $18.01.
Is Now the Time to Buy Bandwidth? Access our full earnings performance analysis here, it’s free.
Weakest Q4: Akamai (NASDAQ:AKAM)
Founded in 1999 by two MIT engineers, Akamai (NASDAQ:AKAM) provides software for organizations to efficiently deliver web content to their customers.
Akamai reported revenue of $995 million, up 7.2% year over year, below analysts’ expectations of 0.5%. It was a weak quarter for the company, with lackluster revenue guidance for the next quarter and missing analysts’ revenue estimates.
Akamai was the weakest performer relative to analyst estimates in the group. The stock is down 12.6% since the results and is currently trading at $109.42.
Read our full analysis of Akamai’s results here.
HashiCorp (NASDAQ:HCP)
Initially created as a research project at the University of Washington, HashiCorp ( NASDAQ:HCP ) provides software that helps companies manage their own applications in a multi-cloud environment.
HashiCorp reported revenue of $155.8 million, up 14.7% year over year, beating analysts’ expectations by 4.3%. It was a mixed quarter for the company, with full-year revenue guidance falling short of analysts’ expectations. On the other hand, revenue and earnings per share beat Wall Street expectations during the quarter.
HashiCorp had the weakest full-year updated guidance among its peers. The company added 20 enterprise clients paying more than $100,000 a year to bring the total to 897. The stock is up 10.9% since the results and is currently trading at $26.55.
Read our full, actionable report on HashiCorp here, it’s free.
GitLab (NASDAQ:GTLB)
Founded as an open source project in 2011, GitLab (NASDAQ:GTLB) is a leading software development tools platform.
GitLab reported revenue of $163.8 million, up 33.3% year over year, beating analyst expectations by 3.5%. It was a mixed quarter for the company, with revenue beating analysts’ estimates, driven by a better-than-expected net income retention rate (130% vs. estimates of 127%). On the other hand, its full-year revenue guidance fell short of expectations, and its full-year EPS guidance fell significantly short, coming in 43% below analysts’ estimates.
GitLab achieved the fastest revenue growth among its peers. The stock is down 20.1% since the results and is currently trading at $59.52.
Read our full, actionable GitLab report here, it’s free.
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