NET) Vs The Rest Of The Software Development Stocks

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Winners And Losers Of Q4: Cloudflare (NYSE:NET) Vs The Rest Of The Software Development Stocks

As the Q4 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the software development industry, including Cloudflare (NYSE:NET) 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 mixed Q4; on average, revenues beat analyst consensus estimates by 3%. while next quarter’s revenue guidance was 0.8% above consensus. Stocks have faced challenges as investors prioritize near-term cash flows, but software development stocks held their ground better than others, with the share prices up 1.4% on average since the previous earnings results.

Cloudflare (NYSE:NET)

Founded by two grad students of Harvard Business School, Cloudflare (NYSE:NET) is a software as a service platform that helps improve security, reliability and loading times of internet applications and websites.

Cloudflare reported revenues of $362.5 million, up 32% year on year, topping analyst expectations by 2.7%. It was a decent quarter for the company, with revenue exceeding analysts’ expectations. Its full-year guidance also showed the company can maintain a strong level of growth.

Cloudflare Total RevenueCloudflare Total Revenue

Cloudflare Total Revenue

The stock is up 8.3% since the results and currently trades at $97.92.

Is now the time to buy Cloudflare? 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 Total RevenueBandwidth Total Revenue

Bandwidth Total Revenue

Bandwidth achieved the biggest analyst estimates beat and highest full-year guidance raise among its 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 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 12.6% since the results and currently trades 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 operate their own applications in a multi-cloud environment.

HashiCorp reported revenues of $155.8 million, up 14.7% year on year, surpassing analyst expectations by 4.3%. It was a mixed quarter for the company, with full-year revenue guidance missing analysts’ expectations. On the other hand, revenue and EPS exceeded Wall Street’s expectations during the quarter.

HashiCorp had the weakest full-year guidance update among its peers. The company added 20 enterprise customers paying more than $100,000 annually to reach a total of 897. The stock is up 10.9% since the results and currently trades 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 revenues of $163.8 million, up 33.3% year on year, surpassing analyst expectations by 3.5%. It was a mixed quarter for the company, with revenue exceeding analysts’ estimates, driven by a better-than-expected net revenue retention rate (130% vs estimates of 127%). On the other hand, its full-year revenue guidance was below expectations and its full-year EPS guidance significantly missed, coming in 43% below analysts’ forecasts.

GitLab delivered the fastest revenue growth among its peers. The stock is down 20.1% since the results and currently trades at $59.52.

Read our full, actionable report on GitLab here, it’s free.

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