As Q2 earnings season comes to a close, let’s take a look at this quarter’s best and worst performers in the software development industry, including GitLab (NASDAQ:GTLB) and its peers.
As legendary venture capital investor Marc Andreessen says, “Software is eating the world,” and it’s affecting virtually every industry. That’s driving increasing demand for tools that help software developers do their work, whether it’s monitoring critical cloud infrastructure, integrating audio and video functionality, or ensuring smooth content streaming.
The eleven software development stocks we track reported a strong second quarter. As a group, revenues exceeded analyst consensus expectations by 2.6%, while revenue expectations for the next quarter were in line.
Fortunately, the companies’ share prices have been resilient, having risen an average of 8.8% since the last earnings results.
With its fully remote workforce pioneering a new approach to software development, GitLab (NASDAQ:GTLB) offers a single-application DevSecOps platform that allows development, operations and security teams to work together to build, secure and deploy software faster.
GitLab reported revenue of $236 million, up 29.2% year over year. This print exceeded analyst expectations by 4%. Despite the revenue growth, it was still a mixed quarter for the company, with a solid gain in analyst EBITDA estimates, but revenue expectations for the next quarter lagging slightly behind analyst expectations.
“This quarter’s results demonstrate the power of GitLab’s AI-native DevSecOps platform as we continue to drive customer-centric innovation,” said Bill Staples, CEO of GitLab.
GitLab achieved the fastest revenue growth of the entire group. Unsurprisingly, the stock is up 1.1% since reporting and is currently trading at $47.44.
Is Now the Time to Buy GitLab? See our full analysis of the revenue results here. This is free for active Edge members.
Fastly (NYSE:FSLY) derives its name from the core benefit it offers customers and operates an edge cloud platform that processes, secures and delivers web content as close to end users as possible, enabling faster digital experiences.
Fastly reported revenue of $148.7 million, up 12.3% year over year, and beat analyst expectations by 2.7%. The company had an exceptional quarter, with next quarter earnings per share expectations exceeding analyst expectations and an impressive improvement in analyst EBITDA estimates.
The market seems pleased with the results, as the stock is up 32.7% since reporting. It is currently trading at $8.64.
Is Now the Time to Buy Fastly? See our full analysis of the revenue results here. This is free for active Edge members.
Born out of the frustration of developers being woken up by unprioritized alerts, PagerDuty (NYSE:PD) is a digital operations management platform that helps organizations detect and respond to IT incidents, outages and other critical issues in real time.
PagerDuty reported revenue of $123.4 million, up 6.4% year over year, in line with analyst expectations. It was a slower quarter as earnings estimates for the following quarter missed analyst expectations and analyst estimates by a significant margin.
PagerDuty had the weakest performance compared to analyst estimates in the group. The company added 75 customers, reaching a total of 15,322. Interestingly, the stock is up 6.1% since the results and is currently trading at $16.57.
Read our full analysis of PagerDuty’s results here.
Named after the amphibian that continually evolves from egg to tadpole to adult, JFrog (NASDAQ:FROG) provides a platform that allows organizations to securely create, store, manage and distribute software packages across any system.
JFrog reported revenue of $127.2 million, up 23.5% year over year. This number exceeded analyst expectations by 3.5%. It was a strong quarter as it also delivered an impressive return from analyst EBITDA estimates and a solid gain from analyst billing estimates.
The company has added 25 business customers paying more than $100,000 annually, bringing the total to 1,076. The stock is up 23.7% since reporting and is currently trading at $48.05.
Read our full, actionable report on JFrog here, it’s free for active Edge members.
Known for its clever “Twilio Magic” demo that allowed developers to create functioning communications apps in minutes, Twilio (NYSE:TWLO) offers a platform that allows businesses to communicate with their customers through voice, messaging, email and other digital channels.
Twilio reported revenue of $1.23 billion, up 13.5% year over year. This result exceeded analyst expectations by 3.4%. Overall, it was a strong quarter as it also solidly beat analyst EBITDA estimates and accelerated customer growth.
The company added 14,000 customers, reaching a total of 349,000. The stock is down 6.7% since reporting and is currently trading at $114.40.
Read our full, actionable report on Twilio here. It’s free for active Edge members.
The Fed’s rate hikes in 2022 and 2023 successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without the economy entering a recession, pointing to a soft landing. This stability, combined with recent interest rate cuts (0.5% in September 2024 and 0.25% in November 2024), made for a strong year for the stock market in 2024. Markets continued to rally following Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy as potential corporate tax rates and changes increase uncertainty for 2025.
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