Software Development Stocks Q3 Teardown: Twilio (NYSE:TWLO) vs. the Rest
As third-quarter 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 Twilio (NYSE:TWLO) 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 third quarter. As a group, revenues exceeded analyst consensus expectations by 3.3%, while revenue expectations for the next quarter were 0.7% above.
Fortunately, the companies’ share prices have been resilient, having risen an average of 6.1% since the last earnings results.
Founded in 2008 by Jeff Lawson, a former engineer at Amazon, Twilio (NYSE: TWLO) is a software-as-a-service platform that makes it easy for software developers to use text messages, voice calls and other forms of communication in use their apps.
Twilio reported revenue of $1.13 billion, up 9.7% year over year. This print exceeded analyst expectations by 3.7%. Overall, it was a very strong quarter for the company, with earnings per share expectations for next quarter exceeding analyst expectations and an impressive improvement in analyst EBITDA estimates.
Twilio Total Revenue
Interestingly, the stock is up 57.6% since reporting and is currently trading at $111.20.
Is Now the Time to Buy Twilio? See our full analysis of earnings results here. It’s free.
JFrog (NASDAQ:FROG), named after its founders’ affinity for frogs, offers a software-as-a-service platform that makes developing and releasing software easier and faster, especially for large teams.
JFrog reported revenue of $109.1 million, up 23% year over year, and beat analyst expectations by 3.3%. The company had a very strong quarter with an impressive return on analyst expectations and accelerating growth among major customers.
JFrog total revenue
While it had a good quarter compared to its peers, the market seems unhappy with the results as the stock is down 6.3% since reporting. It is currently trading at $30.82.
Is Now the Time to Buy JFrog? See our full analysis of earnings results here. It’s free.
Founded in 1999 by two MIT engineers, Akamai (NASDAQ:AKAM) provides software that helps organizations efficiently deliver Web content to their customers.
Akamai reported revenue of $1.00 billion, up 4.1% year over year, beating analyst expectations by 0.5%. Still, it was a slower quarter as full-year revenue expectations were roughly in line with analyst expectations.
Akamai delivered the weakest performance compared to analyst estimates, the slowest revenue growth and the weakest full-year guidance update within the group. As expected, the stock has fallen 6.1% since the results and is currently trading at $98.03.
Read our full analysis of Akamai’s results here.
HashiCorp (NASDAQ:HCP), originally founded as a research project at the University of Washington, provides software that allows companies to manage their own applications in a multi-cloud environment.
HashiCorp reported revenue of $173.4 million, up 18.7% year over year. This result exceeded analyst expectations by 6.1%. It was a strong quarter as analyst EBITDA estimates and billings were also achieved impressively, in line with analyst expectations.
The company added 12 corporate customers paying more than $100,000 annually, bringing the total to 946. The stock is up 1.5% since reporting and is currently trading at $34.12.
Read our full, actionable report on HashiCorp here. It’s free.
Founded as an open source project in 2011, GitLab (NASDAQ:GTLB) is a leading platform for software development tools.
GitLab reported revenue of $196 million, up 31% year over year. This figure exceeded analyst expectations by 4.1%. Overall, it was a strong quarter as it also delivered EPS guidance for next quarter that exceeded analyst expectations and a solid improvement in analyst EBITDA estimates.
GitLab achieved the fastest revenue growth among its competitors. The stock is down 9.8% since reporting and is currently trading at $59.61.
Read our full, actionable report on GitLab here. It’s free.
Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs and is moving closer to the 2% target. This disinflation has occurred without serious consequences for economic growth, indicating a soft landing success. The stock market boomed in 2024, boosted by recent interest rate cuts (0.5% in September and 0.25% each in November and December), and a notable rally followed Donald Trump’s victory in the presidential election in November, pushing the indices were pushed to historic highs. Nevertheless, the outlook for 2025 remains clouded by the pace and magnitude of future rate cuts and by potential changes to trade policy and corporate taxes once the Trump administration takes over. The path forward is marked by uncertainty.
Do you want to invest in winners with rock-solid fundamentals? Check out our Strong Momentum stocks and add them to your watchlist. These companies are primed for growth regardless of the political or macroeconomic environment.
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