Spotting Winners: PagerDuty (NYSE:PD) And Software Development Stocks In Q3

The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how software development stocks fared in Q3, starting with PagerDuty .

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 very strong Q3. As a group, revenues beat analysts’ consensus estimates by 2.7% while next quarter’s revenue guidance was in line.

In light of this news, share prices of the companies have held steady as they are up 1.3% on average since the latest earnings results.

PagerDuty

Born from the frustration of developers being woken up by unprioritized alerts, PagerDuty 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 revenues of $124.5 million, up 4.7% year on year. This print was in line with analysts’ expectations, but overall, it was a slower quarter for the company with full-year revenue guidance missing analysts’ expectations significantly and revenue guidance for next quarter missing analysts’ expectations significantly.

PagerDuty achieved the highest full-year guidance raise but had the weakest performance against analyst estimates of the whole group. The company added 76 customers to reach a total of 15,398. Still, the market seems discontent with the results. The stock is down 36.4% since reporting and currently trades at $12.12.

Read our full report on PagerDuty here, it’s free for active Edge members.

Best Q3: JFrog

Named after the amphibian that continuously evolves from egg to tadpole to adult, JFrog provides a platform that helps organizations securely create, store, manage, and distribute software packages across any system.

JFrog reported revenues of $136.9 million, up 25.5% year on year, outperforming analysts’ expectations by 6.6%. The business had an exceptional quarter with an impressive beat of analysts’ billings estimates and EPS guidance for next quarter exceeding analysts’ expectations.

JFrog scored the biggest analyst estimates beat among its peers. The company added 45 enterprise customers paying more than $100,000 annually to reach a total of 1,121. The market seems happy with the results as the stock is up 36.4% since reporting. It currently trades at $64.47.

Is now the time to buy JFrog? Access our full analysis of the earnings results here, it’s free for active Edge members.

Weakest Q3: F5

Originally named after the F5 tornado, the most powerful on the meteorological scale, F5 provides security and delivery solutions that protect applications across cloud, data center, and edge environments for large organizations.

F5 reported revenues of $810.1 million, up 8.5% year on year, exceeding analysts’ expectations by 2%. Still, it was a slower quarter as it posted full-year EPS guidance missing analysts’ expectations significantly and revenue guidance for next quarter missing analysts’ expectations significantly.

As expected, the stock is down 15.6% since the results and currently trades at $245.19.

Read our full analysis of F5’s results here.

Dynatrace

With its platform processing over 30 trillion pieces of IT performance data daily, Dynatrace provides an AI-powered platform that helps organizations monitor, secure, and optimize their applications and IT infrastructure across cloud environments.

Dynatrace reported revenues of $493.8 million, up 18.1% year on year. This number topped analysts’ expectations by 1.3%. Taking a step back, it was a satisfactory quarter as it also produced an impressive beat of analysts’ EBITDA estimates but a significant miss of analysts’ billings estimates.

The stock is down 9.8% since reporting and currently trades at $44.78.

Read our full, actionable report on Dynatrace here, it’s free for active Edge members.

Fastly

Taking its name from the core advantage it delivers to customers, Fastly 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 revenues of $158.2 million, up 15.3% year on year. This print beat analysts’ expectations by 4.7%. Overall, it was an exceptional quarter as it also logged EPS guidance for next quarter exceeding analysts’ expectations and an impressive beat of analysts’ EBITDA estimates.

Fastly had the weakest full-year guidance update among its peers. The stock is up 28.2% since reporting and currently trades at $10.35.

Read our full, actionable report on Fastly here, it’s free for active Edge members.