Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Twilio (NYSE:TWLO) and the best and worst performers in the software development industry.
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 2.1% on average since the latest earnings results.
Twilio (NYSE:TWLO)
Known for the clever "Twilio Magic" demo that had developers creating functioning communications apps in minutes, Twilio (NYSE:TWLO) provides a platform that enables businesses to communicate with their customers through voice, messaging, email, and other digital channels.
Twilio reported revenues of $1.3 billion, up 14.7% year on year. This print exceeded analysts’ expectations by 3.8%. Overall, it was an exceptional quarter for the company with accelerating customer growth and a solid beat of analysts’ EBITDA estimates.
Interestingly, the stock is up 18.5% since reporting and currently trades at $133.18.
Is now the time to buy Twilio? Access our full analysis of the earnings results here, it’s free for active Edge members.
Best Q3: JFrog (NASDAQ:FROG)
Named after the amphibian that continuously evolves from egg to tadpole to adult, JFrog (NASDAQ:FROG) 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 a solid 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 39.6% since reporting. It currently trades at $66.00.
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 (NASDAQ:FFIV)
Originally named after the F5 tornado, the most powerful on the meteorological scale, F5 (NASDAQ:FFIV) 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 9.5% since the results and currently trades at $262.96.
Read our full analysis of F5’s results here.
Cloudflare (NYSE:NET)
With a massive network spanning more than 310 cities in over 120 countries, Cloudflare (NYSE:NET) provides a global network that delivers security, performance and reliability services to protect websites, applications, and corporate networks.
Cloudflare reported revenues of $562 million, up 30.7% year on year. This print beat analysts’ expectations by 3.2%. Overall, it was an exceptional quarter as it also put up an impressive beat of analysts’ billings estimates and EPS guidance for next quarter exceeding analysts’ expectations.
Cloudflare pulled off the fastest revenue growth among its peers. The stock is down 12.1% since reporting and currently trades at $195.04.
Read our full, actionable report on Cloudflare here, it’s free for active Edge members.
Bandwidth (NASDAQ:BAND)
Powering communications for tech giants like Microsoft, Google, and Zoom, Bandwidth (NASDAQ:BAND) provides cloud-based communications software and APIs that enable businesses to embed voice, messaging, and emergency services into their applications and platforms.
Bandwidth reported revenues of $191.9 million, down 1% year on year. This result surpassed analysts’ expectations by 1%. It was a very strong quarter as it also recorded a solid beat of analysts’ EBITDA estimates and full-year EBITDA guidance beating analysts’ expectations.
Bandwidth had the slowest revenue growth among its peers. The stock is down 11.3% since reporting and currently trades at $14.88.
Read our full, actionable report on Bandwidth here, it’s free for active Edge members.
Market Update
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after 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 tariffs and corporate tax changes add uncertainty for 2025.
Want to invest in winners with rock-solid fundamentals? Check out our 9 Best Market-Beating Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
StockStory’s analyst team — all seasoned professional investors — uses quantitative analysis and automation to deliver market-beating insights faster and with higher quality.