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 Dynatrace (NYSE: DT) 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 1.4% on average since the latest earnings results.

Dynatrace (NYSE: DT)

With its platform processing over 30 trillion pieces of IT performance data daily, Dynatrace (NYSE: DT) 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 print exceeded analysts’ expectations by 1.3%. Overall, it was a satisfactory quarter for the company with a solid beat of analysts’ EBITDA estimates but a significant miss of analysts’ billings estimates.

“Our strong second quarter results were fueled by the growing demand for end-to-end observability driven by large-scale tool consolidations,” said Rick McConnell, CEO of Dynatrace.

Unsurprisingly, the stock is down 10% since reporting and currently trades at $44.66.

Is now the time to buy Dynatrace? 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 35.5% since reporting. It currently trades at $64.03.

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 11.8% since the results and currently trades at $256.15.

Read our full analysis of F5’s results here.

GitLab (NASDAQ: GTLB)

With its all-remote workforce pioneering a new approach to software development, GitLab (NASDAQ: GTLB) provides a single-application DevSecOps platform that helps development, operations, and security teams collaborate to build, secure, and deploy software faster.

GitLab reported revenues of $244.4 million, up 24.6% year on year. This result surpassed analysts’ expectations by 2.2%. Zooming out, it was a mixed quarter as it also recorded an impressive beat of analysts’ EBITDA estimates but a significant miss of analysts’ billings estimates.

The stock is down 12.5% since reporting and currently trades at $37.96.

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

Fastly (NYSE: FSLY)

Taking its name from the core advantage it delivers to customers, Fastly (NYSE: FSLY) 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 recorded EPS guidance for next quarter exceeding analysts’ expectations and a solid beat of analysts’ EBITDA estimates.

Fastly had the weakest full-year guidance update among its peers. The stock is up 23.7% since reporting and currently trades at $9.98.

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

Market Update

As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.

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