As the Q4 earnings season wraps, let’s dig into this quarter’s best and worst performers in the software development industry, including JFrog (NASDAQ: FROG) and its peers.

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 mixed Q4. As a group, revenues beat analysts’ consensus estimates by 2.4% while next quarter’s revenue guidance was in line.

Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 23.6% since the latest earnings results.

JFrog (NASDAQ: FROG)

Named after the founders' affinity for frogs, JFrog (NASDAQ: FROG) provides a software-as-a-service platform that makes developing and releasing software easier and faster, especially for large teams.

JFrog reported revenues of $116.1 million, up 19.3% year on year. This print exceeded analysts’ expectations by 1.5%. Overall, it was a satisfactory quarter for the company with a solid beat of analysts’ EBITDA estimates but a significant miss of analysts’ annual recurring revenue estimates.

The stock is down 17.8% since reporting and currently trades at $31.01.

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

Best Q4: F5 (NASDAQ: FFIV)

Initially started as a hardware appliances company in the late 1990s, F5 (NASDAQ: FFIV) makes software that helps large enterprises ensure their web applications are always available by distributing network traffic and protecting them from cyberattacks.

F5 reported revenues of $766.5 million, up 10.7% year on year, outperforming analysts’ expectations by 7.2%. The business had a strong quarter with an impressive beat of analysts’ billings estimates and a solid beat of analysts’ EBITDA estimates.

F5 pulled off the biggest analyst estimates beat among its peers. The stock is down 1.1% since reporting. It currently trades at $266.91.

Is now the time to buy F5? Access our full analysis of the earnings results here, it’s free.

Weakest Q4: Akamai (NASDAQ: AKAM)

Founded in 1999 by two engineers from MIT, Akamai (NASDAQ: AKAM) provides software for organizations to efficiently deliver web content to their customers.

Akamai reported revenues of $1.02 billion, up 2.5% year on year, in line with analysts’ expectations. It was a softer quarter as it posted full-year guidance of slowing revenue growth and full-year EPS guidance missing analysts’ expectations significantly.

Akamai delivered the weakest performance against analyst estimates and weakest full-year guidance update in the group. As expected, the stock is down 24.4% since the results and currently trades at $74.12.

Read our full analysis of Akamai’s results here.

Datadog (NASDAQ: DDOG)

Named after a database the founders had to painstakingly look after at their previous company, Datadog (NASDAQ: DDOG) is a software-as-a-service platform that makes it easier to monitor cloud infrastructure and applications.

Datadog reported revenues of $737.7 million, up 25.1% year on year. This print beat analysts’ expectations by 3%. Aside from that, it was a mixed quarter as it also recorded an impressive beat of analysts’ annual recurring revenue estimates but full-year EPS guidance missing analysts’ expectations significantly.

The company added 120 enterprise customers paying more than $100,000 annually to reach a total of 3,610. The stock is down 36.7% since reporting and currently trades at $93.69.

Read our full, actionable report on Datadog here, it’s free.

Cloudflare (NYSE: NET)

Founded by two grad students of Harvard Business School, Cloudflare (NYSE: NET) is a software-as-a-service platform that helps improve the security, reliability, and loading times of internet applications.

Cloudflare reported revenues of $459.9 million, up 26.9% year on year. This number topped analysts’ expectations by 1.8%. Taking a step back, it was a mixed quarter as it also logged an impressive beat of analysts’ EBITDA estimates but full-year EPS guidance missing analysts’ expectations significantly.

The stock is down 22.7% since reporting and currently trades at $109.30.

Read our full, actionable report on Cloudflare here, it’s free.

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.

Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Growth Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

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