As the Q1 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 strong Q1. As a group, revenues beat analysts’ consensus estimates by 2.3% while next quarter’s revenue guidance was in line.
Luckily, software development stocks have performed well with share prices up 17.5% on average 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 $122.4 million, up 22% year on year. This print exceeded analysts’ expectations by 4.4%. Overall, it was a strong quarter for the company with a solid beat of analysts’ billings estimates and an impressive beat of analysts’ EBITDA estimates.
“The JFrog Platform has become the software system of record for organizations, transforming how software is created and delivered by unifying DevOps, DevSecOps, and AI/MLOps in one platform,” said Shlomi Ben Haim, CEO and Co-founder of JFrog.
Interestingly, the stock is up 18% since reporting and currently trades at $41.55.
Is now the time to buy JFrog? Access our full analysis of the earnings results here, it’s free.
Best Q1: Fastly (NYSE: FSLY)
Founded in 2011, Fastly (NYSE: FSLY) provides content delivery and edge cloud computing services, enabling enterprises and developers to deliver fast, secure, and scalable digital content and experiences.
Fastly reported revenues of $144.5 million, up 8.2% year on year, outperforming analysts’ expectations by 4.8%. The business had an exceptional quarter with a solid beat of analysts’ EBITDA estimates.
Fastly pulled off the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 19.8% since reporting. It currently trades at $7.20.
Is now the time to buy Fastly? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: 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 $731.1 million, up 7.3% year on year, exceeding analysts’ expectations by 1.7%. Still, it was a mixed quarter as it posted EPS guidance for next quarter missing analysts’ expectations.
Interestingly, the stock is up 14% since the results and currently trades at $302.
Read our full analysis of F5’s results here.
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 $479.1 million, up 26.5% year on year. This number surpassed analysts’ expectations by 2.1%. Zooming out, it was a mixed quarter as it also produced an impressive beat of analysts’ billings estimates but EPS guidance for next quarter missing analysts’ expectations significantly.
The stock is up 54.2% since reporting and currently trades at $191.98.
Read our full, actionable report on Cloudflare here, it’s free.
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 2.9% year on year. This result met analysts’ expectations. Overall, it was a strong quarter as it also put up a solid beat of analysts’ EBITDA estimates and EPS guidance for next quarter topping analysts’ expectations.
Akamai had the weakest performance against analyst estimates among its peers. The stock is down 5.7% since reporting and currently trades at $80.68.
Read our full, actionable report on Akamai here, it’s free.
Market Update
Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.
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