Looking back on software development stocks’ Q1 earnings, we examine this quarter’s best and worst performers, including Dynatrace (NYSE:DT) 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 16% on average since the latest earnings results.
Dynatrace (NYSE:DT)
Founded in Austria in 2005, Dynatrace (NYSE:DT) provides companies with software that allows them to monitor the performance of their full technology stack, from software applications to the infrastructure they run on.
Dynatrace reported revenues of $445.2 million, up 16.9% year on year. This print exceeded analysts’ expectations by 2.4%. Overall, it was a very strong quarter for the company with EPS guidance for next quarter exceeding analysts’ expectations and a solid beat of analysts’ EBITDA estimates.
"Dynatrace delivered a strong finish to fiscal 2025. Our fourth quarter results exceeded guidance on all of our key operating metrics, fueled by broad consumption growth across the platform," said Rick McConnell, Chief Executive Officer of Dynatrace.
Dynatrace scored the highest full-year guidance raise of the whole group. Unsurprisingly, the stock is up 8.5% since reporting and currently trades at $54.80.
We think Dynatrace is a good business, but is it a buy today? Read our full report 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 an impressive beat of analysts’ EBITDA estimates.
Fastly achieved the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 15.1% since reporting. It currently trades at $6.92.
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 11.4% since the results and currently trades at $295.21.
Read our full analysis of F5’s results here.
Twilio (NYSE:TWLO)
Founded in 2008 by Jeff Lawson, a former engineer at Amazon, Twilio (NYSE:TWLO) is a software as a service platform that makes it really easy for software developers to use text messaging, voice calls and other forms of communication in their apps.
Twilio reported revenues of $1.17 billion, up 12% year on year. This number surpassed analysts’ expectations by 2.6%. Overall, it was a strong quarter as it also recorded accelerating customer growth and a solid beat of analysts’ EBITDA estimates.
The company added 10,000 customers to reach a total of 335,000. The stock is up 18.8% since reporting and currently trades at $116.30.
Read our full, actionable report on Twilio 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 $479.1 million, up 26.5% year on year. This print beat analysts’ expectations by 2.1%. Aside from that, it was a decent quarter as it also logged an impressive beat of analysts’ billings estimates.
The stock is up 49.1% since reporting and currently trades at $185.64.
Read our full, actionable report on Cloudflare 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.
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.