As the Q4 earnings season wraps, let's dig into this quarter's best and worst performers in the software development industry, including Datadog (NASDAQ:DDOG) 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; on average, revenues beat analyst consensus estimates by 3%. while next quarter's revenue guidance was 0.8% above consensus. Valuation multiples for growth stocks have reverted to their historical means after reaching highs in early 2021, but software development stocks held their ground better than others, with share prices down 0.1% on average since the previous earnings results.

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 $589.6 million, up 25.6% year on year, topping analyst expectations by 3.8%. It was a mixed quarter for the company, with revenue and operating income outperforming Wall Street's estimates. On the other hand, its new large contract wins slowed. Looking ahead, both full-year revenue guidance and full-year operating income guidance missed Wall Street's estimates.

"We are pleased with our strong execution in fiscal year 2023, with 27% year-over-year revenue growth, $660 million in operating cash flow, and $598 million in free cash flow," said Olivier Pomel, co-founder and CEO of Datadog.

The stock is down 6.5% since the results and currently trades at $126.19.

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

Best Q4: Bandwidth (NASDAQ:BAND)

Started in 1999 by David Morken who was later joined by Henry Kaestner as co-founder in 2001, Bandwidth (NASDAQ:BAND) provides thousands of customers with a software platform that uses its own global network to provide phone numbers, voice, and text connectivity.

Bandwidth reported revenues of $165.4 million, up 5.4% year on year, outperforming analyst expectations by 7.4%. It was an exceptional quarter for the company, with a significant improvement in its net revenue retention rate and optimistic revenue guidance for the next quarter.

Bandwidth scored the biggest analyst estimates beat and highest full-year guidance raise among its peers. The stock is up 45.9% since the results and currently trades at $17.76.

Is now the time to buy Bandwidth? 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 $995 million, up 7.2% year on year, falling short of analyst expectations by 0.5%. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and a miss of analysts' revenue estimates.

Akamai had the weakest performance against analyst estimates in the group. The stock is down 15.5% since the results and currently trades at $105.75.

Read our full analysis of Akamai'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 $1.08 billion, up 5% year on year, surpassing analyst expectations by 3.2%. It was a weaker quarter for the company, with underwhelming revenue guidance for the next quarter and decelerating customer growth.

The company lost 1000 customers and ended up with a total of 305,000. The stock is down 15.7% since the results and currently trades at $61.02.

Read our full, actionable report on Twilio here, it's free.

PagerDuty (NYSE:PD)

Started by three former Amazon engineers, PagerDuty (NYSE:PD) is a software-as-a-service platform that helps companies respond to IT incidents fast and make sure that any downtime is minimized.

PagerDuty reported revenues of $111.1 million, up 10.1% year on year, in line with analyst expectations. It was a slower quarter for the company, with full-year revenue guidance missing analysts' expectations.

The company lost 10 customers and ended up with a total of 15,039. The stock is down 1.7% since the results and currently trades at $22.55.

Read our full, actionable report on PagerDuty here, it's free.

Join Paid Stock Investor Research

Help us make StockStory more helpful to investors like yourself. Join our paid user research session and receive a $50 Amazon gift card for your opinions. Sign up here.