The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how DigitalOcean (NYSE: DOCN) and the rest of the data storage stocks fared in Q1.
Data is the lifeblood of the internet and software in general, and the amount of data created is accelerating. As a result, the importance of storing the data in scalable and efficient formats continues to rise, especially as its diversity and associated use cases expand from analyzing simple, structured datasets to high-scale processing of unstructured data such as images, audio, and video.
The 5 data storage stocks we track reported a strong Q1. As a group, revenues beat analysts’ consensus estimates by 3% 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 4% on average since the latest earnings results.
Weakest Q1: DigitalOcean (NYSE: DOCN)
Started by brothers Ben and Moisey Uretsky, DigitalOcean (NYSE: DOCN) provides a simple, low-cost platform that allows developers and small and medium-sized businesses to host applications and data in the cloud.
DigitalOcean reported revenues of $210.7 million, up 14.1% year on year. This print exceeded analysts’ expectations by 1%. Despite the top-line beat, it was still a mixed quarter for the company with a solid beat of analysts’ EBITDA estimates but EPS guidance for next quarter missing analysts’ expectations significantly.
“The momentum we generated in 2024 in both core cloud and AI continued into Q1, as we grew total revenue 14% year-over-year, our highest quarterly growth rate since Q3 2023, with AI ARR continuing to grow north of 160% year-over-year, and we delivered more than 50 new product features, over 5 times as many as we delivered in Q1 of last year.” said Paddy Srinivasan, CEO of DigitalOcean.
DigitalOcean delivered the weakest performance against analyst estimates and weakest full-year guidance update of the whole group. Unsurprisingly, the stock is down 15% since reporting and currently trades at $27.83.
Read our full report on DigitalOcean here, it’s free.
Best Q1: Commvault Systems (NASDAQ: CVLT)
Originally formed in 1988 as part of Bell Labs, Commvault (NASDAQ: CVLT) provides enterprise software used for data backup and recovery, cloud and infrastructure management, retention, and compliance.
Commvault Systems reported revenues of $275 million, up 23.2% year on year, outperforming analysts’ expectations by 4.8%. The business had a very strong quarter with a solid beat of analysts’ billings estimates and an impressive beat of analysts’ EBITDA estimates.
Commvault Systems delivered the biggest analyst estimates beat and highest full-year guidance raise among its peers. The market seems happy with the results as the stock is up 8.3% since reporting. It currently trades at $179.45.
Is now the time to buy Commvault Systems? Access our full analysis of the earnings results here, it’s free.
Couchbase (NASDAQ: BASE)
Formed in 2011 with the merger of Membase and CouchOne, Couchbase (NASDAQ: BASE) is a database-as-a-service platform that allows enterprises to store large volumes of semi-structured data.
Couchbase reported revenues of $56.52 million, up 10.1% year on year, exceeding analysts’ expectations by 1.7%. It was a satisfactory quarter as it also posted an impressive beat of analysts’ EBITDA estimates but a significant miss of analysts’ billings estimates.
Couchbase delivered the slowest revenue growth in the group. Interestingly, the stock is up 6.6% since the results and currently trades at $19.79.
Read our full analysis of Couchbase’s results here.
Snowflake (NYSE: SNOW)
Founded in 2013 by three French engineers who spent decades working for Oracle, Snowflake (NYSE: SNOW) provides a data warehouse-as-a-service in the cloud that allows companies to store large amounts of data and analyze it in real time.
Snowflake reported revenues of $1.04 billion, up 25.7% year on year. This print beat analysts’ expectations by 3.4%. Aside from that, it was a satisfactory quarter as it also recorded an impressive beat of analysts’ EBITDA estimates but a miss of analysts’ billings estimates.
Snowflake delivered the fastest revenue growth among its peers. The company added 26 enterprise customers paying more than $1 million annually to reach a total of 606. The stock is up 18.1% since reporting and currently trades at $211.65.
Read our full, actionable report on Snowflake here, it’s free.
MongoDB (NASDAQ: MDB)
Started in 2007 by the team behind Google’s ad platform, DoubleClick, MongoDB offers database-as-a-service that helps companies store large volumes of semi-structured data.
MongoDB reported revenues of $549 million, up 21.9% year on year. This number surpassed analysts’ expectations by 4.1%. It was a very strong quarter as it also logged EPS guidance for next quarter exceeding analysts’ expectations and a solid beat of analysts’ EBITDA estimates.
The company added 110 enterprise customers paying more than $100,000 annually to reach a total of 2,506. The stock is up 2.1% since reporting and currently trades at $204.
Read our full, actionable report on MongoDB here, it’s free.
Market Update
Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.
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