Earnings Report (May 4, 2023)

 Earnings Report (May 4, 2023)

    I had 4 of my holdings report earnings today. I will summarize the earnings releases and give my thoughts on how I think the quarter went. 

Datadog, Inc. (DDOG)- Datadog reported earnings before the market opened this morning. The stock saw a major uptick as the company beat estimates on both the top and bottom line. Many had fears that the company was going to have some issues with cloud computing, but that didn't seem to be the case this quarter. The company was able to grow revenue at 33% and saw the customer growth continue. Datadog continues to innovate, in which they just recently launched their Data Streams Monitoring and Application Vulnerability Management. This widens the base of the customer and puts them in a better spot when it comes to security. The company had 2,910 customers with ARR over 100k, which is up from 2,250 last year. The company did report at a loss, when it was profitable last year. I think the investment in innovation and new products probably drove this down, as the Research and Development costs saw a pretty significant increase. 

My Thoughts: Datadog may have finally recovered. With prior quarters shooting the company down, the company came to perform this quarter. It looks to be doing a solid job in customer growth and revenue growth. I got into this one before the pandemic and it has not been the best for me. Growth stocks like these have hit the fan and tanked. I still firmly believe this is a solid company and still love it for the long-term. The customer growth is going up and the company is expanding the products it has to offer. The nice things about having an abundance of products is it makes it easier for the customer to use them whenever they all sync with each other. This quarter was solid and the run on the stock price was nice today. I am looking forward to them keeping it up.

Apple, Inc. (AAPL)- Apple reported earnings after the market closed this afternoon. Apple is currently inching higher in the after-hours trading. The company beat on both the top and bottom line compared to expectations. The Service Revenues reached an all-time high and iPhone revenue set a March quarter record. This was all done while the company is facing macroeconomic challenges. One of the most impressive things that never fails is the cash. Operating Cash Flow was $28.6 billion while they returned $23 billion to shareholders. The company announced an additional $90 billion share repurchase plan. They increased the quarterly dividend by 4% for an eleventh year in a row. Overall, just knock you off your socks, impressive

My Thoughts: Wow, what a phenomenal quarter from the company. The cash is king thing is sort of real when it comes to Apple. It is absurd to see how much cash they generate and reinvest. All this to say, iPad and Mac sales both missed expectations. I think this is a company that will be around forever and a company that will continue to adapt and be successful in a changing economy. This is one of my largest holdings and it has been on a tear after a bad run last year. I think it may be a little expensive for short-term purposes, but this is a stock that I recommend each investor has some sort of share in. 

Shopify Inc. (SHOP)- Shopify reported earnings after the market closed this afternoon. The stock price took off as the company beat expectations on both the top and bottom line. In big news, the company cut 20% of its workforce to try and cut costs. They are also selling its logistic business, which is huge, because Amazon dominates that niche. The CEO reiterated that the company is the go-to solution for powering businesses in where they sell their product. The outlook looks to be similar to the quarter they had this year. They are looking to continue innovation as Research and Development costs saw an increase. They are hoping to achieve some better Free Cash Flow, and this will come as the continue to perform.

My Thoughts: This quarter makes me ecstatic, the company made some big moves and the moves were for the better. I love the selling of their logistics and the layoff to cut costs. This is going to help grow the profitability and cash flow. The stock blew everything out of the water and looks to be starting on a nice track. I think an important thing that stood out to me was the partnerships they were swooping up to help other businesses efficiency. They also added tools to the platform to help customers with their online stores. Overall, it was a wonderful quarter to say the least and I hope the momentum continues on to future quarters. 

Atlassian Corporation (TEAM)- Atlassian reported earnings after the market closed this afternoon. Atlassian is seeing a sharp decline in the stock price despite the company beating top and bottom line estimates. Atlassian Intelligence seems to be the talk of the commentary with it mentioning about how it will unleash the customers potential and strengthen the company's competitive advantage it already holds. The reason for the decline has to be the slim miss on the guidance for the next quarter. Overall, the revenue increase looked nice and the company looks to be performing well. It will be interesting to see how much this AI implementation will come into play. 

My Thoughts: What a tough way to end the day, I was 3/4 on solid earnings reports. The company had a slight miss on guidance which caused an overreaction in my opinion. I think the thesis is unchanged and the company still looks solid. The innovation looks to be interesting and hopefully they can stay true to strengthening that competitive advantage. I like the revenue growth and the margins are so wide that the company looks more and more solid. This is a company that will continue to grow and stay effective to consumers. This is just a minor bump in the road and honestly a good time to add or enter into a position.

Thank you for reading!

All information is from Earnings Releases.