It’s been a challenging week. It’s tempting to believe that everything is bad after the Supreme Court leak, much too much layoff news, the stock prices of the top tech firms falling, and a general sense that the economy is heading in the wrong direction. But we’re here to cheer you up a little if only to let you know that everything isn’t as horrible as it seems. There are still some businesses that are doing extremely well, and we wanted to highlight four of them this week.
While it’s tempting to believe that everyone is suddenly on a train to nowhere, recent financial reports from a number of software businesses show that IT shops are nevertheless thriving. How high do you want to go? Some had growth rates of more than 50%, and 60% was not unheard of. Furthermore, the firms we’re looking at today all gave upbeat forecasts. Despite excellent profits and an optimistic outlook, investors treated the firms in a variety of ways, from noncommittal to downright hostile.
There’s a case to be made that certain IT businesses would perform better in a recession or comparable macroeconomic slowdown than some appear to expect now; in other words, the lessons of mid-2020 may need to be relearned. Let’s take a look at Cloudflare and Confluent’s findings to observe how the market reacts to even the most respectable performance. We’ll also look at Amplitude, a firm that took a beating following its Q4 2021 earnings release and had to make amends in its most recent financial report, and we’ll wrap off with Appian.
Cloudflare, The Q1 2022 earnings report from Cloudflare is an excellent barometer of the current state of affairs. What do you mean by that? In the most recent quarter, the firm exceeded sales estimates, reporting a top line of $212.2 million, greatly above expectations of roughly $205 million. That’s the kind of year-over-year increase that would have been electrifying last year.
For those keeping track at home, Cloudflare’s first-quarter revenue increased by 54% year over year. There was also some good news, such as the addition of 14,000 new subscribers throughout the time period. Furthermore, clients who spent at least $500,000 increased by 68 percent, while those who spent $1 million or more increased by 72 percent. Cloudflare’s greatest clients continued to expand, bringing in more income, as CEO and co-founder Matthew Prince put it. Furthermore, the company’s forecasts show no signs of a slowdown.