The Developer Tools Index's Posts

$741.1kFollowers

@developertoolsindex11/03/2023

Confluent's Q3 Earnings: A Bounce Amid a Stock Dip

Confluent's stock fell 43%, but Q3 shone with a positive non-GAAP EPS and a 32% YoY revenue rise to $200M, driven by a 61% YoY cloud revenue jump to $92M. This highlights Confluent's solid growth amid fierce competition, notably from Apache Kafka.

Despite rivals, continuous innovation has kept Confluent ahead, appealing to a wide industry range.

Key points:

Shifting to a usage-based revenue model, Confluent is aligning sales structures with customer needs, signaling sustained growth.

The new Enterprise SKU and new features like Instant Auto-Scaling Clusters and Data Portal boost market position, targeting a $60 billion TAM, and enhancing security, scale, and real-time AI.

The stock fell 43% on November 2 due to dimmed forward outlook from market pressures and key customer shifts, yet some analysts see a balanced risk-reward scenario for investors.

Future Lookout:

With solid finances and low debt, strategic shifts, and key product rollouts, Confluent is poised to weather market storms.

Holding a Zacks Rank #2 (Buy), the stock shows promise to outshine the broader market, aiming for a big market slice in regulated sectors, casting a hopeful gaze on its future trajectory.

Read the full update here

The Smattering Podcast and Investing Videos Cover of the update

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Confluent Stock Crashing 45%: Time to Get Greedy?

Looking for more great stock ideas? Visit https://fool.com/thesmatteringWorries about slowing growth have investors freaking out. Stocks discussed: CFLT, CR...

The Developer Tools Index

$741.1kFollowers

@developertoolsindex09/22/2023

Cisco Acquires Splunk ($SPLK) for $28 Billion, Marking the Year's Biggest Enterprise Software Deal

Cisco, a global leader in networking technology, shakes up the tech industry with its record-breaking $28 billion acquisition of Splunk.

Splunk is a Developer Tools Index company specializing in observability and monitoring.

The deal is a strategic move for Cisco to strengthen its security business and dive deeper into AI-driven solutions.

What you need to know?

The deal is priced at a premium of $157 per share.
The acquisition will bolster Cisco's security division with Splunk's observability platform.
Both companies aim to drive the next generation of AI-enabled security solutions.
The acquisition surpasses Silver Lake's $12.5 billion Qualtrics deal, making it the largest enterprise software acquisition of 2022.
The deal is set to close by the third quarter of next year, pending regulatory approval.

Analyst Ray Wang from Constellation Research endorsed the merger's potential for natural synergy in threat detection and AI-driven observability.

While the acquisition has already received approval from the boards of both companies, it will still need to pass regulatory scrutiny before becoming official.

https://investor.cisco.com/news/news-details/2023/Cisco-to-Acquire-Splunk-to-Help-Make-Organizations-More-Secure-and-Resilient-in-an-AI-Powered-World/default.aspx

investor.cisco.com

Cisco to Acquire Splunk, to Help Make Organizations More Secure and Resilient in an AI-Powered World

News Summary Together, Cisco and Splunk will help move organizations from threat detection and response to threat prediction and prevention Combined, Cisco and Splunk will become one of the world's largest software companies and will accelerate Cisco's business transformation to more recurring revenue Expected to be cash flow positive and gross margin accretive in first fiscal year post close, and non-GAAP EPS accretive in year 2. Will accelerate revenue growth and gross margin expansion Unites two "Great Places to Work" with similar values, strong cultures, and talented teams The combination of these two innovative leaders makes them well positioned to lead in security and observability in the age of AI Cisco (NASDAQ: CSCO) and Splunk (NASDAQ: SPLK), the cybersecurity and observability leader, today announced a definitive agreement under which Cisco intends to acquire Splunk for $157 per share in cash, representing approximately $28 billion in equity value. Upon close of the

The Developer Tools Index

$741.1kFollowers

@developertoolsindex09/14/2023

Cloudflare, The Edge, and The Future of Cloud Computing

In this post we are going to:

Unlock a specific trend in the developer tools world called Edge Computing.
Look at how it affects a specific index company - Cloudflare
Understand the business implications, technology perspective, and risk attached to it.

Most of you already know Cloudflare from their captcha verification system (“I am not a robot”). You’ve probably also seen screens like this before:

Cloudflare is a cloud service company that offers clients a specific cloud service called Content Delivery Service (CDN).

CDNs are like express lanes on the internet highway.

They ensure that the digital content (a website, video, or game) you're trying to access reaches you in the fastest and most secure way possible.

Imagine a worldwide network of speedy couriers, each holding a copy of a website's content. When you want to visit that site, the closest courier rushes over to deliver it to your screen. Cloudflare is one of the maestros conducting this digital symphony.

It may sound simple, but a kind of high-tech magic show is going on behind the scenes. To make this a reality at the internet’s current scale, Cloudflare operates roughly 300 data centers in over 100 countries.

Alongside the CDN service, Cloudflare offers many other benefits. These range from security features like DDoS protection and Web Application Firewalls to developer-centric services like load balancing and serverless computing.

The Developer Tools Index

$741.1kFollowers

@developertoolsindex09/11/2023

Should you look into Snowflake $SNOW?

Hello everyone and a happy Monday!

Today, we're taking a quick look at Snowflake. For those unfamiliar, Snowflake is a cloud-based data warehouse company targeting enterprises.

There's a lot happening with Snowflake, and we're here to unfold it for you.

Snowflake is catching the attention of analysts, investors, and industry experts alike.

Just recently:

They announced their Q2 '23 Performance
DA Davidson initiated coverage on Snowflake with a Buy recommendation.
Snowflake was mentioned by Jim Cramer (so maybe reconsider?)

First, some AI background

You might be aware that the current buzz in technology is AI, specifically generative AI.

Snowflake is primed to capitalize on the AI trend, with the company recently sharing their AI vision.

Snowflake has recently adopted large language models (LLMs) to optimize data extraction and interaction. Through Snowpark Container Services, they offer direct access to leading LLMs like AI21 Labs and NVIDIA's NeMo framework.

Their recent integration with Streamlit marks a significant step in enhancing the user experience. Recognized for creating interactive applications with Python, Streamlit is a favorite for building UIs for LLM-powered apps.

With over 7,000 LLM-driven Streamlit apps already in the Community Cloud, Snowflake users can now benefit from enhanced governance.

The combined prowess of container services and Streamlit means efficient UI creation for LLM apps, bolstering Snowflake's data platform.

Snowflake has also acquired two companies lately which are involved in the AI space: Applica and Neeva.

Q2 '23 Performance

As the second quarter of 2023 comes to a close, Snowflake's financials provide a clear window into the company's health and trajectory. Here's a breakdown:

Product Revenue Growth: 78% YoY, underscoring the company's swift growth.
Net Revenue Retention: 142%, a testament to robust customer loyalty.
$1M+ Product Revenue Customers: A total of 402, up from 374 in Q1 '23 and 248 in Q2 '22, marking a 62% YoY growth.

"This was a strong renewal quarter, with our largest customer renewing under existing terms," stated Snowflake CFO, Michael Scarpelli.

D.A Davidson Initiates Coverage on Snowflake

The recent performance might have influenced D.A Davidson to initiate coverage on Snowflake.

They highlighted Snowflake's "best-in-class growth rates" and its potential to benefit from the rising demand for AI. D.A Davidson predicts a 26.97% upside, setting a one-year price target at $202.95 as of August 31, 2023.

Lastly, Jim Cramer shared insights on Snowflake in his daily segment and advised keeping an eye on it.

Snowflake's recent developments, from its AI innovations to its robust Q2 performance, paint a promising picture. We will keep an eye on Snowflake's adaptability and how it leverages its partnerships, especially with tech giants like Microsoft. The upcoming quarters will be a litmus test for Snowflake's strategies and their execution.

$SNOW will be over $180/share on 2023-09-18?

Will expire in expired

0% AgreedDisagreed 100%

11 Votes

The Developer Tools Index

$741.1kFollowers

@developertoolsindex09/04/2023

Elastic N.V Up by almost 20% after Q2 Performance Update

Happy Monday, investors of Commonstock, and welcome to all the new followers; we are grateful to have you with us! 🚀

Today we are looking at a stock that does more than just impress on paper.

Read Elastic's Official Update

Earnings Snapshot

Elastic N.V., the real-time search database titan, posted a robust Q1 for Fiscal 2024.

Highlights? A 17% YoY total revenue increase to $294 million, with Elastic Cloud revenue scaling up by 24% YoY to hit $121 million.

What's exactly Elastic N.V do?

Elastic N.V. develops search and analytic solutions, primarily known for their Elastic Stack which includes Elasticsearch, Logstash, Kibana, and Beats.

Developers utilize the Elastic Stack (or ELK Stack) for a range of functions, from centralized logging and full-text search to performance monitoring and data visualization. Its versatility supports diverse applications, from business analytics to geospatial data analysis.

Read more about Elastic

Operating Overview

While Elastic reported a GAAP operating loss of $36 million, non-GAAP operations painted a brighter picture with a $29 million income and a 10% margin. Elastic's cash flow? Optimistic and impressive at $38 million.

Customer Growth

Elastic's expansion is evident with its rising customer count, now at approximately 20,500,

compared to approximately 20,200 in Q4 FY23, and over 19,300 in Q1 FY23.

1,190 of Elastic customers have anACV greater than $100,000.

Product Innovations:

Elastic unveiled its AI Assistant, optimized search capabilities via Reciprocal Rank Fusion (RRF) technology, and integrated a new capability called Time Series Data Streams (TSDS), which can potentially cut storage needs for metrics data by up to 70%.

In the Words of the CEO:

"We had a strong start to the fiscal year... We are very excited about the long-term opportunity generative AI represents for Elastic," commented CEO Ash Kulkarni.

Elastic N.V. continues to solidify its place as a leader in the search and analytics sector.

Subscribe to The Developer Tools Index to get more updates like this

$ESTC will be over $78/share on 2023-10-04?

Will expire in expired

0% AgreedDisagreed 100%

3 Votes

Benjamin Tan

@consumeowntech09/05/2023

$ESTC sequential improvement on revenue is encouraging, but their pace of customer add is still somewhat tepid, even with the new product launches. I do see its platform approach to search, observability, and security as a plus. Elastic is under the radar, compared to many other SaaS stocks....

Add a comment…

The Developer Tools Index

$741.1kFollowers

@developertoolsindex08/26/2023

Index Performance Update

The Developer Tools Index is doing 33.15% YTD.

We use Thematic to follow the index performance

How do we select companies?

What qualifies a developer tools company is:

Core Business: The company's operations should primarily revolve around providing tools, platforms, or services intended for use by developers.

User Base: The company's product or service should primarily cater to software developers.

Impact on the Development Process: The company's product or service should significantly impact the software development process.

Market: The company's marketing efforts are targeting developers. The company's Go-To-Market and sales strategy focuses on developers and their personas.

A real-life example from previous Microsoft CEO, Steve Ballmer:

View the selection process, categories, and full list of companies here

The Developer Tools Index

$741.1kFollowers

@developertoolsindex08/26/2023

Ages of Founders of The Developer Tools Index 👩🏻‍💼

In the world of tech, age usually seems like just a number.

Mark Zuckerberg co-founded Facebook in his early 20s. Matthew Mullenweg co-founded the open-source blogging platform WordPress at the age of 19.

But is there a common perception that most tech companies are founded by entrepreneurs in their early 20s? How true is this assumption?

Today, we will delve into the ages of the founders of four publicly traded developer tools companies and see if the perception matches the reality.

Grab a cup of coffee, and let's dive in! ☕

Datadog

Olivier Pomel and Alexis Lê-Quôc founded Datadog ($DDOG) after both worked for Wireless Generation (now Amplify).

Olivier Pomel (46) born at 1977, and was 33 years old when founding Datadog. He worked as a VP of Technology at Wireless Generation prior to becoming Datadog CEO.

Alexis Lê-Quôc (48) was born in 1975 and was 35 at Datadog's inception.

He was the Director of Operations at Wireless Generation.

Snowflake

Snowflake ($SNOW), the cloud-based data warehousing company, was founded by Benoit Dageville, Thierry Cruanes, and Marcin Zukowski.

Dageville and Cruanes worked at Oracle as data architects and Marcin Zukowski co-founded Vectorwise.

Dageville (57) and Cruanes (56) were born in 1966 and 1967, respectively.

They founded Snowflake in 2012 while being in their late 40s.

MongoDB

MongoDB was founded by Dwight Merriman, Kevin P. Ryan, and Eliot Horowitz.

Dwight Merriman and Kevin P. Ryan previously co-founded DoubleClick, a tech company that Google acquired. Dwight served as CTO, Kevin as CEO, and Eliot Horowitz worked as a Software Engineer.

Merriman (54), born in 1969, was 38; he founded MongoDB. Ryan born (59), born in 1963, was 44.

Eliot Horowitz (42) is the younger one on the team, born in 1981, and was 26 when he founded MongoDB.

Twilio

Twilio, the cloud communications platform that allows software developers to programmatically make and receive phone calls, send and receive text messages, and perform other communication functions using its web service APIs, was founded by Jeff Lawson, Evan Cooke, and John Wolthuis.

Before Twilio, Jeff Lawson (46) was a Founding CTO of StubHub, a Technical Product Manager at Amazon, and the CTO of Nine Star.

He was born in 1977 and was 31 at Twilio's inception.

---

While the tech world is often associated with young entrepreneurs, the reality is quite different.

A closer look at the founders of publicly traded developer tools companies reveals that, on average, founders are in their 40s when they create companies that eventually go public.

This dispels the common assumption that successful tech entrepreneurs are typically in their 20s.

In fact, innovation is not bound by age, as proven by the diverse ages of successful founders.

Whether you’re just starting out or are a seasoned professional, there’s always room for growth and innovation in technology.

Stay inspired and keep building!

The Developer Tools Index is a weekly newsletter about publicly traded developer tools companies. Subscribe to stay updated on the latest news, trends, and insights from the developer tools sector.

The Developer Tools Index

$741.1kFollowers

@developertoolsindex08/24/2023

Splunk ($SPLK) Up by 13% After an Impressive Q2

Splunk Inc (NASDAQ:$SPLK) witnessed a significant boost in its stock, surging nearly 13% following its impressive Q2 financial disclosures yesterday.

The software company surpassed earnings expectations and unveiled a slew of innovative advancements, underlining its focus on digital resilience and security.

Splunk, headquartered in San Francisco, is a leader in the monitoring & observability. Since its inception, it has equipped numerous businesses with the tools to turn machine data into actionable insights, with a particular emphasis on enhancing security infrastructure and monitoring system health.

Splunk's ability to narrow its loss from a substantial $209.7 million in the previous year to a more contained $63.2 million this year showcases its robust financial discipline and operational efficiency.

(The complete announcement)

Financial Highlights

Splunk reported Total ARR of $3.858 billion, a rise of 16% YoY.

The Q2 revenue was pegged at $911 million, with Cloud revenue marking an increase of 29%, reaching $445 million.

GAAP Operating Expenses decreased by 2% YoY, while the non-GAAP Operating Expenses showed a decline of 3% YoY.

Over twelve months, operating cash flow surged to $827 million, a whopping 247% YoY increase.

The same period also saw free cash flow grow by 273% YoY, at $805 million.

Customer Metrics

Splunk now boasts 834 customers with a total ARR exceeding $1 million, marking an increase of 111 customers YoY.
Highlighting its growth trajectory and market reach, Splunk also unveiled critical advancements in the quarter, intending to bolster customers’ digital resilience and security structures.

Recent Business Highlights

Splunk's Innovations at .conf23: Thousands attended Splunk’s annual user conference, including prominent brands like FedEx, Carnival, IKEA, and VMware. Key product announcements from the event were:
Splunk AI: A set of new AI-powered tools designed to bolster Splunk’s security and observability platform.
Strategic Partnership with Microsoft: Announced during .conf23, Splunk and Microsoft are joining forces to bolster Splunk’s security and observability solutions on Microsoft Azure. Additionally, Splunk's offerings will now be available on the Microsoft Azure Marketplace.
Recognitions and Achievements: Splunk was named a leader in the 2023 Gartner® Magic Quadrant™ for Application Performance Monitoring (APM) and Observability. This accolade followed Splunk's ninth consecutive recognition in the 2022 Gartner® Magic Quadrant™ for Security Information and Event Management.

Robert W. Baird analyst Shrenik Kothari maintained a Buy rating on Splunk after the call.

Splunk's commitment to driving innovation and impressive financial metrics underscores its positioning as an indispensable ally for businesses navigating the complex landscape of data analytics and cybersecurity.

markets.businessinsider.com

Robert W. Baird Keeps Their Buy Rating on Splunk (SPLK)

Robert W. Baird analyst Shrenik Kothari maintained a Buy rating on Splunk (SPLK – Research Report) today. The company’s shares close...

Closed Account

@jazziyoung08/24/2023

This is a business we've liked and watched for a long time now (about 5 years). It's a business that we'd be happy to hold for the long-term, but what has kept us back from pulling the trigger is our preference for GAAP profitable businesses, or at the very least wait until there's clear visibility that profitability is around the corner. Might be time to dust off our notes and update our fundamental analysis on his business. It must be getting near.

+ 1 comment

The Developer Tools Index

$741.1kFollowers

@developertoolsindex08/21/2023

What's New In The Developer Tools Market? ($NEWR, $VMW, $HCP)

Happy Monday everyone 💻

Today we'll cover recent developments from few index companies.

New Relic's Transitioning to Private

Going Private: New Relic, the all-in-one observability platform, has entered into a definitive agreement to be acquired by Francisco Partners and TPG for $6.5 billion. The move towards privatization comes alongside strong first-quarter results for fiscal year 2024.
In Q2 2023, Total revenue for the quarter reached $242.6 million, up 12% YOY with consumption revenue rising 39%. Gross margins improved significantly to 77.6% from 70.5% the previous year, with non-GAAP gross margin at 79.4%.
Operational Shift: The company reported a decrease in the loss from operations to $(33.0) million from $(55.7) million and saw a non-GAAP operating income of $36.4 million. The transformation is also marked by an enhancement in operating margins and growth in free cash flow.
New Relic withdrawn of fiscal 2024 guidance due to the pending transaction.

Broadcom's Acquiring VMware's

Acquisition Approval: Broadcom, a global manufacturer of hardware components for computer servers, has received clearance to acquire VMware. The deal, scrutinized by the UK's Competition and Markets Authority (CMA), has been valued at $69 billion and raises no concerns regarding competition or innovation in the UK market.
VMware is a leader in server virtualization technology, VMware creates software that enhances server efficiency.
Why This Acquisition? The merger aligns with Broadcom's hardware expertise, promising to innovate and provide complete solutions in the industry.
Q1 Performance: VMware's first quarter of fiscal 2024 showcased total revenue of $3.28 billion, a 6% increase from the previous year. Subscription and SaaS revenue saw a remarkable 35% year-over-year growth.

Read more on VMware's acquisition on Barron's.

HashiCorp's State of Cloud Survey

Boosting Cloud Spending: HashiCorp's State of Cloud Strategy Survey 2023 shows that 48% of tech industry respondents have increased their cloud spending despite worldwide macroeconomic uncertainty.
Platform Teams are Pivotal: A standout observation is that 91% of tech firms rely on centralized platform teams to enable cloud adoption and operation. This reflects a major organizational approach and offers efficiency, standardization, security, and improved collaboration.
Challenges and Opportunities: The survey also sheds light on barriers such as compliance and risk management (29%), skills shortages (28%), and team silos. However, the benefits of uptime, infrastructure scaling, budget considerations, and security highlight the transformative potential of multi-cloud in the tech industry.

Read the full survey result: https://www.hashicorp.com/blog/hashicorp-state-of-cloud-strategy-survey-2023-the-tech-sector-perspective

HashiCorp

HashiCorp State of Cloud Strategy Survey 2023: The tech sector perspective

Technology firms are using multi-cloud to improve their business outcomes in many ways, from boosting reliability to dealing with skills shortages.