Reflecting On Data Storage Stocks’ Q2 Earnings: Snowflake (NYSE:SNOW)

As the Q2 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the data storage industry, including Snowflake (NYSE:SNOW) and its peers.

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 satisfactory Q2. As a group, revenues beat analysts’ consensus estimates by 2.5% while next quarter’s revenue guidance was 1.3% above.

Stocks, especially growth stocks with cash flows further into the future, had a good end of 2023. On the other hand, this year has seen more volatile stock market swings due to mixed inflation data. Thankfully, data storage stocks have been resilient with share prices up 6.8% on average since the latest earnings results.

Weakest Q2: 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 $868.8 million, up 28.9% year on year. This print exceeded analysts’ expectations by 2.1%. Despite the top-line beat, it was still a slower quarter for the company with a miss of analysts’ billings estimates.

"Snowflake delivered another strong quarter, surpassing the high end of our Q2 product revenue guidance and, as a result, we're raising our product revenue guidance for the year," said Sridhar Ramaswamy, CEO of Snowflake.

Snowflake scored the fastest revenue growth of the whole group. The company added 25 enterprise customers paying more than $1m annually to reach a total of 510. Even though it had a great quarter relative to its peers, the market seems discontent with the results. The stock is down 20.2% since reporting and currently trades at $148.26.

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

Best Q2: 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 $224.7 million, up 13.4% year on year, outperforming analysts’ expectations by 4.2%. The business had a very strong quarter with an impressive beat of analysts’ billings estimates and a solid beat of analysts’ ARR (annual recurring revenue) estimates.

Commvault Systems pulled off the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 20.2% since reporting. It currently trades at $148.26.

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 $51.59 million, up 19.6% year on year, in line with analysts’ expectations. It was a slower quarter as it posted a miss of analysts’ billings estimates and a decline in its gross margin.

Couchbase delivered the weakest performance against analyst estimates and weakest full-year guidance update in the group. As expected, the stock is down 26.3% since the results and currently trades at $13.99.

Read our full analysis of Couchbase’s results here.

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 $192.5 million, up 13.3% year on year. This result beat analysts’ expectations by 2%. Overall, it was a strong quarter as it also put up a solid beat of analysts’ ARR (annual recurring revenue) and billings estimates.

The stock is up 40.8% since reporting and currently trades at $40.97.

Read our full, actionable report on DigitalOcean 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 $478.1 million, up 12.8% year on year. This result beat analysts’ expectations by 3%. Overall, it was a strong quarter as it also produced an impressive beat of analysts’ billings estimates and optimistic revenue guidance for the next quarter.

MongoDB scored the highest full-year guidance raise but had the slowest revenue growth among its peers. The company added 52 enterprise customers paying more than $100,000 annually to reach a total of 2,189. The stock is up 16.5% since reporting and currently trades at $286.50.

Read our full, actionable report on MongoDB here, it’s free.

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