Daily Pulse · · 13:00 CET · 5 min read · market
In this edition
Pattern alerts
- NET q4-guide-845m-vs-798m-up-19-percent-pre-market BULLISH
- FROG year-outlook-raised-up-23-percent-pre-market BULLISH
- DDOG flat-q4-guide-19-percent-under-pre-report-close BEARISH
- DT profit-outlook-miss-under-sold-line-into-grade BEARISH
On Thursday the S&P 500 fell 4.4% and chip stocks lost 12%. After the bell, two software companies that charge customers by how much they use reported, and both are set to open sharply higher. By 11:45 UTC on Friday Cloudflare traded at 291.80 before the open, 19.0% above Thursday's close of 245.18 and higher than the 14% it reached last night. JFrog traded at 91.80, up 23.0%. They are two of the five names on our show-me watchlist for usage-priced software, the companies where the spread of AI agents should show up in revenue first. The other three reported earlier in the week and are each about 19% lower. All five beat estimates on both lines. What separated them was the outlook.
Five beats, two raises — a 40-point gap
The five reported within four days. Dynatrace and DigitalOcean came on Tuesday before the open, Datadog on Wednesday before the open, Cloudflare and JFrog on Thursday after the close. Every one beat the consensus for earnings per share and for revenue. The two that rose gave outlooks well above what analysts expected; the three that fell did not.
Table as text
| Company | Reported | EPS vs est. | Revenue vs est. | Outlook | Last close before report | 11:45 UTC Friday | Change |
|---|---|---|---|---|---|---|---|
| JFrog | Thu 5 Nov, after close | $0.32 vs $0.23 | $179.2M vs $165.9M | Year revenue raised to $680–682M vs $651.9M expected | 74.62 | 91.80 | +23.0% |
| Cloudflare | Thu 5 Nov, after close | $0.38 vs $0.34 | $782.5M vs $737.2M | Q4 revenue $845–846M vs $798M expected | 245.18 | 291.80 | +19.0% |
| Datadog | Wed 4 Nov, before open | $0.81 vs $0.64 | $1.20B vs $1.15B | Q4 revenue $1.19–1.20B, no higher than Q3 | 220.52 | 178.51 | −19.1% |
| DigitalOcean | Tue 3 Nov, before open | $0.45 vs $0.32 | $321.2M vs $306.7M | Growth accelerated to 40% | 89.79 | 73.00 | −18.7% |
| Dynatrace | Tue 3 Nov, before open | $0.54 vs $0.49 | $579.9M vs $568.0M | Profit outlook under estimates after an acquisition | 55.13 | 44.26 | −19.7% |
Estimates and actuals: FMP; outlooks: CNBC, Yahoo Finance, Investor's Business Daily, company releases. Prices: Yahoo Finance and FMP, Friday pre-market.
The windows are not the same length. The three that fell carry Thursday's sell-off in their numbers; the two that rose reported after it. Thursday took 4.4% off the software ETF IGV, so the market explains part of the fall, not the 40 points between the groups.
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