What happened: Software stocks declined on Thursday as shares of Datadog (DDOG), Figma (FIG), and HubSpot (HUBS) plummeted more than 15% following their quarterly results.
Shares of software peers Salesforce (CRM) and ServiceNow (NOW ) also dropped, along with Workday (WDY) and Cloudflare (NET).
What's behind the move: The software sector has been attempting a rebound since April lows as investors worry that AI will disrupt industry business models. They are therefore viewing earnings with high scrutiny. Datadog's quarterly results beat on the top and bottom line, but the company's adjusted gross margin of 80% came in slightly below the ***** ysts' consensus estimate of 80.7%.
Meanwhile, Figma's quarterly results also beat on the top and bottom lines, but the software design and collaboration company flagged rising AI inference spending, or the ongoing cost of running user prompts through AI models.
"We do not charge our customers for their usage of products that are currently in beta, and we bear the cost of inference without offsetting consumption revenue," Figma CFO Praveer Melwani said during the company's earnings call. "As a result, gross margin will vary from quarter-to-quarter in the near term."
#quarterly #figma #shares #gross
Shares of software peers Salesforce (CRM) and ServiceNow (NOW ) also dropped, along with Workday (WDY) and Cloudflare (NET).
What's behind the move: The software sector has been attempting a rebound since April lows as investors worry that AI will disrupt industry business models. They are therefore viewing earnings with high scrutiny. Datadog's quarterly results beat on the top and bottom line, but the company's adjusted gross margin of 80% came in slightly below the ***** ysts' consensus estimate of 80.7%.
Meanwhile, Figma's quarterly results also beat on the top and bottom lines, but the software design and collaboration company flagged rising AI inference spending, or the ongoing cost of running user prompts through AI models.
"We do not charge our customers for their usage of products that are currently in beta, and we bear the cost of inference without offsetting consumption revenue," Figma CFO Praveer Melwani said during the company's earnings call. "As a result, gross margin will vary from quarter-to-quarter in the near term."
#quarterly #figma #shares #gross
3 months ago
