Here’s why these software infrastructure stocks should not be missed

June 09, 2023 02:48 AM PDT | By Akanksha Vashisht
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  • Software infrastructure is a sub-sector of technology that has experienced a major boom over the past few years.
  • Zscaler, a cloud-based solutions provider, reported revenue growth of 46% year-over-year in Q3 of fiscal 2023.
  • MongoDB provides a document-oriented database and has reported total revenue of US$ 368.3 million in the April 2023 quarter.

The software infrastructure sub-sector has experienced a major boom over the past few years. The surge in this industry has been accelerated by the recent advancements seen in the Artificial Intelligence (AI) segment. Most companies in the software infrastructure industry provide solutions to businesses and corporations to help manage their operations.

Software infrastructure helps companies deploy company-wide solutions that can be used to smoothen workflow. Some common examples include cloud-based software, network management software as well as communication software.

These operational requirements by large corporations keep software infrastructure businesses afloat. With that, here are software infrastructure stocks that should not be missed amid the current software boom.

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Zscaler Inc. (NASDAQ: ZS)

Zscaler offers cloud-based solutions for data and device protection. This is achieved by converting traditionally appliance-based security functions into a cloud-based platform. The company provides Zscaler Internet Access and Zscaler Private Access as its primary products.

For Q3 of fiscal 2023, the company reported revenue growth of 46% year-over-year to US$ 418.8 million. The loss from operations was US$ 55.7 million or 13% of revenue in the three months ended April 30, 2023. At the same time, Zscaler reported 40% billings growth and 135% operating profit growth in Q3 ’23.

Image source: ©2023 Kalkine®; Data source: Company Reports

The reported earnings exceeded the company’s guidance from the previous quarter. The company expects revenue to be in the range of US$ 429 million to US$ 431 million in Q4 2023.

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MongoDB Inc. (NASDAQ: MDB)

The company provides a document-oriented database, and it offers license and subscription as a service for its NoSQL database. This database is compatible with major programming languages and can be used for various purposes.

For the quarter ended April 30, 2023, MongoDB reported total revenue of US$ 368.3 million, which was 29% higher on a year-on-year basis. Its subscription revenue for the quarter was US$ 354.7 million, which was 29% higher on a year-on-year basis.

Image source: ©2023 Kalkine®; Data source: Company Reports

Meanwhile, the net loss for the quarter was reported to be US$ 54.2 million, or US$ 0.77 per share. The company also reported cash, cash equivalent and short-term investment reserves of US$ 1.9 billion as of April 30, 2023. For the April 2023 quarter, MDB generated cash of US$ 53.7 million from operations, with a free cash flow of US$ 51.8 million.


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