Let’s dig into the relative performance of Dropbox (NASDAQ: DBX) and its peers as we unravel the now-completed Q3 productivity software earnings season.

Rising employee costs and the shift to more remote work has increased the ever-present pressure to improve corporate productivity, which in turn has driven rising demand for productivity software that enables remote work, streamline project management and automate business tasks.

The 17 productivity software stocks we track reported a satisfactory Q3. As a group, revenues beat analysts’ consensus estimates by 1.4% while next quarter’s revenue guidance was in line.

In light of this news, share prices of the companies have held steady as they are up 4% on average since the latest earnings results.

Dropbox (NASDAQ: DBX)

Founded by the long-serving CEO Drew Houston and Arash Ferdowsi in 2007, Dropbox (NASDAQ: DBX) provides a file hosting cloud platform that helps organizations collaborate and share documents.

Dropbox reported revenues of $638.8 million, flat year on year. This print was in line with analysts’ expectations, but overall, it was a slower quarter for the company with decelerating customer growth and a miss of analysts’ billings estimates.

“As we've shared over the last year, we're in a transitional period as a company and we continue to face a challenging environment in 2024. We recently announced a reduction in our workforce to both increase efficiency in and strengthen our core business, and accelerate growth in our new bets, like Dropbox Dash,” said Dropbox Co-Founder and Chief Executive Officer Drew Houston.

Interestingly, the stock is up 7.7% since reporting and currently trades at $30.03.

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

Best Q3: Five9 (NASDAQ: FIVN)

Started in 2001, Five9 (NASDAQ: FIVN) offers software-as-a-service that makes it easier for companies to set up and efficiently run call centers to offer more tailored customer support.

Five9 reported revenues of $264.2 million, up 14.8% year on year, outperforming analysts’ expectations by 3.6%. The business had a very strong quarter with a solid beat of analysts’ EBITDA estimates and full-year EPS guidance exceeding analysts’ expectations.

Five9 pulled off the biggest analyst estimates beat and highest full-year guidance raise among its peers. The market seems happy with the results as the stock is up 19.6% since reporting. It currently trades at $39.25.

Is now the time to buy Five9? Access our full analysis of the earnings results here, it’s free.

Slowest Q3: Pegasystems (NASDAQ: PEGA)

Founded by Alan Trefler in 1983, Pegasystems (NASDAQ: PEGA) offers a software-as-a-service platform to automate and optimize workflows in customer service and engagement.

Pegasystems reported revenues of $325.1 million, down 2.9% year on year, falling short of analysts’ expectations by 0.8%. It was a disappointing quarter as it posted a significant miss of analysts’ EBITDA and billings estimates.

Pegasystems delivered the weakest performance against analyst estimates and slowest revenue growth in the group. Interestingly, the stock is up 34.3% since the results and currently trades at $93.65.

Read our full analysis of Pegasystems’s results here.

DocuSign (NASDAQ: DOCU)

Founded by Seattle-based entrepreneur Tom Gonser, DocuSign (NASDAQ: DOCU) is the pioneer of e-signature and offers software as a service that allows people and organisations to sign legally binding documents electronically.

DocuSign reported revenues of $754.8 million, up 7.8% year on year. This number beat analysts’ expectations by 1.3%. It was a strong quarter as it also recorded an impressive beat of analysts’ billings estimates and a decent beat of analysts’ EBITDA estimates.

The stock is up 5.5% since reporting and currently trades at $88.26.

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

Monday.com (NASDAQ: MNDY)

Founded in 2014 and named after the dreaded first day of the work week, Monday.com (NASDAQ: MNDY) is a software-as-a-service platform that helps organizations plan and track work efficiently.

Monday.com reported revenues of $251 million, up 32.7% year on year. This result topped analysts’ expectations by 1.9%. Overall, it was a strong quarter as it also logged an impressive beat of analysts’ EBITDA estimates and a narrow beat of analysts’ annual recurring revenue estimates.

Monday.com achieved the fastest revenue growth among its peers. The company added 194 enterprise customers paying more than $50,000 annually to reach a total of 2,907. The stock is down 30.7% since reporting and currently trades at $225.

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

Market Update

Thanks to the Fed's series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market has thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% each in November and December), and a notable surge followed Donald Trump's presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by the pace and magnitude of future rate cuts as well as potential changes in trade policy and corporate taxes once the Trump administration takes over. The path forward is marked by uncertainty.

Want to invest in winners with rock-solid fundamentals? Check out our Hidden Gem Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

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