Looking back on productivity software stocks’ Q2 earnings, we examine this quarter’s best and worst performers, including Asana (NYSE: ASAN) and its peers.
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 very strong Q2. As a group, revenues beat analysts’ consensus estimates by 4.7% while next quarter’s revenue guidance was in line.
Luckily, productivity software stocks have performed well with share prices up 12.1% on average since the latest earnings results.
Asana (NYSE: ASAN)
Born from the founders' frustration with the inefficiencies of email-based collaboration at Facebook, Asana (NYSE: ASAN) provides a work management platform that helps organizations track projects, set goals, and manage workflows in a centralized digital workspace.
Asana reported revenues of $196.9 million, up 9.9% year on year. This print exceeded analysts’ expectations by 2%. Overall, it was a very strong quarter for the company with EPS guidance for next quarter exceeding analysts’ expectations and a solid beat of analysts’ EBITDA estimates.
Interestingly, the stock is up 3.2% since reporting and currently trades at $14.70.
Is now the time to buy Asana? Access our full analysis of the earnings results here, it’s free for active Edge members.
Best Q2: SoundHound AI (NASDAQ: SOUN)
Born from the idea that machines should understand human speech as naturally as people do, SoundHound AI (NASDAQ: SOUN) develops voice recognition and conversational intelligence technology that enables businesses to integrate voice assistants into their products and services.
SoundHound AI reported revenues of $42.68 million, up 217% year on year, outperforming analysts’ expectations by 31.2%. The business had an incredible quarter with a solid beat of analysts’ billings estimates and an impressive beat of analysts’ EBITDA estimates.
SoundHound AI delivered the biggest analyst estimates beat and fastest revenue growth among its peers. The market seems happy with the results as the stock is up 68.2% since reporting. It currently trades at $18.08.
Is now the time to buy SoundHound AI? Access our full analysis of the earnings results here, it’s free for active Edge members.
Weakest Q2: 8x8 (NASDAQ: EGHT)
Named after its founding year (1987) with "8x8" representing binary code for communications, 8x8 (NASDAQ: EGHT) provides cloud-based contact center and unified communications solutions that enable businesses to manage customer interactions and internal communications through a single platform.
8x8 reported revenues of $181.4 million, up 1.8% year on year, exceeding analysts’ expectations by 2.2%. Still, it was a slower quarter as it posted revenue guidance for next quarter slightly missing analysts’ expectations and a significant miss of analysts’ EBITDA estimates.
The stock is flat since the results and currently trades at $1.93.
Read our full analysis of 8x8’s results here.
Pegasystems (NASDAQ: PEGA)
With a "Center-out Business Architecture" approach that transcends organizational silos, Pegasystems (NASDAQ: PEGA) develops software that helps organizations automate workflows and use artificial intelligence to improve customer experiences and business processes.
Pegasystems reported revenues of $381.4 million, up 17.3% year on year. This number surpassed analysts’ expectations by 8.5%. Overall, it was a stunning quarter as it also logged an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ revenue estimates.
The stock is up 13.1% since reporting and currently trades at $64.52.
Read our full, actionable report on Pegasystems here, it’s free for active Edge members.
UiPath (NYSE: PATH)
Starting with robotic process automation (RPA) and evolving into a comprehensive automation powerhouse, UiPath (NYSE: PATH) provides an AI-powered business automation platform that enables organizations to create software robots that mimic human actions to streamline repetitive tasks and processes.
UiPath reported revenues of $361.7 million, up 14.4% year on year. This print beat analysts’ expectations by 4.1%. Taking a step back, it was a satisfactory quarter as it also produced a solid beat of analysts’ EBITDA estimates but a significant miss of analysts’ billings estimates.
The stock is up 50.6% since reporting and currently trades at $16.30.
Read our full, actionable report on UiPath here, it’s free for active Edge members.
Market Update
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
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