Wrapping up Q3 earnings, we look at the numbers and key takeaways for the productivity software stocks, including Atlassian (NASDAQ: TEAM) 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 6 productivity software stocks we track reported a strong Q3. As a group, revenues beat analysts’ consensus estimates by 3.1% while next quarter’s revenue guidance was 1.5% below.

In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.

Atlassian (NASDAQ: TEAM)

Started by two Australian university friends who funded their startup with credit cards, Atlassian (NASDAQ: TEAM) provides software tools that help teams plan, track, collaborate, and share knowledge across organizations.

Atlassian reported revenues of $1.43 billion, up 20.6% year on year. This print exceeded analysts’ expectations by 2.2%. Despite the top-line beat, it was still a slower quarter for the company with full-year revenue guidance missing analysts’ expectations significantly and a significant miss of analysts’ billings estimates.

“Our relentless pace of AI innovation is driving results as we grew Cloud revenue in Q1 to $998 million, up 26% year-over-year, and surpassed 3.5 million monthly active users of our AI capabilities, up 50% quarter-over-quarter,” said Mike Cannon-Brookes, Atlassian’s CEO and co-Founder.

Atlassian delivered the weakest full-year guidance update of the whole group. Interestingly, the stock is up 1.4% since reporting and currently trades at $163.

Is now the time to buy Atlassian? Access our full analysis of the earnings results here, it’s free for active Edge members.

Best Q3: 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, outperforming analysts’ expectations by 8.5%. The business had a stunning quarter with a solid beat of analysts’ billings estimates and an impressive beat of analysts’ EBITDA estimates.

Pegasystems achieved the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 6.2% since reporting. It currently trades at $60.60.

Is now the time to buy Pegasystems? Access our full analysis of the earnings results here, it’s free for active Edge members.

RingCentral (NYSE: RNG)

Built on its proprietary Message Video Phone (MVP) platform that unifies multiple communication methods, RingCentral (NYSE: RNG) provides AI-driven cloud communications and collaboration solutions that enable businesses to connect through voice, video, messaging, and contact center services.

RingCentral reported revenues of $638.7 million, up 4.9% year on year, in line with analysts’ expectations. It was a slower quarter as it posted revenue guidance for next quarter missing analysts’ expectations significantly and billings in line with analysts’ estimates.

RingCentral delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 8.5% since the results and currently trades at $27.37.

Read our full analysis of RingCentral’s results here.

Microsoft (NASDAQ: MSFT)

Originally named "Micro-soft" for microcomputer software when founded in 1975, Microsoft (NASDAQ: MSFT) is a global technology company that develops software, cloud services, devices, and AI solutions for consumers, businesses, and organizations worldwide.

Microsoft reported revenues of $77.67 billion, up 18.4% year on year. This result surpassed analysts’ expectations by 2.9%. It was a very strong quarter as it also produced a solid beat of analysts’ revenue estimates and an impressive beat of analysts’ operating income estimates.

The stock is down 5.5% since reporting and currently trades at $512.58.

Read our full, actionable report on Microsoft here, it’s free for active Edge members.

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 $184.1 million, up 1.7% year on year. This print beat analysts’ expectations by 3.1%. Overall, it was a very strong quarter as it also put up an impressive beat of analysts’ billings estimates and a solid beat of analysts’ EBITDA estimates.

8x8 delivered the highest full-year guidance raise but had the slowest revenue growth among its peers. The stock is up 10.1% since reporting and currently trades at $1.96.

Read our full, actionable report on 8x8 here, it’s free for active Edge members.

Market Update

The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.

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