As productivity software stocks’ Q2 earnings season wraps, let's dig into this quarter’s best and worst performers, including Dropbox (NASDAQ:DBX) 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 16 productivity software stocks we track reported a mixed Q2; on average, revenues beat analyst consensus estimates by 2.6%, while on average next quarter revenue guidance was 0.56% under consensus. Tech stocks have been hit the hardest as investors start to value profits over growth and productivity software stocks have not been spared, with share price down 10.7% since the previous earnings results, on average.
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 $572.7 million, up 7.93% year on year, in line with analyst expectations. It was a mixed quarter for the company, with a meaningful improvement in gross margin but a slow revenue growth.
"Our Q2 results are a testament to the strength of our business and the value our product delivers to our customers, despite the unpredictable macro environment," said Dropbox Co-Founder and Chief Executive Officer Drew Houston.
The stock is down 15.2% since the results and currently trades at $20.32.
Best Q2: monday.com (NASDAQ:MNDY)
Founded in Israel in 2014, and named after the dreaded first day of the work week, Monday.com (NASDAQ:MNDY) makes software as a service platforms that helps teams plan and track work efficiently.
monday.com reported revenues of $123.7 million, up 75.2% year on year, beating analyst expectations by 4.65%. It was a strong quarter for the company, with an exceptional revenue growth and a very optimistic guidance for the next quarter.
monday.com achieved the fastest revenue growth among its peers. The company added 200 enterprise customers paying more than $50,000 annually to a total of 1,160. The stock is down 2.33% since the results and currently trades at $124.89.
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Weakest Q2: Zoom Video (NASDAQ:ZM)
Started by Eric Yuan who once ran engineering for Cisco’s video conferencing business, Zoom (NASDAQ:ZM) offers an easy to use, cloud-based platform for video conferencing, audio conferencing and screen sharing.
Zoom Video reported revenues of $1.09 billion, up 7.63% year on year, missing analyst expectations by 1.57%. It was a weak quarter for the company, with revenue guidance for both the next quarter and the full year missing analysts' expectations.
Zoom Video had the weakest performance against analyst estimates and slowest revenue growth in the group. The company added 200 enterprise customers paying more than $100,000 annually to a total of 3,116. The stock is down 23.4% since the results and currently trades at $74.65.
Founded by Matt Calkins and his three friends out of an apartment in Northern Virginia, Appian (NASDAQ:APPN) sells a software platform that lets its users build applications without using much code, allowing them to create new software more quickly.
Appian reported revenues of $110 million, up 32.6% year on year, beating analyst expectations by 5.85%. It was a decent quarter for the company, with a solid beat of analyst estimates but a decline in gross margin.
Appian achieved the highest full year guidance raise among the peers. The stock is down 20.4% since the results and currently trades at $44.10.
Founded in 1999 during the dot-com era, RingCentral (NYSE:RNG) provides software as a service that unifies phone, text, fax, video calls and chat in one platform.
RingCentral reported revenues of $486.8 million, up 28.3% year on year, beating analyst expectations by 1.59%. It was a slower quarter for the company, with revenue guidance for both the next quarter and full year missing analysts' expectations.
The stock is down 16.1% since the results and currently trades at $41.66.
The author has no position in any of the stocks mentioned