As we reflect back on the just completed Q2 productivity software sector earnings season, we dig into the relative performance of DocuSign (NASDAQ:DOCU) 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 weaker Q2; on average, revenues beat analyst consensus estimates by 1.3%, while on average next quarter revenue guidance was 0.59% under consensus. There has been a stampede out of high valuation technology stocks as raising interest rates encourage investors to value profits over growth again and while some of the productivity software stocks have fared somewhat better than others, they have not been spared, with share prices declining 9.03% since the previous earnings results, on average.
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 $687.7 million, up 10.5% year on year, beating analyst expectations by 1.52%. It was a decent quarter for the company, with revenue and EPS topping analysts' expectations.
"Our results for the first half were solid and reflect strong progress on our business transformation," said Allan Thygesen, CEO of DocuSign.
The stock is down 15.9% since the results and currently trades at $43.88.Is now the time to buy DocuSign? Read our full report on DocuSign here.
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 $175.7 million, up 42% year on year, beating analyst expectations by 3.77%. It was a strong quarter for the company, with next quarter and full-year revenue and adjusted operating profit guidance coming in higher than Wall Street's estimates.
Monday.com achieved the strongest analyst estimates beat, fastest revenue growth, and highest full year guidance raise among its peers. The company added 209 enterprise customers paying more than $50,000 annually to a total of 1,892. The stock is up 3.39% since the results and currently trades at $161.
Is now the time to buy Monday.com? Access our full analysis of the earnings results here, it's free.
Weakest Q2: 8x8 (NYSE:EGHT)
Founded in 1987, 8x8 (NYSE:EGHT) provides software for organizations to efficiently communicate and collaborate with their customers, employees, and partners.
8x8 reported revenues of $183.3 million, down 2.31% year on year, missing analyst expectations by 2.04%. It was a weak quarter for the company, with full-year revenue guidance missing analysts' expectations and underwhelming revenue guidance for the next quarter.
8x8 had the slowest revenue growth and weakest full year guidance update in the group. The stock is down 39.7% since the results and currently trades at $2.54.
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 $127.7 million, up 16% year on year, beating analyst expectations by 3.15%. It was a mixed quarter for the company, with a decent beat of analysts' revenue estimates but a decline in its gross margin.
The stock is down 4.13% since the results and currently trades at $46.2.
Founded by Fred Luddy who wrote the code for the initial prototype on a single flight from San Francisco to London, ServiceNow (NYSE:NOW) offers software as a service platform that helps companies become more efficient by allowing them to automate workflows across IT, HR and Customer Service.
ServiceNow reported revenues of $2.15 billion, up 22.7% year on year, in line with analyst expectations. It was a mixed quarter for the company, with a slight beat on revenue and a beat on non-GAAP operating income. Guidance for Q3 and full year subscription revenue was also ahead. However, cRPO (current remaining performance obligations, a leading indicator of revenue) guidance for the next quarter of 21.5% year-on-year growth excluding currency impacts, was slightly below expectations of 22+%. Additionally, gross margin declined and missed expectations.
The company added 42 enterprise customers paying more than $1m annually to a total of 1,724. The stock is up 0.38% since the results and currently trades at $579.94.
The author has no position in any of the stocks mentioned