The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Atlassian (NASDAQ:TEAM) and the rest of the productivity software stocks fared in Q1.
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 12 productivity software stocks we track reported a slower Q1; on average, revenues beat analyst consensus estimates by 1.5%. while next quarter's revenue guidance was in line with consensus. Valuation multiples for many growth stocks have not yet reverted to their early 2021 highs, but the market was optimistic at the end of 2023 due to cooling inflation. The start of 2024 has been a different story as mixed signals have led to market volatility, and productivity software stocks have held roughly steady amidst all this, with share prices up 0.4% on average since the previous earnings results.
Best Q1: Atlassian (NASDAQ:TEAM)
Founded by Australian co-CEOs Mike Cannon-Brookes and Scott Farquhar in 2002, Atlassian (NASDAQ:TEAM) provides software as a service that makes it easier for large teams of software developers to manage projects, especially in software development.
Atlassian reported revenues of $1.19 billion, up 29.9% year on year, topping analysts' expectations by 8.1%. It was a very strong quarter for the company, with an impressive beat of analysts' billings estimates.
“It’s been a milestone quarter for Atlassian,” said Mike Cannon-Brookes, co-founder and co-CEO.
Atlassian pulled off the biggest analyst estimates beat of the whole group. The stock is down 14.9% since the results and currently trades at $169.
We think Atlassian is a good business, but is it a buy today? Read our full report here, it's free.
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 $216.9 million, up 33.7% year on year, outperforming analysts' expectations by 3%. It was a strong quarter for the company, with a solid beat of analysts' ARR (annual recurring revenue) estimates and a decent beat of analysts' billings estimates.
Monday.com achieved the fastest revenue growth and highest full-year guidance raise among its peers. The company added 196 enterprise customers paying more than $50,000 annually to reach a total of 2,491. The stock is up 34.2% since the results and currently trades at $243.66.
Is now the time to buy Monday.com? Access our full analysis of the earnings results here, it's free.
Weakest Q1: 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 $330.1 million, up 1.4% year on year, falling short of analysts' expectations by 2.1%. It was a weak quarter for the company, with a miss of analysts' revenue estimates and a decline in its gross margin.
Pegasystems had the weakest performance against analyst estimates in the group. The stock is up 1.1% since the results and currently trades at $59.5.
Read our full analysis of Pegasystems's results here.
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, and offer more tailored customer support.
Five9 reported revenues of $247 million, up 13.1% year on year, surpassing analysts' expectations by 2.9%. It was a weaker quarter for the company, with underwhelming revenue guidance for the next quarter.
The stock is down 13.5% since the results and currently trades at $49.
Read our full, actionable report on Five9 here, it's free.
Appian (NASDAQ:APPN)
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 $149.8 million, up 10.8% year on year, in line with analysts' expectations. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and a miss of analysts' billings estimates.
The stock is down 18.6% since the results and currently trades at $29.89.
Read our full, actionable report on Appian here, it's free.
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