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Spotting Winners: Upland (NASDAQ:UPLD) And Sales And Marketing Software Stocks In Q1


Petr Huřťák /
2024/07/03 5:32 am EDT

Looking back on sales and marketing software stocks' Q1 earnings, we examine this quarter's best and worst performers, including Upland (NASDAQ:UPLD) and its peers.

The Internet and the exploding amount of data have transformed how businesses interact with, market to, and transact with their customers. Personalization of offerings, e-commerce, targeted advertising and data-empowered sales teams are now table stakes for modern businesses, and sales and marketing software providers are becoming the tools of evolving customer interaction.

The 23 sales and marketing software stocks we track reported an ok Q1; on average, revenues beat analyst consensus estimates by 2.3%. 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 while some of the sales and marketing software stocks have fared somewhat better than others, they collectively declined, with share prices falling 0.1% on average since the previous earnings results.

Upland (NASDAQ:UPLD)

Founder Jack McDonald’s second software rollup, Upland Software (NASDAQ:UPLD) is a one stop shop for sales and marketing software, project management, HR, and contact center services for small and medium sized businesses.

Upland reported revenues of $70.74 million, down 8.2% year on year, topping analysts' expectations by 3.5%. It was an ok quarter for the company, with a significant improvement in its gross margin.

"In Q1, we beat our revenue and Adjusted EBITDA guidance midpoints," said Jack McDonald, Upland's chairman and chief executive officer.

Upland Total Revenue

The stock is up 31.2% since the results and currently trades at $2.65.

Is now the time to buy Upland? Access our full analysis of the earnings results here, it's free.

Best Q1: AppLovin (NASDAQ:APP)

Co-founded by Adam Foroughi, who was frustrated with not being able to find a good solution to market his own dating app, AppLovin (NASDAQ:APP) is both a mobile game studio and provider of marketing and monetization tools for mobile app developers.

AppLovin reported revenues of $1.06 billion, up 47.9% year on year, outperforming analysts' expectations by 8.6%. It was an exceptional quarter for the company: AppLovin blew past analysts' revenue and adjusted EBITDA expectations. Its revenue and adjusted EBITDA guidance for the next quarter both exceeded expectations by a convincing amount.

AppLovin Total Revenue

AppLovin scored the biggest analyst estimates beat and fastest revenue growth among its peers. The stock is up 13% since the results and currently trades at $83.69.

Is now the time to buy AppLovin? Access our full analysis of the earnings results here, it's free.

Weakest Q1: Sprout Social (NASDAQ:SPT)

Founded by Justyn Howard and Aaron Rankin in 2010, Sprout Social (NASDAQ:SPT) provides a software as a service platform that companies can use to schedule and respond to posts on major social media networks like Twitter, Facebook, Instagram, Youtube and LinkedIn.

Sprout Social reported revenues of $96.78 million, up 28.7% year on year, falling short of analysts' expectations by 0.5%. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and a miss of analysts' billings estimates.

Sprout Social had the weakest performance against analyst estimates and weakest full-year guidance update in the group. The company added 134 enterprise customers paying more than $10,000 annually to reach a total of 8,823. The stock is down 24.5% since the results and currently trades at $36.37.

Read our full analysis of Sprout Social's results here.

Braze (NASDAQ:BRZE)

Founded in 2011 after the co-founders met at NYC Disrupt Hackathon, Braze (NASDAQ:BRZE) is a customer engagement software platform that allows brands to connect with customers through data-driven and contextual marketing campaigns.

Braze reported revenues of $135.5 million, up 33.1% year on year, surpassing analysts' expectations by 2.9%. It was a very strong quarter for the company, with an impressive beat of analysts' billings estimates and accelerating customer growth.

The company added 58 customers to reach a total of 2,102. The stock is up 7.3% since the results and currently trades at $39.5.

Read our full, actionable report on Braze here, it's free.

Freshworks (NASDAQ:FRSH)

Founded in Chennai, India in 2010 with the idea of creating a “fresh” helpdesk product, Freshworks (NASDAQ: FRSH) offers a broad range of software targeted at small and medium-sized businesses.

Freshworks reported revenues of $165.1 million, up 19.9% 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 decelerating growth in large customers.

The company added 288 enterprise customers paying more than $5,000 annually to reach a total of 20,549. The stock is down 29.8% since the results and currently trades at $12.8.

Read our full, actionable report on Freshworks here, it's free.

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