WalkMe (WKME) Q3 Earnings Report Preview: What To Look For

Adam Hejl /
2023/11/13 2:02 am EST

User support software provider WalkMe (NASDAQ: WKME) will be reporting earnings tomorrow morning. Here's what investors should know.

Last quarter WalkMe reported revenues of $66.16 million, up 10.4% year on year, in line with analyst expectations. It was a weak quarter for the company, with full-year revenue guidance missing analysts' expectations and underwhelming revenue guidance for the next quarter.

Is WalkMe buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting WalkMe's revenue to grow 6.4% year on year to $67.41 million, slowing down from the 25.2% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted loss is expected to come in at -$0.01 per share.

WalkMe Total Revenue

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company has a history of exceeding Wall St's expectations, beating revenue estimates every single time over the past two years on average by 1.3%.

Looking at WalkMe's peers in the sales and marketing software segment, some of them have already reported Q3 earnings results, giving us a hint of what we can expect. Shopify delivered top-line growth of 25.5% year on year, beating analyst estimates by 2.6% and The Trade Desk reported revenues up 24.9% year on year, exceeding estimates by 1.2%. Shopify traded up 16.9% on the results, The Trade Desk was down 26.3%.

Read our full analysis of Shopify's results here and The Trade Desk's results here.

Triggered by the Federal Reserve's hawkish stance on interest rates, shares of technology companies have been facing sell-off since 2022 and while some of the sales and marketing software stocks have fared somewhat better, they have not been spared, with share price declining 2.7% over the last month. WalkMe is up 6.8% during the same time, and is heading into the earnings with analyst price target of $12.6, compared to share price of $9.45.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

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The author has no position in any of the stocks mentioned.