As sales software stocks’ Q2 earnings season wraps, let's dig into this quarter’s best and worst performers, including ZoomInfo (NASDAQ:ZI) and its peers.
Companies need to be able to interact with and sell to their customers as efficiently as possible. This reality, coupled with the ongoing migration of enterprises to the cloud drives demand for cloud-based customer relationship management (CRM) software that integrate data analytics with sales and marketing functions.
The 5 sales software stocks we track reported a mixed Q2; on average, revenues beat analyst consensus estimates by 2.44%, while on average next quarter revenue guidance was 1.12% under consensus. Increasing interest rates hurt growth companies as investors search for near-term cash flows, but sales software stocks held their ground better than others, with share prices down 4.96% since the previous earnings results, on average.
Best Q2: ZoomInfo (NASDAQ:ZI)
Founded in 2007 as DiscoveryOrg and renamed after a merger in 2019, ZoomInfo (NASDAQ:ZI) is a software as a service product that provides sales departments with access to a database of prospective clients.
ZoomInfo reported revenues of $267.1 million, up 53.5% year on year, beating analyst expectations by 5.3%. It was a strong quarter for the company, with exceptional revenue growth and a solid beat of analyst estimates.
“Customers of all sizes and industries are leveraging ZoomInfo data, insights, automation, and workflows to drive a more efficient go-to-market motion, which is critical in any economic environment,” said Henry Schuck, ZoomInfo Founder and CEO.
ZoomInfo achieved the strongest analyst estimates beat, fastest revenue growth, and highest full year guidance raise of the whole group. The company added 140 enterprise customers paying more than $100,000 annually to a total of 1,763. The stock is up 17.8% since the results and currently trades at $44.50.
Read why we think that ZoomInfo is one of the best sales software stocks, our full report is free.
Zendesk (NYSE:ZEN)
Founded in 2006 by three Danish friends who got tired of implementing complex old-school solutions, Zendesk (NYSE:ZEN) is a software as a service platform that makes it easier for companies to provide help and support to their customers.
Zendesk reported revenues of $407.2 million, up 27.9% year on year, in line with analyst expectations. It was a mixed quarter for the company, with strong top line growth but a decline in gross margin.
The stock is up 1.9% since the results and currently trades at $76.52.
Zendesk has agreed to be acquired by a group of buyout firms led by Hellman & Friedman and Permira in an all-cash transaction that values Zendesk at approximately $10.2 billion
Is now the time to buy Zendesk? Access our full analysis of the earnings results here, it's free.
Weakest Q2: Salesforce (NYSE:CRM)
Launched in 1999 from a rented one-bedroom apartment in San Francisco by Marc Benioff and his three co-founders, Salesforce (NYSE:CRM) is a software as a service platform that helps companies access, manage and share sales information.
Salesforce reported revenues of $7.72 billion, up 21.7% year on year, in line with analyst expectations. It was a weak quarter for the company, with revenue guidance for both the next quarter and full year missing analysts' expectations.
Salesforce had the weakest performance against analyst estimates, slowest revenue growth, and weakest full year guidance update in the group. The stock is down 16.8% since the results and currently trades at $150.18.
Read our full analysis of Salesforce's results here.
HubSpot (NYSE:HUBS)
Started in 2006 by two MIT grad students, HubSpot (NYSE:HUBS) is a software as a service platform that helps small and medium-size businesses sell, market themselves, and get found on the internet.
HubSpot reported revenues of $421.7 million, up 35.7% year on year, beating analyst expectations by 3.02%. While the stock was up on the results, it was a weak quarter for the company, with guidance for both the next quarter and full year missing analysts' expectations.
The company added 7,176 customers to a total of 150,865. The stock is down 21% since the results and currently trades at $280.50.
Read our full, actionable report on HubSpot 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 $121.4 million, up 37.4% year on year, beating analyst expectations by 2.95%. It was a slower quarter for the company, with an underwhelming revenue guidance for the next quarter.
The company added 573 enterprise customers paying more than $5,000 annually to a total of 16,212. The stock is down 6.68% since the results and currently trades at $12.99.
Read our full, actionable report on Freshworks here, it's free.
The author has no position in any of the stocks mentioned