As the craze of earnings season draws to a close, here's a look back at some of the most exciting (and some less so) results from Q2. Today we are looking at the automation software stocks, starting with ServiceNow (NYSE:NOW).
The whole purpose of software is to automate tasks to increase productivity. Today, innovative new software techniques, often involving AI and machine learning, are finally allowing automation that has graduated from simple one- or two-step workflows to more complex processes integral to enterprises. The result is surging demand for modern automation software.
The 6 automation software stocks we track reported a weak Q2; on average, revenues were in line with analyst consensus estimates, while on average next quarter revenue guidance was 1.13% under consensus. Tech stocks have been hit the hardest as investors start to value profits over growth and while some of the automation software stocks have fared somewhat better than others, they have not been spared, with share prices declining 6.12% since the previous earnings results, on average.
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 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.
ServiceNow scored the fastest revenue growth of the whole group. The company added 42 enterprise customers paying more than $1m annually to a total of 1,724. The stock is up 2.01% since the results and currently trades at $589.35.Is now the time to buy ServiceNow? Read our full report on ServiceNow here.
Best Q2: 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 $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.
Appian delivered the strongest analyst estimates beat and highest full year guidance raise among its peers. The stock is down 1.06% since the results and currently trades at $47.68.
Is now the time to buy Appian? Access our full analysis of the earnings results here, it's free.
Weakest Q2: 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 $298.3 million, up 8.72% year on year, missing analyst expectations by 3.98%. 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 down 18.3% since the results and currently trades at $45.
Started in 2005 in Romania as a tech outsourcing company, UiPath (NYSE:PATH) makes software that helps companies automate repetitive computer tasks.
UiPath reported revenues of $287.3 million, up 18.6% year on year, beating analyst expectations by 1.86%. It was a decent quarter for the company, with a beat of analysts' revenue estimates. It was also good to see that its full-year guidance was raised across the board and came in higher than Wall Street's estimates, especially on non-GAAP operating profit.
The stock is up 14.6% since the results and currently trades at $18.58.
Founded in 2002 by Zach Halmstad and Chip Pearson, right around the time when Apple began to dominate the personal computing market, Jamf (NASDAQ:JAMF) provides software for companies to manage Apple devices such as Macs, iPads, and iPhones.
Jamf reported revenues of $135.1 million, up 16.8% year on year, in line with analyst expectations. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and full-year.
The stock is down 17.7% since the results and currently trades at $16.32.
The author has no position in any of the stocks mentioned