The end of an earnings season can be a great time to assess how companies are handling the current business environment and discover new stocks. Let’s have a look at how UserTesting (NYSE:USER) and the rest of the customer experience software stocks fared in Q2.
The Internet has given customers more choice on whom to conduct business with and has also given them the power to easily share their experiences with other customers. These twin dynamics effectively have increased pressure on companies to both improve their customer service and also monitor their brand reputation online, driving the need for customer experience software offerings.
The 4 customer experience software stocks we track reported a slower Q2; on average, revenues beat analyst consensus estimates by 1.51%, while on average next quarter revenue guidance was 2.48% under consensus. Investors abandoned cash burning companies since high interest rates will make it harder to raise capital and customer experience software stocks have not been spared, with share prices down 24.8% since the previous earnings results, on average.
Founded in 1999 and staying private for 22 years before a 2021 IPO, UserTesting (NYSE:USER) enables companies to receive feedback from users so they can improve their customer experience.
UserTesting reported revenues of $47.5 million, up 35.5% year on year, beating analyst expectations by 1.59%. It was a weak quarter for the company, with a full year guidance missing analysts' expectations and an underwhelming revenue guidance for the next quarter.
“The second quarter represented our sixth consecutive quarter of year-over-year subscription growth over 40%, with record total revenue of $48 million, up 36% year-over-year,” said Andy MacMillan, CEO of UserTesting.
UserTesting delivered the weakest full year guidance update of the whole group. The stock is down 44.7% since the results and currently trades at $3.54.
Best Q2: Qualtrics (NASDAQ:XM)
Founded in 2002 by Utah-based entrepreneur Ryan Smith, along with his father and brother, Qualtrics (NASDAQ:XM) provides organizations with software to collect and analyze feedback from customers and employees.
Qualtrics reported revenues of $356.3 million, up 42.9% year on year, beating analyst expectations by 3.34%. It was a decent quarter for the company, with exceptional revenue growth.
Qualtrics delivered the strongest analyst estimates beat and fastest revenue growth among its peers. The stock is down 23% since the results and currently trades at $10.56.
Is now the time to buy Qualtrics? Access our full analysis of the earnings results here, it's free.
Weakest Q2: Momentive (NASDAQ:MNTV)
Previously known as SurveyMonkey, Momentive (NASDAQ:MNTV) offers software as a service that makes it easy for users create, manage and distribute online surveys.
Momentive reported revenues of $120.1 million, up 9.84% year on year, missing analyst expectations by 1.01%. It was a weak quarter for the company, with revenue guidance for both the next quarter and the full year missing analysts' expectations.
Momentive had the weakest performance against analyst estimates and slowest revenue growth in the group. The company added 15,300 customers to a total of 909,700. The stock is down 12.1% since the results and currently trades at $7.53.
Initially focused only on social media management, Sprinklr (NYSE: CXM) is a leading provider of unified customer experience management software.
Sprinklr reported revenues of $150.6 million, up 26.9% year on year, beating analyst expectations by 2.15%. It was a mixed quarter for the company, with solid revenue growth but underwhelming revenue guidance for the next quarter.
Sprinklr scored the highest full year guidance raise among the peers. The company added 8 enterprise customers paying more than $1m annually to a total of 98. The stock is down 22.2% since the results and currently trades at $8.99.
The author has no position in any of the stocks mentioned