The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s have a look at how the sales software stocks have fared in Q1, starting with Zendesk (NYSE:ZEN).
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 decent Q1; on average, revenues beat analyst consensus estimates by 3.34%, while on average next quarter revenue guidance was 1% above consensus. The whole tech sector has been facing a sell-off since late last year and while some of the sales software stocks have fared somewhat better, they have not been spared, with share price declining 12.9% since earnings, on average.
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 $388.3 million, up 30.2% year on year, beating analyst expectations by 1.03%. It was a decent quarter for the company, with a strong top line growth and guidance for the next quarter roughly in line with what analysts were expecting.
Zendesk has agreed to be acquired by a group of buyout firms led by Hellman & Friedman and Permira for about $10.2 billion.
The stock is down 38.4% since the results and currently trades at $74.48.
Is now the time to buy Zendesk? Access our full analysis of the earnings results here, it's free.
Best Q1: 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 $241.7 million, up 57.6% year on year, beating analyst expectations by 6.03%. It was a very strong quarter for the company, with an exceptional revenue growth and a very optimistic guidance for the next quarter.
ZoomInfo achieved the strongest analyst estimates beat, fastest revenue growth, and highest full year guidance raise among its peers. The company added 171 enterprise customers paying more than $100,000 annually to a total of 1,623. The stock is down 23% since the results and currently trades at $37.90.
Is now the time to buy ZoomInfo? Access our full analysis of the earnings results here, it's free.
Slowest Q1: 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 $7.41 billion, up 24.2% year on year, in line with analyst expectations. It was a weaker quarter for the company, with an underwhelming revenue guidance for the next quarter and a full year guidance 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 up 16.6% since the results and currently trades at $187.74.
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 $395.5 million, up 40.5% year on year, beating analyst expectations by 3.31%. It was a mixed quarter for the company, with an exceptional revenue growth but an underwhelming revenue guidance for the next quarter.
The company added 8,247 customers to a total of 143,689. The stock is up 0.72% since the results and currently trades at $345.
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 $114.6 million, up 42.2% year on year, beating analyst expectations by 5.91%. It was a very strong quarter for the company, with an exceptional revenue growth, and guidance for the next quarter beating analysts' estimates.
The company added 825 enterprise customers paying more than $5,000 annually to a total of 15,639. The stock is down 20.5% since the results and currently trades at $13.50.
Read our full, actionable report on Freshworks here, it's free.
The author has no position in any of the stocks mentioned