As we look back at the second quarter earnings numbers of design software stocks, we look at the quarter’s best and worst performers, including Procore (NYSE:PCOR) and peers.
The demand for rich, interactive 2D, 3D, VR, and AR experiences is growing. While the ubiquitous metaverse may still be more of a buzzword than something that actually exists, the tools to create these experiences, whether they’re games, 3D tours, or interactive films, are in high demand.
The 7 design software stocks we follow reported a slower second quarter. As a group, revenues topped analysts’ consensus estimates by 1.9%, while revenue forecasts for the next quarter were in line.
Valuation multiples for many growth stocks have yet to return to their early 2021 highs, but the market was optimistic at the end of 2023 amid cooling inflation. This year has been a different story, as mixed inflation signals have led to market volatility. Design software stocks, however, have remained stable amid it all, with share prices up an average of 2.3% since the last earnings results.
Procore (NYSE:PCOR)
Procore (NYSE:PCOR) is responsible for managing the multi-year expansion of the Panama Canal, which began in 2007. The company provides a software-as-service platform for projects, finance and quality management for the construction industry.
Procore reported revenue of $284.3 million, up 24.4% year-over-year. The print topped analyst expectations by 3.3%. Despite the top-line beat, it was still a mixed quarter for the company, with a solid beat on analysts’ ARR (annual recurring revenue) estimates but slowing customer growth.
“We are in the early stages of transforming one of the largest and least digitized industries in the world,” said Tooey Courtemanche, founder, president and CEO of Procore.
Procore posted the fastest revenue growth of the group, adding 152 customers for a total of 16,750. While it had a great quarter compared to its peers, the market seems unhappy with the results. The stock has fallen 5.1% since reporting and is currently trading at $272.80.
Is now the time to buy Procore? Check out our full profit analysis here, it’s free.
Best Q2: Cadence (NASDAQ:CDNS)
The name Cadence Design Systems (NASDAQ:CDNS) reflects the idea of a repeating pattern or rhythm in electronic design and provides a software-as-a-service platform for semiconductor engineering and design.
Cadence reported revenue of $1.06 billion, up 8.6% year over year, beating analysts’ expectations by 1.7%. The company outperformed its peers, but unfortunately it was a mixed quarter with a solid beating of analysts’ billings estimates but a decline in gross margin.
While it had a solid quarter compared to its peers, the market seems unhappy with the results, as the stock is down 5.1% since the report. It is currently trading at $272.80.
Is now the time to buy Cadence? Check out our full earnings analysis here, it’s free.
Weakest Q2: PTC (NASDAQ:PTC)
PTC’s (NASDAQ:PTC) software-as-service platform is used in the design of the Airbus A380 and Boeing 787 Dreamliner commercial aircraft, helping engineers and designers create and test products before production.
PTC reported revenue of $518.6 million, down 4.4% year over year, 2.8% below analysts’ expectations. It was a softer quarter, as it reported a miss on analysts’ billings estimates and a decline in gross margin.
PTC delivered the weakest performance against analyst estimates and the weakest full-year forecast update of the group. As expected, the stock has fallen 2.2% since the results and is currently trading at $173.76.
Read our full analysis of PTC’s results here.
ANSYS (NASDAQ:ANSS)
Ansys (NASDAQ:ANSS) provides a software-as-a-service platform that enables simulation for engineering and design and is being used in the design of the Mars Rover.
ANSYS reported revenue of $594.1 million, up 19.6% year over year. This print beat analysts’ expectations by 6.9%. Other than that, it was a mixed quarter, as it recorded a miss on analysts’ average contract value estimates and a decline in gross margin.
ANSYS has beaten the biggest analyst estimates of its peers. The stock has risen 1.4% since the report and is currently trading at $318.05.
Read our full, actionable report on ANSYS here. It’s free.
Unity (NYSE:U)
Unity (NYSE:U) is a software-as-a-service platform that makes it easier to develop and monetize new games and other visual digital experiences. It was founded by three friends in an apartment in Copenhagen.
Unity reported revenue of $449.3 million, down 15.8% year-over-year. The figure beat analysts’ expectations by 1.7%. However, it was a mixed quarter, as it missed analysts’ billing estimates.
Unity had the slowest revenue growth among its peers. The stock is up 42.8% since the report and is currently trading at $20.51.
Read our full hands-on report on Unity here. It’s free.
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