As the earnings season craze comes to a close, here’s a look back at some of the most exciting (and some not so) results from the second quarter. Today we’ll look at productivity software stocks, starting with Box (NYSE:BOX).
Rising workforce costs and the shift to more remote work have increased the ever-present pressure to improve business productivity, which in turn has driven rising demand for productivity software that enables remote work, streamlines project management and automates business tasks.
The sixteen productivity software stocks we track reported a mixed second quarter. As a group, revenues exceeded analyst consensus expectations by 1.7%, while revenue expectations for the next quarter were 0.5% below that.
After much tension, the Federal Reserve lowered its policy interest rate by 50 basis points (half a percent) in September 2024. This marks the central bank’s first easing of monetary policy since 2020 and the end of its most targeted anti-inflation campaign since the 1980s. Inflation started to spike in 2021 following the COVID-19 crisis due to a confluence of factors such as supply chain disruptions, labor shortages and stimulus spending. While CPI (inflation) numbers have been positive recently, employment measures have raised some concerns. Going forward, markets will debate whether this rate cut (and more potential rate cuts in 2024 and 2025) is the perfect timing to support the economy, or whether it’s a bit too late for a macro that’s already too much cooled down.
In light of this news, productivity software stocks have held steady, with share prices up an average of 3.8% since the last earnings results.
Box (NYSE:BOX)
Box (NYSE:BOX), founded in 2005 by Aaron Levie and Dylan Smith, provides organizations with software for securely storing, sharing and collaborating on work documents in the cloud.
Box reported revenue of $270 million, up 3.3% year over year. This print was in line with analyst expectations, and overall it was a strong quarter for the company with an impressive improvement in analyst expectations and a meaningful improvement in gross margin.
Interestingly, the stock is up 11.5% since reporting and is currently trading at $32.15.
Is Now the Time to Buy Box? See our full analysis of earnings results here. It’s free.
Best Second Quarter: Pegasystems (NASDAQ:PEGA)
Founded in 1983 by Alan Trefler, Pegasystems (NASDAQ:PEGA) provides a software-as-a-service platform for automating and optimizing customer service and engagement workflows.
Pegasystems reported revenue of $351.2 million, up 17.7% year over year, beating analyst expectations by 8.1%. The company had a stunning quarter with an impressive improvement in analyst expectations and an improvement in gross margin.
Pegasystems delivered the highest analyst earnings forecast among its peers. The market seems pleased with the results, as the stock is up 12.3% since reporting. It is currently trading at $68.63.
Is Now the Time to Buy Pegasystems? See our full analysis of earnings results here. It’s free.
Weakest Q2: 8×8 (NASDAQ:EGHT)
Founded in 1987, 8×8 (NYSE:EGHT) provides software that helps organizations communicate and collaborate efficiently with their customers, employees and partners.
8×8 reported revenue of $178.1 million, down 2.8% year over year, in line with analyst expectations. It was a weaker quarter as revenue expectations for the next quarter were disappointing and analyst expectations were not met.
8×8 had the weakest performance compared to analyst estimates and the slowest revenue growth in the group. As expected, the stock has fallen 14.7% since the results and is currently trading at $2.20.
Read our full analysis of 8×8 results here.
Dropbox (NASDAQ:DBX)
Founded in 2007 by longtime CEO Drew Houston and Arash Ferdowsi, Dropbox (NASDAQ:DBX) offers a cloud file hosting platform that allows organizations to collaborate and share documents.
Dropbox reported revenue of $634.5 million, up 1.9% year over year. This result met analysts’ expectations. Zooming out, it was a mixed quarter, as there was also accelerated customer growth, but analyst expectations were not met.
The company added 60,000 customers for a total of 18.22 million. The stock is up 15.6% since reporting and is currently trading at $25.13.
Read our full, actionable report on Dropbox here. It’s free.
DocuSign (NASDAQ:DOCU)
DocuSign (NASDAQ:DOCU), founded by Seattle-based entrepreneur Tom Gonser, is the pioneer in electronic signatures, offering software as a service that allows people and organizations to electronically sign legally binding documents.
DocuSign reported revenue of $736 million, up 7% year over year. This print exceeded analyst expectations by 1.1%. However, it was a mixed quarter as it underperformed in a number of other aspects of the business.
The stock is up 12.3% since reporting and is currently trading at $63.89.
Read our full, actionable report on DocuSign here. It’s free.
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