To wrap up the second quarter results, we look at the numbers and key takeaways for software stocks in the sales and marketing sector, including Braze (NASDAQ:BRZE) and peers.
The Internet and its exploding data have transformed the way businesses interact with, market to, and transact with their customers. Personalization of offers, e-commerce, targeted advertising, and data-driven sales teams are now commonplace in modern businesses, and sales and marketing software vendors are becoming the tools for this evolving customer interaction.
The 23 sales and marketing software stocks we track reported a mixed second quarter. As a group, revenues topped analysts’ consensus estimates by 1.2%, while revenue guidance for the next quarter was in line.
Inflation has recently moved toward the Fed’s 2% target, prompting the Fed to cut its policy rate by 50 bps (half a percent or 0.5%) in September 2024. This is the first cut in four years. While CPI (inflation) numbers have been supportive of late, employment measures have bordered on worrisome. Markets will debate whether the timing of this rate cut (and more potential cuts in 2024 and 2025) is ideal to support the economy or a bit too late for a macro that has already cooled too much.
Fortunately, sales and marketing software stocks have proven resilient, with share prices up an average of 6.6% since the last earnings report.
Braze (NASDAQ: BRAZE)
Founded in 2011 after its founders met at the NYC Disrupt Hackathon, Braze (NASDAQ:BRZE) is a customer engagement software platform that enables brands to connect with customers through data-driven and contextual marketing campaigns.
Braze reported revenue of $145.5 million, up 26.4% year-over-year. The print topped analyst expectations by 3%. Despite the top-line beat, it was still a mixed quarter for the company with a significant improvement in gross margin but a miss on analyst billings estimates.
“We delivered a great second quarter, with strong revenue growth and a boost to our business efficiency. We achieved our first quarter of non-GAAP operating profitability and non-GAAP net income profitability. Our results demonstrate our effective execution and continued demand for the Braze Customer Engagement Platform,” said Bill Magnuson, co-founder and CEO of Braze.
Unsurprisingly, the stock is down 24.1% since the report, currently trading at $33.55.
Is now the time to buy Braze? Check out our full earnings analysis here, it’s free.
Best Q2: Zeta (NYSE:ZETA)
Zeta Global (NYSE:ZETA), co-founded by former Apple CEO John Scully, provides software and data analytics tools that enable companies to sell their products to billions of customers.
Zeta reported revenue of $227.8 million, up 32.6% year over year, beating analysts’ expectations by 7.2%. The company had an exceptional quarter, impressively beating analysts’ billings estimates and optimistic revenue guidance for the next quarter.
Zeta delivered the highest analyst estimates among its peers. The market seems pleased with the results, as the stock has risen 38.1% since the report. It is currently trading at $29.65.
Is now the time to buy Zeta? Check out our full earnings analysis here, it’s free.
Weakest Q2: PubMatic (NASDAQ:PUBM)
Founded in 2006 as an online advertising platform for advertisers, Pubmatic (NASDAQ: PUBM) is a fully integrated cloud-based programmatic advertising platform.
PubMatic reported revenue of $67.27 million, up 6.2% year over year, which was 4.1% below analysts’ expectations. It was a disappointing quarter, as it issued a disappointing revenue forecast for the next quarter.
As expected, the stock has fallen 27.2% since the results and is currently trading at $14.26.
Read our full analysis of PubMatic’s results here.
Freshworks (NASDAQ:FRSH)
Freshworks (NASDAQ: FRSH) was founded in 2010 in Chennai, India, with the idea of creating a “fresh” helpdesk product. The company offers a wide range of software aimed at small and medium-sized businesses.
Freshworks reported revenue of $174.1 million, up 20% year over year. This figure beat analysts’ expectations by 3%. It was a very strong quarter, as it also saw accelerating growth in large customers and an impressive beating of analyst billings estimates.
The company added 1,195 business customers who pay more than $5,000 annually, bringing its total to 21,744. The stock has fallen 16.1% since the report, currently trading at $11.15.
Read our full, actionable report on Freshworks here. It’s free.
VeriSign (NASDAQ:VRSN)
While the company is not a domain registrar and does not sell domain names directly to end users, Verisign (NASDAQ:VRSN) manages and maintains the infrastructure to support domain names such as .com and .net.
VeriSign reported revenue of $387.1 million, up 4.1% year-over-year. The print was in line with analysts’ expectations. Zooming out, it was a decent quarter, showing the company is staying on track.
The stock has risen 3.3% since the report and is currently trading at $182.39.
Read our full, actionable report on VeriSign here. It’s free.
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