Third Quarter Earnings Highs and Lows: Salesforce (NYSE:CRM) vs. the Rest of the Sales Software Stocks
To wrap up the third quarter results, we look at the numbers and key insights for the sales software stocks, including Salesforce (NYSE:CRM) and peers.
Companies must be able to communicate with their customers and sell to their customers as efficiently as possible. This reality, coupled with the continued migration of enterprises to the cloud, is driving demand for cloud-based CRM (Customer Relationship Management) software that integrates data analytics with sales and marketing functions.
The four sales software stocks we track reported a satisfying third quarter. As a group, revenues exceeded analyst consensus expectations by 2.2%, while revenue expectations for the next quarter were in line.
Fortunately, the companies’ share prices have been resilient, having risen an average of 5.4% since the last earnings results.
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 allows companies to access, manage and share sales information. .
Salesforce reported revenue of $9.44 billion, up 8.3% year over year. This print exceeded analyst expectations by 1%. Despite the revenue growth, it was still a mixed quarter for the company, with a solid gain in analyst EBITDA estimates, but next quarter earnings estimates falling short of analyst expectations.
“We delivered another quarter of exceptional financial performance across revenue, margin, cash flow and cRPO,” said Marc Benioff, chairman and CEO of Salesforce.
Total Salesforce revenue
Salesforce delivered the weakest performance against analyst estimates and the weakest full-year guidance update across the group. Interestingly, the stock is up 4.3% since reporting and is currently trading at $345.94.
Read our full report on Salesforce here. It’s free.
Founded in 2006 by two MIT students, HubSpot (NYSE:HUBS) is a software-as-a-service platform that helps small and medium-sized businesses market, sell and get found on the Internet.
HubSpot reported revenue of $669.7 million, up 20.1% year over year, and beat analyst expectations by 3.5%. The company had a very strong quarter with a solid profit in analyst expectations and an impressive gain in analyst EBITDA estimates.
HubSpot Total Revenue
HubSpot delivered the highest earnings forecast among analysts and the highest full-year earnings estimates among its peers. The company added 10,074 customers for a total of 238,128. The market seems pleased with the results, as the stock is up 19.6% since reporting. It is currently trading at $715.01.
Is Now the Time to Buy HubSpot? See our full analysis of earnings results here. It’s free.
ZoomInfo (NASDAQ:ZI), founded in 2007 as DiscoveryOrg and renamed after a merger in 2019, is a software-as-a-service product that gives sales departments access to a database of potential customers.
ZoomInfo reported revenue of $303.6 million, down 3.3% year over year, beating analyst expectations by 1.4%. Still, it was a mixed quarter, as growth among major customers slowed.
ZoomInfo delivered the slowest revenue growth within the group. The company added 12 corporate customers paying more than $100,000 annually, bringing the total to 1,809. As expected, the stock has fallen 18.2% since the results and is currently trading at $10.71.
Read our full analysis of ZoomInfo’s results here.
Founded in Chennai, India in 2010 with the idea of creating a “new” helpdesk product, Freshworks (NASDAQ: FRSH) offers a wide range of software aimed at small and medium-sized businesses.
Freshworks reported revenue of $186.6 million, up 21.5% year over year. This figure exceeded analyst expectations by 2.7%. Overall, it was a strong quarter as it also delivered an impressive return to analysts’ annual recurring revenue and EBITDA estimates.
Freshworks scored the fastest revenue growth among its competitors. The company added 615 business customers paying more than $5,000 annually, bringing the total to 22,359. The stock is up 16% since reporting and is currently trading at $15.18.
Read our full, actionable report on Freshworks here. It’s free.
Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs and is moving closer to the 2% target. This disinflation has occurred without serious consequences for economic growth, indicating a soft landing success. The stock market boomed in 2024, boosted by recent interest rate cuts (0.5% in September and 0.25% each in November and December), and a notable rise followed Donald Trump’s victory in the November presidential election, boosting the indices were pushed to historic highs. Nevertheless, the outlook for 2025 remains clouded by the pace and magnitude of future rate cuts and by potential changes to trade policy and corporate taxes once the Trump administration takes over. The path forward is marked by uncertainty.
Do you want to invest in winners with rock-solid fundamentals? Check out our Strong Momentum stocks and add them to your watchlist. These companies are primed for growth regardless of the political or macroeconomic environment.
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