To wrap up the second quarter results, we look at the numbers and key takeaways for the project management software stocks, including Atlassian (NASDAQ:TEAM) and its peers.
The future of work requires teams to collaborate across departments and remote offices. Project management software drives and benefits from this change. While the trend of collaborative work management has been strong for a while, the Covid pandemic has definitely accelerated the demand for tools that allow work to be done remotely.
The four project management software stocks we track reported a mixed second quarter. As a group, revenues exceeded analyst consensus expectations by 1.2%, while revenue expectations for the next quarter were in line.
The big picture is that the Federal Reserve has a dual mandate: inflation and employment. The former was at a high temperature in 2021 and 2022, but has recently cooled towards the central bank’s 2% target. This prompted the Fed to cut its policy rate by 50 basis points (half a percent) in September 2024. Given recent employment data suggesting the US economy could be faltering, markets will assess whether these rate cuts and future cuts (the Fed indicated more to come in 2024 and 2025) are the right moves at the right time, or whether they are too little or too late for a macro that has already cooled down.
In light of this news, project management software shares have held steady, with share prices up an average of 3.7% since the last earnings results.
Weakest Second Quarter: Atlassian (NASDAQ:TEAM)
Founded in 2002 by Australian co-CEOs Mike Cannon-Brookes and Scott Farquhar, Atlassian (NASDAQ:TEAM) provides software as a service that makes it easier for large teams of software developers to manage projects, especially in software development.
Atlassian reported revenue of $1.13 billion, up 20.5% year over year. This print was in line with analyst expectations, but overall it was a weaker quarter for the company with disappointing revenue expectations for the next quarter and management predicting growth would slow.
“We have announced transformative innovations for our customers, such as Rovo, the latest human AI technology that is reshaping the way we work. “We’ve achieved key milestones such as FedRAMP’s In Process status, a huge step toward supporting the US public sector in the cloud, and we’ve ended support for Server,” said Mike Cannon-Brookes, co-founder and co-CEO of Atlassian.
Atlassian delivered the weakest performance against analyst estimates and the weakest full-year guidance update across the group. Unsurprisingly, the stock is down 3.3% since reporting and is currently trading at $167.50.
Is Now the Time to Buy Atlassian? See our full analysis of earnings results here. It’s free.
Best Second Quarter: Monday.com (NASDAQ:MNDY)
Founded in 2014 in Israel and named after the dreaded first day of the work week, Monday.com (NASDAQ:MNDY) creates a software as a service platform that helps teams plan and track their work efficiently.
Monday.com reported revenue of $236.1 million, up 34.4% year over year, beating analyst expectations by 3%. The company had a strong quarter with solid improvement in analysts’ annual recurring revenue (ARR) estimates and full-year revenue estimates exceeding analyst expectations.
Monday.com achieved the highest earnings forecast from analysts, the fastest revenue growth and the highest full-year forecast increase among its peers. The company added 222 business customers paying more than $50,000 annually, bringing the total to 2,713. The market seems pleased with the results, as the stock is up 22.5% since reporting. It is currently trading at $276.56.
Is Now the Time to Buy Monday.com? See our full analysis of earnings results here. It’s free.
Asana (NYSE:ASAN)
Founded in 2008 by Facebook co-founder Dustin Moskovitz, Asana (NYSE:ASAN) is a cloud-based project management software that allows you to plan and assign tasks to employees and track and discuss work progress.
Asana reported revenue of $179.2 million, up 10.3% year over year, in line with analyst expectations. It was a slower quarter as analyst expectations were not met and full-year revenue expectations were incorrect.
Asana achieved the slowest revenue growth within the group. The company added 786 business customers paying more than $5,000 annually, bringing the total to 22,948. As expected, the stock has fallen 14.6% since the results and is currently trading at $11.34.
Read our full analysis of Asana’s results here.
Smartsheet (NYSE:SMAR)
Founded in 2005, Smartsheet (NYSE:SMAR) is a software-as-a-service platform that helps companies plan, manage and report work.
Smartsheet reported revenue of $276.4 million, up 17.3% year over year. This figure was in line with analyst expectations. Let’s take a step back: It was a mixed quarter, as it also delivered accelerated growth among major customers, but full-year revenue expectations fell short of analyst expectations.
The company added 221 business customers paying more than $5,000 annually, bringing the total to 20,198. The stock is up 12.4% since reporting and is currently trading at $55.41.
Read our full, actionable report on Smartsheet here. It’s free.
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