The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how DocuSign (NASDAQ:DOCU) and the rest of the productivity software stocks fared in Q1.
Rising employee costs and the shift to more remote work has increased the ever-present pressure to improve corporate productivity, which in turn has driven rising demand for productivity software that enables remote work, streamline project management and automate business tasks.
The 17 productivity software stocks we track reported a strong Q1. As a group, revenues beat analysts’ consensus estimates by 3% while next quarter’s revenue guidance was in line.
In light of this news, share prices of the companies have held steady as they are up 3.4% on average since the latest earnings results.
DocuSign (NASDAQ:DOCU)
Founded by Seattle-based entrepreneur Tom Gonser, DocuSign (NASDAQ:DOCU) is the pioneer of e-signature and offers software as a service that allows people and organisations to sign legally binding documents electronically.
DocuSign reported revenues of $763.7 million, up 7.6% year on year. This print exceeded analysts’ expectations by 2.1%. Despite the top-line beat, it was still a mixed quarter for the company with an impressive beat of analysts’ EBITDA estimates but a slight miss of analysts’ billings estimates.
"Q1 was an important quarter for Docusign's long-term transformation as we delivered on an ambitious product roadmap and surpassed 10,000 Intelligent Agreement Management customers," said Allan Thygesen, CEO of Docusign.
The stock is down 18.1% since reporting and currently trades at $76.19.
Is now the time to buy DocuSign? Access our full analysis of the earnings results here, it’s free.
Best Q1: Pegasystems (NASDAQ:PEGA)
Founded by Alan Trefler in 1983, Pegasystems (NASDAQ:PEGA) offers a software-as-a-service platform to automate and optimize workflows in customer service and engagement.
Pegasystems reported revenues of $475.6 million, up 44.1% year on year, outperforming analysts’ expectations by 33.1%. The business had an incredible quarter with a solid beat of analysts’ billings estimates and an impressive beat of analysts’ EBITDA estimates.
Pegasystems delivered the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 47.2% since reporting. It currently trades at $101.29.
Is now the time to buy Pegasystems? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: SoundHound AI (NASDAQ:SOUN)
Founded in 2005, SoundHound AI (NASDAQ:SOUN) develops independent voice artificial intelligence solutions that enable businesses across various industries to offer customized conversational experiences to consumers.
SoundHound AI reported revenues of $29.13 million, up 151% year on year, falling short of analysts’ expectations by 4.4%. It was a softer quarter as it posted a significant miss of analysts’ EBITDA estimates.
SoundHound AI delivered the fastest revenue growth but had the weakest performance against analyst estimates in the group. The stock is flat since the results and currently trades at $9.76.
Read our full analysis of SoundHound AI’s results here.
Five9 (NASDAQ:FIVN)
Started in 2001, Five9 (NASDAQ: FIVN) offers software-as-a-service that makes it easier for companies to set up and efficiently run call centers to offer more tailored customer support.
Five9 reported revenues of $279.7 million, up 13.2% year on year. This result beat analysts’ expectations by 2.6%. Overall, it was a very strong quarter as it also logged EPS guidance for next quarter exceeding analysts’ expectations and an impressive beat of analysts’ EBITDA estimates.
The stock is up 13.5% since reporting and currently trades at $28.49.
Read our full, actionable report on Five9 here, it’s free.
Dropbox (NASDAQ:DBX)
Founded by the long-serving CEO Drew Houston and Arash Ferdowsi in 2007, Dropbox (NASDAQ:DBX) provides a file hosting cloud platform that helps organizations collaborate and share documents.
Dropbox reported revenues of $624.7 million, down 1% year on year. This number topped analysts’ expectations by 0.7%. Aside from that, it was a mixed quarter as it also produced a solid beat of analysts’ EBITDA estimates but decelerating customer growth.
The company lost 60,000 customers and ended up with a total of 18.16 million. The stock is down 4.3% since reporting and currently trades at $28.41.
Read our full, actionable report on Dropbox here, it’s free.
Market Update
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.
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