Wrapping up Q3 earnings, we look at the numbers and key takeaways for the sales software stocks, including Salesforce (NYSE: CRM) and its peers.

Companies need to be able to interact with and sell to their customers as efficiently as possible. This reality coupled with the ongoing migration of enterprises to the cloud drives demand for cloud-based customer relationship management (CRM) software that integrates data analytics with sales and marketing functions.

The 4 sales software stocks we track reported a strong Q3. As a group, revenues beat analysts’ consensus estimates by 2.6% while next quarter’s revenue guidance was in line.

While some sales software stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 2.7% since the latest earnings results.

Salesforce (NYSE: CRM)

With its cloud-based platform named after its stock ticker symbol CRM (Customer Relationship Management), Salesforce (NYSE: CRM) provides customer relationship management software that helps businesses connect with their customers across sales, service, marketing, and commerce.

Salesforce reported revenues of $10.26 billion, up 8.6% year on year. This print was in line with analysts’ expectations, and overall, it was a strong quarter for the company with full-year EPS guidance exceeding analysts’ expectations and a solid beat of analysts’ EBITDA estimates.

Salesforce achieved the highest full-year guidance raise but had the weakest performance against analyst estimates of the whole group. Unsurprisingly, the stock is up 8.2% since reporting and currently trades at $258.66.

Is now the time to buy Salesforce? Access our full analysis of the earnings results here, it’s free for active Edge members.

Best Q3: Freshworks (NASDAQ: FRSH)

Starting as a customer service solution before expanding into a comprehensive software suite, Freshworks (NASDAQ: FRSH) provides AI-powered software-as-a-service solutions that help companies manage customer service, IT support, sales, and marketing functions.

Freshworks reported revenues of $215.1 million, up 15.3% year on year, outperforming analysts’ expectations by 3%. The business had a strong quarter with EPS guidance for next quarter exceeding analysts’ expectations and a solid beat of analysts’ EBITDA estimates.

The market seems happy with the results as the stock is up 12.1% since reporting. It currently trades at $12.40.

Is now the time to buy Freshworks? Access our full analysis of the earnings results here, it’s free for active Edge members.

Weakest Q3: HubSpot (NYSE: HUBS)

Born from the idea that traditional interruptive marketing was becoming less effective, HubSpot (NYSE: HUBS) provides an integrated platform that helps businesses attract, engage, and manage customer relationships through marketing, sales, service, and content management tools.

HubSpot reported revenues of $809.5 million, up 20.9% year on year, exceeding analysts’ expectations by 3%. It may have had the worst quarter among its peers, but its results were still good as it also locked in a solid beat of analysts’ EBITDA estimates and full-year EPS guidance slightly topping analysts’ expectations.

As expected, the stock is down 16.6% since the results and currently trades at $387.56.

Read our full analysis of HubSpot’s results here.

ZoomInfo (NASDAQ: GTM)

Operating a platform it calls "RevOS" - short for Revenue Operating System - ZoomInfo (NASDAQ: GTM) provides sales, marketing, and recruiting teams with business intelligence and analytics to identify prospects and deliver targeted outreach.

ZoomInfo reported revenues of $318 million, up 4.7% year on year. This result surpassed analysts’ expectations by 4.7%. Overall, it was a strong quarter as it also produced EPS guidance for next quarter exceeding analysts’ expectations and full-year EPS guidance exceeding analysts’ expectations.

ZoomInfo delivered the biggest analyst estimates beat but had the slowest revenue growth and slowest revenue growth among its peers. The company added 3 enterprise customers paying more than $100,000 annually to reach a total of 1,887. The stock is down 14.7% since reporting and currently trades at $10.07.

Read our full, actionable report on ZoomInfo here, it’s free for active Edge members.

Market Update

Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.

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