Let’s dig into the relative performance of Monday.com (NASDAQ: MNDY) and its peers as we unravel the now-completed Q1 productivity software earnings season.
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. On average, they are relatively unchanged since the latest earnings results.
Monday.com (NASDAQ: MNDY)
Founded in 2014 and named after the dreaded first day of the work week, Monday.com (NASDAQ: MNDY) is a software-as-a-service platform that helps organizations plan and track work efficiently.
Monday.com reported revenues of $282.3 million, up 30.1% year on year. This print exceeded analysts’ expectations by 2.3%. Overall, it was a strong quarter for the company with an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ billings estimates.
“Our strong financial performance and disciplined execution position us well to navigate uncertainties ahead ,” said Eliran Glazer, monday.com CFO.
The market was likely pricing in the results, and the stock is flat since reporting. It currently trades at $280.46.
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 scored the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 44.2% since reporting. It currently trades at $99.20.
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. As expected, the stock is down 2.1% since the results and currently trades at $9.53.
Read our full analysis of SoundHound AI’s results here.
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 beat analysts’ expectations by 2.1%. More broadly, it was a mixed quarter as it also recorded a solid beat of analysts’ EBITDA estimates but a slight miss of analysts’ billings estimates.
The stock is down 19.3% since reporting and currently trades at $75.05.
Read our full, actionable report on DocuSign here, it’s free.
Box (NYSE: BOX)
Founded in 2005 by Aaron Levie and Dylan Smith, Box (NYSE: BOX) provides organizations with software to securely store, share and collaborate around work documents in the cloud.
Box reported revenues of $276.3 million, up 4.4% year on year. This number surpassed analysts’ expectations by 0.6%. Overall, it was a very strong quarter as it also recorded a solid beat of analysts’ billings estimates and EPS guidance for next quarter exceeding analysts’ expectations.
The stock is up 8.9% since reporting and currently trades at $34.25.
Read our full, actionable report on Box 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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