Let’s dig into the relative performance of Microsoft (NASDAQ: MSFT) and its peers as we unravel the now-completed Q2 automation software earnings season.
The whole purpose of software is to automate tasks to increase productivity. Today, innovative new software techniques, often involving AI and machine learning, are finally allowing automation that has graduated from simple one- or two-step workflows to more complex processes integral to enterprises. The result is surging demand for modern automation software.
The 6 automation software stocks we track reported an exceptional Q2. As a group, revenues beat analysts’ consensus estimates by 9.1% while next quarter’s revenue guidance was in line.
Luckily, automation software stocks have performed well with share prices up 12.1% on average since the latest earnings results.
Microsoft (NASDAQ: MSFT)
Short for microcomputer software, Microsoft (NASDAQ: MSFT) is the largest software vendor in the world with its Windows operating system, Office suite, and cloud computing services.
Microsoft reported revenues of $76.44 billion, up 18.1% year on year. This print exceeded analysts’ expectations by 3.5%. Overall, it was an exceptional quarter for the company with a narrow beat of analysts’ revenue estimates, as Personal Computing, Intelligent Cloud, and Business Services all beat and an impressive beat of analysts’ operating income estimates.
Interestingly, the stock is up 1.5% since reporting and currently trades at $521.91.
Best Q2: 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 $42.68 million, up 217% year on year, outperforming analysts’ expectations by 31.2%. The business had an incredible quarter with an impressive beat of analysts’ billings estimates and a solid beat of analysts’ EBITDA estimates.
SoundHound AI achieved the biggest analyst estimates beat and fastest revenue growth among its peers. The market seems happy with the results as the stock is up 53% since reporting. It currently trades at $16.45.
Is now the time to buy SoundHound AI? Access our full analysis of the earnings results here, it’s free.
Slowest Q2: 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 $384.5 million, up 9.5% year on year, exceeding analysts’ expectations by 5.9%. 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.
Pegasystems delivered the slowest revenue growth in the group. Interestingly, the stock is up 2.5% since the results and currently trades at $52.25.
Read our full analysis of Pegasystems’s results here.
Appian (NASDAQ: APPN)
Founded by Matt Calkins and his three friends out of an apartment in Northern Virginia, Appian (NASDAQ: APPN) sells a software platform that lets its users build applications without using much code, allowing them to create new software more quickly.
Appian reported revenues of $170.6 million, up 16.5% year on year. This result topped analysts’ expectations by 6.7%. It was a strong quarter as it also produced a solid beat of analysts’ billings estimates and an impressive beat of analysts’ EBITDA estimates.
Appian scored the highest full-year guidance raise among its peers. The stock is up 10.8% since reporting and currently trades at $29.83.
Read our full, actionable report on Appian here, it’s free.
Jamf (NASDAQ: JAMF)
Founded in 2002 by Zach Halmstad and Chip Pearson, right around the time when Apple began to dominate the personal computing market, Jamf (NASDAQ: JAMF) provides software for companies to manage Apple devices such as Macs, iPads, and iPhones.
Jamf reported revenues of $176.5 million, up 15.3% year on year. This print surpassed analysts’ expectations by 4.7%. Overall, it was a very strong quarter as it also put up a solid beat of analysts’ annual recurring revenue estimates and an impressive beat of analysts’ billings estimates.
Jamf had the weakest full-year guidance update among its peers. The stock is up 14.3% since reporting and currently trades at $8.41.
Read our full, actionable report on Jamf here, it’s free.
Market Update
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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