The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how automation software stocks fared in Q2, starting with Jamf (NASDAQ:JAMF).
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 5 automation software stocks we track reported a satisfactory Q2. As a group, revenues beat analysts’ consensus estimates by 3.3% while next quarter’s revenue guidance was in line.
After much suspense, the Federal Reserve cut its policy rate by 50bps (half a percent) in September 2024. This marks the central bank’s first easing of monetary policy since 2020 and the end of its most pointed inflation-busting campaign since the 1980s. Inflation had begun to run hot in 2021 post-COVID due to a confluence of factors such as supply chain disruptions, labor shortages, and stimulus spending. While CPI (inflation) readings have been supportive lately, employment measures have prompted some concern. Going forward, the markets will debate whether this rate cut (and more potential ones in 2024 and 2025) is perfect timing to support the economy or a bit too late for a macro that has already cooled too much.
Thankfully, automation software stocks have been resilient with share prices up 8.7% on average since the latest earnings results.
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 $153 million, up 13.3% year on year. This print was in line with analysts’ expectations, but overall, it was a mixed quarter for the company with a decent beat of analysts’ ARR (annual recurring revenue) estimates but a miss of analysts’ billings estimates.
Jamf Total Revenue
Interestingly, the stock is up 5.8% since reporting and currently trades at $17.27.
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 $351.2 million, up 17.7% year on year, outperforming analysts’ expectations by 8.1%. The business had a stunning quarter with an impressive beat of analysts’ billings estimates and an improvement in its gross margin.
Pegasystems Total Revenue
Pegasystems achieved the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 21.7% since reporting. It currently trades at $74.40.
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 $146.5 million, up 14.7% year on year, exceeding analysts’ expectations by 2.5%. Still, it was a softer quarter as it posted a miss of analysts’ billings estimates and full-year revenue guidance missing analysts’ expectations.
Appian delivered the weakest full-year guidance update in the group. As expected, the stock is down 7% since the results and currently trades at $34.40.
Started in 2005 in Romania as a tech outsourcing company, UiPath (NYSE:PATH) makes software that helps companies automate repetitive computer tasks.
UiPath reported revenues of $316.3 million, up 10.1% year on year. This print topped analysts’ expectations by 4.1%. Overall, it was a strong quarter as it also recorded an impressive beat of analysts’ billings estimates and full-year revenue guidance topping analysts’ expectations.
UiPath scored the highest full-year guidance raise but had the slowest revenue growth among its peers. The stock is flat since reporting and currently trades at $12.80.
Founded by Fred Luddy, who wrote the code for the company's initial prototype on a flight from San Francisco to London, ServiceNow (NYSE:NOW) offers a software-as-a-service platform that helps companies become more efficient by allowing them to automate workflows across IT, HR, and customer service.
ServiceNow reported revenues of $2.63 billion, up 22.2% year on year. This print was in line with analysts’ expectations. Overall, it was a strong quarter as it also put up accelerating growth in large customers and a solid beat of analysts’ billings estimates.
ServiceNow achieved the fastest revenue growth but had the weakest performance against analyst estimates among its peers. The company added 55 enterprise customers paying more than $1m annually to reach a total of 1,988. The stock is up 22.5% since reporting and currently trades at $895.99.
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