Q2 Earnings Outperformers: Box (NYSE:BOX) And The Rest Of The Productivity Software Stocks
As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q2. Today, we are looking at productivity software stocks, starting with Box (NYSE:BOX).
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 16 productivity software stocks we track reported a mixed Q2. As a group, revenues beat analysts’ consensus estimates by 1.7% while next quarter’s revenue guidance was 0.5% below.
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.
In light of this news, productivity software stocks have held steady with share prices up 3.8% on average since the latest earnings results.
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 $270 million, up 3.3% year on year. This print was in line with analysts’ expectations, and overall, it was a strong quarter for the company with an impressive beat of analysts’ billings estimates and a meaningful improvement in its gross margin.
Interestingly, the stock is up 11.5% since reporting and currently trades at $32.15.
Is now the time to buy Box? Access our full analysis of the earnings results here, it’s free.
Best 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 $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 delivered the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 12.3% since reporting. It currently trades at $68.63.
Is now the time to buy Pegasystems? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: 8x8 (NASDAQ:EGHT)
Founded in 1987, 8x8 (NYSE:EGHT) provides software for organizations to efficiently communicate and collaborate with their customers, employees, and partners.
8x8 reported revenues of $178.1 million, down 2.8% year on year, in line with analysts’ expectations. It was a softer quarter as it posted underwhelming revenue guidance for the next quarter and a miss of analysts’ billings estimates.
8x8 delivered the weakest performance against analyst estimates and slowest revenue growth in the group. As expected, the stock is down 14.7% since the results and currently trades at $2.20.
Read our full analysis of 8x8’s results here.
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 $634.5 million, up 1.9% year on year. This result met analysts’ expectations. Zooming out, it was a mixed quarter as it also recorded accelerating customer growth but a miss of analysts’ billings estimates.
The company added 60,000 customers to reach a total of 18.22 million. The stock is up 15.6% since reporting and currently trades at $25.13.
Read our full, actionable report on Dropbox here, it’s free.
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 $736 million, up 7% year on year. This print beat analysts’ expectations by 1.1%. However, it was a mixed quarter as it underperformed in some other aspects of the business.
The stock is up 12.3% since reporting and currently trades at $63.89.
Read our full, actionable report on DocuSign here, it’s free.
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