Spotting Winners: Atlassian (NASDAQ:TEAM) And Project Management Software Stocks In Q2
Wrapping up Q2 earnings, we look at the numbers and key takeaways for the project management software stocks, including Atlassian (NASDAQ:TEAM) and its peers.
The future of work requires teams to collaborate across departments and remote offices. Project management software is both driving this change and benefiting from it. While the trend of collaborative work management has been strong for a while, the Covid pandemic has definitively accelerated the demand for tools that allow work to be done remotely.
The 4 project management software stocks we track reported a mixed Q2. As a group, revenues beat analysts’ consensus estimates by 1.2% while next quarter’s revenue guidance was in line.
Big picture, the Federal Reserve has a dual mandate of inflation and employment. The former had been running hot throughout 2021 and 2022 but cooled towards the central bank's 2% target as of late. This prompted the Fed to cut its policy rate by 50bps (half a percent) in September 2024. Given recent employment data that suggests the US economy could be wobbling, the markets will be assessing whether this rate and future cuts (the Fed signaled more to come in 2024 and 2025) are the right moves at the right time or whether they're too little, too late for a macro that has already cooled.
In light of this news, project management software stocks have held steady with share prices up 3.7% on average since the latest earnings results.
Weakest Q2: Atlassian (NASDAQ:TEAM)
Founded by Australian co-CEOs Mike Cannon-Brookes and Scott Farquhar in 2002, Atlassian (NASDAQ:TEAM) provides software as a service that makes it easier for large teams of software developers to manage projects, especially in software development.
Atlassian reported revenues of $1.13 billion, up 20.5% year on year. This print was in line with analysts’ expectations, but overall, it was a weaker quarter for the company with underwhelming revenue guidance for the next quarter and management forecasting growth to slow.
“We announced transformative innovations for our customers like Rovo, the latest human-AI technology reshaping the way we work. We achieved significant milestones like FedRAMP’s “In Process” status, a huge step towards supporting the U.S. public sector in the cloud, and we wound down support for Server,” said Mike Cannon-Brookes, Atlassian’s co-founder and co-CEO.
Atlassian delivered the weakest performance against analyst estimates and weakest full-year guidance update of the whole group. Unsurprisingly, the stock is down 3.3% since reporting and currently trades at $167.50.
Is now the time to buy Atlassian? Access our full analysis of the earnings results here, it’s free.
Best Q2: Monday.com (NASDAQ:MNDY)
Founded in Israel in 2014, and named after the dreaded first day of the work week, Monday.com (NASDAQ:MNDY) makes software as a service platform that helps teams plan and track work efficiently.
Monday.com reported revenues of $236.1 million, up 34.4% year on year, outperforming analysts’ expectations by 3%. The business had a strong quarter with a solid beat of analysts’ ARR (annual recurring revenue) estimates and full-year revenue guidance topping analysts’ expectations.
Monday.com pulled off the biggest analyst estimates beat, fastest revenue growth, and highest full-year guidance raise among its peers. The company added 222 enterprise customers paying more than $50,000 annually to reach a total of 2,713. The market seems happy with the results as the stock is up 22.5% since reporting. It currently trades at $276.56.
Is now the time to buy Monday.com? Access our full analysis of the earnings results here, it’s free.
Asana (NYSE:ASAN)
Founded in 2008 by Facebook’s co-founder Dustin Moskovitz, Asana (NYSE:ASAN) is a cloud-based project management software, where you can plan and assign tasks to employees and monitor and discuss progress of work.
Asana reported revenues of $179.2 million, up 10.3% year on year, in line with analysts’ expectations. It was a slower quarter as it posted a miss of analysts’ billings estimates and full-year revenue guidance missing analysts’ expectations.
Asana delivered the slowest revenue growth in the group. The company added 786 enterprise customers paying more than $5,000 annually to reach a total of 22,948. As expected, the stock is down 14.6% since the results and currently trades at $11.34.
Read our full analysis of Asana’s results here.
Smartsheet (NYSE:SMAR)
Founded in 2005, Smartsheet (NYSE:SMAR) is a software as a service platform that helps companies plan, manage and report on work.
Smartsheet reported revenues of $276.4 million, up 17.3% year on year. This number was in line with analysts’ expectations. Taking a step back, it was a mixed quarter as it also produced accelerating growth in large customers but full-year revenue guidance missing analysts’ expectations.
The company added 221 enterprise customers paying more than $5,000 annually to reach a total of 20,198. The stock is up 12.4% since reporting and currently trades at $55.41.
Read our full, actionable report on Smartsheet here, it’s free.
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