A Look Back at Project Management Software Stocks’ Q2 Earnings: Smartsheet (NYSE:SMAR) Vs The Rest Of The Pack

Earnings results often indicate what direction a company will take in the months ahead. With Q2 behind us, let’s have a look at Smartsheet (NYSE:SMAR) 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 satisfactory Q2. As a group, revenues beat analysts’ consensus estimates by 1.2% 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, project management software stocks have been resilient with share prices up 9.1% on average since the latest earnings results.

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 print was in line with analysts’ expectations, and overall, it was a decent quarter for the company with accelerating growth in large customers.

"Q2 was a strong quarter highlighted by continued growth in the enterprise,” said Mark Mader, CEO of Smartsheet.

Interestingly, the stock is up 13.6% since reporting and currently trades at $56.02.

We think Smartsheet is a good business, but is it a buy today? Read our full report 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 full-year revenue guidance exceeding analysts’ expectations and a solid beat of analysts’ ARR (annual recurring revenue) estimates.

Monday.com scored the biggest analyst estimates beat and fastest revenue growth 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 26.7% since reporting. It currently trades at $286.03.

Is now the time to buy Monday.com? Access our full analysis of the earnings results here, it’s free.

Weakest Q2: 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 mixed quarter as it posted full-year revenue guidance exceeding analysts’ expectations but a miss of analysts’ billings estimates.

Asana delivered the slowest revenue growth and weakest full-year guidance update 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 13.4% since the results and currently trades at $11.50.

Read our full analysis of Asana’s results here.

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 result was in line with analysts’ expectations. More broadly, it was a satisfactory quarter. Atlassian exceeded analysts' billings expectations On the other hand, its full-year revenue guidance was below expectations.

Atlassian scored the highest full-year guidance raise but had the weakest performance against analyst estimates among its peers. The stock is up 9.3% since reporting and currently trades at $189.50.

Read our full, actionable report on Atlassian here, it’s free.

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