A Look Back at Automation Software Stocks’ Q2 Earnings: UiPath (NYSE:PATH) Vs The Rest Of The Pack

As the Q2 earnings season wraps, let’s dig into this quarter’s best and worst performers in the automation software industry, including UiPath (NYSE:PATH) and its peers.

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.

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 cut and future ones (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.

UiPath (NYSE:PATH)

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 exceeded analysts’ expectations by 4.1%. Overall, it was a strong quarter for the company with an impressive beat of analysts’ billings estimates and full-year revenue guidance topping analysts’ expectations.

“We are pleased with our second quarter results, with ARR growing 19 percent year-over-year, a testament to the team's improved execution and the compelling value that our AI-powered automation platform delivers to our customers,” said Daniel Dines, UiPath Founder and Chief Executive Officer.

UiPath pulled off the highest full-year guidance raise but had the slowest revenue growth of the whole group. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 1.3% since reporting and currently trades at $12.57.

Is now the time to buy UiPath? 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 scored the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 8.4% since reporting. It currently trades at $66.25.

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

Weakest Q2: 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 $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 9.4% since the results and currently trades at $33.51.

Read our full analysis of Appian’s results here.

ServiceNow (NYSE:NOW)

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 recorded accelerating growth in large customers and a solid beat of analysts’ billings estimates.

ServiceNow pulled off 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 23.8% since reporting and currently trades at $905.44.

Read our full, actionable report on ServiceNow 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 $153 million, up 13.3% year on year. This result met analysts’ expectations. Aside from that, it was a strong quarter as it also recorded a decent beat of analysts’ ARR (annual recurring revenue) estimates but a miss of analysts’ billings estimates.

The stock is up 9.9% since reporting and currently trades at $17.95.

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

Join Paid Stock Investor Research

Help us make StockStory more helpful to investors like yourself. Join our paid user research session and receive a $50 Amazon gift card for your opinions. Sign up here.