Looking back on sales and marketing software stocks’ Q2 earnings, we examine this quarter’s best and worst performers, including Upland (NASDAQ:UPLD) and its peers.
The Internet and the exploding amount of data have transformed how businesses interact with, market to, and transact with their customers. Personalization of offerings, e-commerce, targeted advertising and data-empowered sales teams are now table stakes for modern businesses, and sales and marketing software providers are becoming the tools of evolving customer interaction.
The 23 sales and marketing software stocks we track reported a strong 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, sales and marketing software stocks have been resilient with share prices up 8.7% on average since the latest earnings results.
Upland (NASDAQ:UPLD)
Founder Jack McDonald’s second software rollup, Upland Software (NASDAQ:UPLD) is a one stop shop for sales and marketing software, project management, HR, and contact center services for small and medium sized businesses.Upland reported revenues of $69.34 million, down 6.9% year on year. This print exceeded analysts’ expectations by 2.3%. Despite the top-line beat, it was still a mixed quarter with revenue guidance for the next quarter falling below analysts' expectations.
"In Q2, we beat our revenue and Adjusted EBITDA guidance midpoints and posted Core Bookings in excess of Core Churn for the second quarter in a row," said Jack McDonald, Upland's chairman and chief executive officer.
Upland delivered the weakest full-year guidance update of the whole group. Interestingly, the stock is up 4.1% since reporting and currently trades at $2.40.
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Best Q2: Zeta (NYSE:ZETA)
Co-founded by former Apple (NASDAQ:AAPL) CEO John Scully, Zeta Global (NYSE:NYSE:ZETA) provides software and data analytics tools that help companies market their products to billions of customers.Zeta reported revenues of $227.8 million, up 32.6% year on year, outperforming analysts’ expectations by 7.2%. The business had an exceptional quarter with an impressive beat of analysts’ billings estimates and full-year revenue guidance exceeding analysts’ expectations.
Zeta delivered the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 28.4% since reporting. It currently trades at $27.57.
Weakest Q2: PubMatic (NASDAQ:PUBM)
Founded in 2006 as an online ad platform helping ad sellers, Pubmatic (NASDAQ: NASDAQ:PUBM) is a fully integrated cloud-based programmatic advertising platform.PubMatic reported revenues of $67.27 million, up 6.2% year on year, falling short of analysts’ expectations by 4.1%. It was a slower quarter, leaving some shareholders looking for more.
As expected, the stock is down 23% since the results and currently trades at $15.10.
Squarespace (NYSE:NYSE:SQSP)
Founded in New York City in 2003, Squarespace (NYSE:SQSP) is a platform for small businesses and creators to build their digital presences online.Squarespace reported revenues of $296.8 million, up 19.9% year on year. This print surpassed analysts’ expectations by 1.2%. It was a strong quarter as it also logged an impressive beat of analysts’ billings estimates and a decent beat of analysts’ ARR (annual recurring revenue) estimates.
The stock is up 6.3% since reporting and currently trades at $46.85.
Sprout Social (NASDAQ:SPT)
Founded by Justyn Howard and Aaron Rankin in 2010, Sprout Social (NASDAQ:SPT) provides a software as a service platform that companies can use to schedule and respond to posts on major social media networks like Twitter, Facebook (NASDAQ:META), Instagram, Youtube and LinkedIn.Sprout Social reported revenues of $99.4 million, up 25.3% year on year. This number met analysts’ expectations. It was a strong quarter as it also delivered an impressive beat of analysts’ billings estimates.
The company added 143 enterprise customers paying more than $10,000 annually to reach a total of 8,966. The stock is down 24.7% since reporting and currently trades at $28.14.
This content was originally published on Stock Story
