A Look Back at Automation Software Stocks' Q3 Earnings: UiPath (NYSE:PATH) Vs The Rest Of The Pack
As automation software stocks’ Q3 earnings season wraps, let's dig into this quarter's best and worst performers, 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 6 automation software stocks we track reported a solid Q3; on average, revenues beat analyst consensus estimates by 3.4% while next quarter's revenue guidance was 1.1% below consensus. Stocks have been under pressure as inflation (despite slowing) makes their long-dated profits less valuable, but automation software stocks held their ground better than others, with the share prices up 17.9% on average since the previous earnings results.
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 $325.9 million, up 24% year on year, topping analyst expectations by 3.3%. It was a decent quarter for the company, with ARR (annual recurring revenue), reported revenue, and non-GAAP operating profit exceeding expectations. Guidance for next quarter was fine, with ARR ahead while revenue and non-GAAP operating profit were roughly in line.
“I am pleased with our strong third quarter results with ARR growing 24 percent year-over-year to $1.378 billion, driven by the team’s execution and the transformational results we deliver,” said Rob Enslin, UiPath Co-Chief Executive Officer.
The stock is up 21.5% since the results and currently trades at $24.
Is now the time to buy UiPath? Access our full analysis of the earnings results here, it's free.
Best Q3: 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 $334.6 million, up 23.6% year on year, outperforming analyst expectations by 12.8%. It was an incredible quarter for the company, with a significant improvement in its gross margin and an impressive beat of analysts' revenue estimates.
Pegasystems pulled off the biggest analyst estimates beat among its peers. The stock is up 20.8% since the results and currently trades at $45.95.
Is now the time to buy Pegasystems? Access our full analysis of the earnings results here, it's free.
Weakest Q3: 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 $137.1 million, up 16.3% year on year, exceeding analyst expectations by 1.3%. It was a slower quarter for the company, with underwhelming revenue guidance for the next quarter and full-year.
The stock is down 17.5% since the results and currently trades at $34.4.
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 $2.29 billion, up 25% year on year, in line with analyst expectations. It was a very strong quarter for the company, with accelerating growth in large customers and a narrow beat of analysts' revenue estimates .
ServiceNow pulled off the fastest revenue growth among its peers. The company added 65 enterprise customers paying more than $1m annually to reach a total of 1,789. The stock is up 45.5% since the results and currently trades at $772.
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 $142.6 million, up 14.5% year on year, surpassing analyst expectations by 1.8%. It was a mixed quarter for the company, with a decline in its gross margin and underwhelming revenue guidance for the next quarter.
Jamf achieved the highest full-year guidance raise among its peers. The stock is up 21.4% since the results and currently trades at $19.65.
Read our full, actionable report on Jamf here, it's free.
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The author has no position in any of the stocks mentioned
