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 7 automation software stocks we track reported a very strong Q2. As a group, revenues beat analysts’ consensus estimates by 8.4% while next quarter’s revenue guidance was in line.
Luckily, automation software stocks have performed well with share prices up 11.2% on average since the latest earnings results.
UiPath (NYSE:PATH)
Starting with robotic process automation (RPA) and evolving into a comprehensive automation powerhouse, UiPath (NYSE:PATH) provides an AI-powered business automation platform that enables organizations to create software robots that mimic human actions to streamline repetitive tasks and processes.
UiPath reported revenues of $361.7 million, up 14.4% year on year. This print exceeded analysts’ expectations by 4.1%. Overall, it was a satisfactory quarter for the company with a solid beat of analysts’ EBITDA estimates but a significant miss of analysts’ billings estimates.
Interestingly, the stock is up 5.9% since reporting and currently trades at $11.46.
Is now the time to buy UiPath? Access our full analysis of the earnings results here, it’s free.
Best Q2: SoundHound AI (NASDAQ:SOUN)
Born from the idea that machines should understand human speech as naturally as people do, SoundHound AI (NASDAQ:SOUN) develops voice recognition and conversational intelligence technology that enables businesses to integrate voice assistants into their products and services.
SoundHound AI reported revenues of $42.68 million, up 217% year on year, outperforming analysts’ expectations by 31.2%. The business had an incredible quarter with an impressive beat of analysts’ billings estimates and a solid beat of analysts’ EBITDA estimates.
SoundHound AI achieved the biggest analyst estimates beat and fastest revenue growth among its peers. The market seems happy with the results as the stock is up 31.3% since reporting. It currently trades at $14.12.
Is now the time to buy SoundHound AI? Access our full analysis of the earnings results here, it’s free.
Pegasystems (NASDAQ:PEGA)
With a "Center-out Business Architecture" approach that transcends organizational silos, Pegasystems (NASDAQ:PEGA) develops software that helps organizations automate workflows and use artificial intelligence to improve customer experiences and business processes.
Pegasystems reported revenues of $384.5 million, up 9.5% year on year, exceeding analysts’ expectations by 5.9%. It may have had the worst quarter among its peers, but its results were still good as it also locked in a solid beat of analysts’ EBITDA estimates.
Pegasystems delivered the slowest revenue growth in the group. Interestingly, the stock is up 9.5% since the results and currently trades at $55.80.
Read our full analysis of Pegasystems’s results here.
Jamf (NASDAQ:JAMF)
With its name playfully derived from "Just Another Management Framework," Jamf (NASDAQ:JAMF) provides software that helps organizations deploy, manage, and secure Apple devices across their workforce while maintaining a seamless user experience.
Jamf reported revenues of $176.5 million, up 15.3% year on year. This number topped analysts’ expectations by 4.7%. Overall, it was a very strong quarter as it also produced a solid beat of analysts’ annual recurring revenue estimates and an impressive beat of analysts’ billings estimates.
Jamf had the weakest full-year guidance update among its peers. The stock is up 27% since reporting and currently trades at $9.35.
Read our full, actionable report on Jamf here, it’s free.
Microsoft (NASDAQ:MSFT)
Originally named "Micro-soft" for microcomputer software when founded in 1975, Microsoft (NASDAQ:MSFT) is a global technology company that develops software, cloud services, devices, and AI solutions for consumers, businesses, and organizations worldwide.
Microsoft reported revenues of $76.44 billion, up 18.1% year on year. This print surpassed analysts’ expectations by 3.5%. It was an exceptional quarter as it also recorded a narrow beat of analysts’ revenue estimates, as Personal Computing, Intelligent Cloud, and Business Services all beat and a solid beat of analysts’ operating income estimates.
The stock is down 3.7% since reporting and currently trades at $494.94.
Read our full, actionable report on Microsoft here, it’s free.
Market Update
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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