Wrapping up Q3 earnings, we look at the numbers and key takeaways for the automation software stocks, including Pegasystems (NASDAQ:PEGA) 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 strong Q3. As a group, revenues beat analysts’ consensus estimates by 4.4% while next quarter’s revenue guidance was in line.
Thankfully, share prices of the companies have been resilient as they are up 8% on average since the latest earnings results.
Best Q3: 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 $381.4 million, up 17.3% year on year. This print exceeded analysts’ expectations by 8.5%. Overall, it was a stunning quarter for the company with a solid beat of analysts’ billings estimates and an impressive beat of analysts’ EBITDA estimates.
Pegasystems scored the biggest analyst estimates beat of the whole group. Unsurprisingly, the stock is up 6% since reporting and currently trades at $60.45.
Is now the time to buy Pegasystems? Access our full analysis of the earnings results here, it’s free for active Edge members.
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 $183.5 million, up 15.2% year on year, outperforming analysts’ expectations by 3.4%. The business had an exceptional quarter with a solid beat of analysts’ billings estimates and an impressive beat of analysts’ EBITDA estimates.
The market seems content with the results as the stock is up 1% since reporting. It currently trades at $12.99.
Is now the time to buy Jamf? Access our full analysis of the earnings results here, it’s free for active Edge members.
Weakest Q3: 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 $42.05 million, up 67.6% year on year, exceeding analysts’ expectations by 2.7%. Still, it was a softer quarter as it posted a significant miss of analysts’ EBITDA estimates and a miss of analysts’ billings estimates.
As expected, the stock is down 11.1% since the results and currently trades at $12.76.
Read our full analysis of SoundHound AI’s results here.
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 $411.1 million, up 15.9% year on year. This result surpassed analysts’ expectations by 4.7%. Zooming out, it was a satisfactory quarter as it also logged a solid beat of analysts’ EBITDA estimates but a significant miss of analysts’ billings estimates.
The stock is up 28.7% since reporting and currently trades at $19.39.
Read our full, actionable report on UiPath here, it’s free for active Edge members.
Appian (NASDAQ:APPN)
Powering billions of transactions daily since its founding in 1999, Appian (NASDAQ:APPN) provides a low-code platform that helps businesses automate complex processes and operationalize artificial intelligence without extensive programming knowledge.
Appian reported revenues of $187 million, up 21.4% year on year. This print topped analysts’ expectations by 7.4%. Overall, it was a very strong quarter as it also recorded an impressive beat of analysts’ billings estimates and a solid beat of analysts’ EBITDA estimates.
The stock is up 47.3% since reporting and currently trades at $43.21.
Read our full, actionable report on Appian here, it’s free for active Edge members.
Market Update
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.
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