Reflecting On Sales Software Stocks’ Q3 Earnings: ZoomInfo (NASDAQ:ZI)

As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q3. Today, we are looking at sales software stocks, starting with ZoomInfo (NASDAQ:ZI).

Companies need to be able to interact with and sell to their customers as efficiently as possible. This reality coupled with the ongoing migration of enterprises to the cloud drives demand for cloud-based customer relationship management (CRM) software that integrates data analytics with sales and marketing functions.

The 4 sales software stocks we track reported a satisfactory Q3. As a group, revenues beat analysts’ consensus estimates by 2.2% while next quarter’s revenue guidance was in line.

Luckily, sales software stocks have performed well with share prices up 13.1% on average since the latest earnings results.

Founded in 2007 as DiscoveryOrg and renamed after a merger in 2019, ZoomInfo (NASDAQ:ZI) is a software as a service product that provides sales departments with access to a database of prospective clients.

ZoomInfo reported revenues of $303.6 million, down 3.3% year on year. This print exceeded analysts’ expectations by 1.5%. Despite the top-line beat, it was still a mixed quarter for the company with full-year EPS guidance exceeding analysts’ expectations but decelerating growth in large customers.

“We continued our move up-market, fueled by ZoomInfo Copilot and Operations growth, and we delivered strong financial results while improving the quality of new customers that we are bringing in. The entire company is more focused than ever on delighting both our new and existing users via robust product innovation and customer obsession,” said Henry Schuck, ZoomInfo founder and CEO.

ZoomInfo delivered the slowest revenue growth of the whole group. The company added 12 enterprise customers paying more than $100,000 annually to reach a total of 1,809. Unsurprisingly, the stock is down 20.5% since reporting and currently trades at $10.41.

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

Started in 2006 by two MIT grad students, HubSpot (NYSE:HUBS) is a software-as-a-service platform that helps small and medium-sized businesses market themselves, sell, and get found on the internet.

HubSpot reported revenues of $669.7 million, up 20.1% year on year, outperforming analysts’ expectations by 3.5%. The business had a very strong quarter with a solid beat of analysts’ billings estimates and an impressive beat of analysts’ EBITDA estimates.

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HubSpot achieved the biggest analyst estimates beat and highest full-year guidance raise among its peers. The company added 10,074 customers to reach a total of 238,128. The market seems happy with the results as the stock is up 31% since reporting. It currently trades at $783.61.

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

Launched in 1999 from a rented one-bedroom apartment in San Francisco by Marc Benioff and his three co-founders, Salesforce (NYSE:CRM) is a software-as-a-service platform that helps companies access, manage, and share sales information such as leads.

Salesforce reported revenues of $9.44 billion, up 8.3% year on year, exceeding analysts’ expectations by 1%. Still, it was a mixed quarter as it posted EPS guidance for next quarter missing analysts’ expectations.

Salesforce delivered the weakest performance against analyst estimates and weakest full-year guidance update in the group. The stock is flat since the results and currently trades at $332.80.

Read our full analysis of Salesforce’s results here.

Founded in Chennai, India in 2010 with the idea of creating a “fresh” helpdesk product, Freshworks (NASDAQ: FRSH) offers a broad range of software targeted at small and medium-sized businesses.

Freshworks reported revenues of $186.6 million, up 21.5% year on year. This result beat analysts’ expectations by 2.8%. It was a strong quarter as it also produced a solid beat of analysts’ annual recurring revenue and EBITDA estimates.

Freshworks delivered the fastest revenue growth among its peers. The company added 615 enterprise customers paying more than $5,000 annually to reach a total of 22,359. The stock is up 41.3% since reporting and currently trades at $18.50.

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

Want to invest in winners with rock-solid fundamentals? Check out our 9 Best Market-Beating Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

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