Q1 productivity software stock split: Monday.com (NASDAQ:MNDY) vs. the rest

To wrap up first-quarter earnings, we look at the numbers and key takeaways for productivity software companies, including Monday.com ( NASDAQ:MNDY ) and its competitors.

Rising employee costs and the shift to more remote work have increased the pervasive pressure to improve enterprise productivity, which in turn is driving the growing demand for productivity software that enables remote work, streamlines project management and automates business tasks.

The 11 productivity software companies we track reported a mixed first quarter; revenues exceeded analyst consensus by an average of 1.6%. while revenue forecasts for the next quarter were in line with consensus. Stocks – especially those trading at higher multiples – had a strong end to 2023, but 2024 saw periods of volatility. Mixed signals on inflation led to uncertainty over interest rate cuts, and productivity software stocks held roughly steady, with share prices up an average of 1.6% from previous earnings results.

Monday.com (NASDAQ:MNDY)

Founded in Israel in 2014 and named after the dreaded first day of the workweek, Monday.com (NASDAQ:MNDY) creates software as service platforms that help teams effectively plan and track work.

Monday.com reported revenue of $216.9 million, up 33.7% year-over-year, beating analyst expectations by 3%. It was a good quarter for the company, with solid analyst ARR (annual recurring revenue) and billing estimates.

“The first quarter was another great step forward for monday.com, characterized by strong revenue growth and profitability, as well as record free cash flow. These results confirm the recent changes we have made to our pricing model, which have so far exceeded our initial expectations,” said Eliran Glazer, CFO of monday.com.

Monday.com achieved the fastest revenue growth and the highest full-year revenue growth in the entire group. The company added 196 enterprise customers paying more than $50,000 annually, bringing its total to 2,491 customers. Since the results were released, the company’s shares are up 34.2% and are currently trading at $243.66.

Read why we think Monday.com is one of the best productivity software providers. Our full report is free.

Top Q1: Atlassian (NASDAQ:TEAM)

Founded by Australian co-CEOs Mike Cannon-Brookes and Scott Farquhar in 2002, Atlassian (NASDAQ:TEAM) provides software as a service that helps large teams of developers manage projects, particularly in software development.

Atlassian reported revenue of $1.19 billion, up 29.9% year-over-year, which beat analyst expectations by 8.1%. It was a very good quarter for the company, with solid growth in analyst billing estimates and impressive growth in analyst revenue estimates.

The story continues

Atlassian was the highest in analyst estimates among its peers. Since the results were released, the company’s shares have fallen 14.9% and are currently trading at $169.

Is now the time to buy Atlassian? Access our full earnings performance analysis here, it’s free.

Weakest Quarter 1: Pegasystems (NASDAQ:PEGA)

Founded by Alan Trefler in 1983, Pegasystems (NASDAQ:PEGA) offers a software-as-a-service platform for automating and optimizing customer service and engagement workflows.

Pegasystems reported revenue of $330.1 million, up 1.4% year-over-year, or 2.1% below analyst expectations. It was a weak quarter for the company, with analyst revenue estimates missing and gross margin declining.

The weakest performance in the Pegasystems group compared to analyst estimates. Since the results were released, the company’s shares are up 1.1% and are currently trading at $59.50.

Read our full analysis of Pegasystems’ performance here.

RingCentral (NYSE:RNG)

Founded in 1999 during the dot-com era, RingCentral (NYSE:RNG) provides software-as-a-service that combines phone calls, texts, faxes, video calls and chats into a single platform.

RingCentral reported revenue of $584.2 million, up 9.5% year-over-year, beating analyst expectations by 1%. It was a mixed quarter for the company, with decent growth over analyst estimates for billings, but missing analyst estimates for ARR (annual recurring revenue).

Since the results were released, the company’s shares have increased by 15.7% and are currently trading at $34.7.

Read our full hands-on report on RingCentral here, it’s free.

Dropbox (NASDAQ:DBX)

Founded by longtime CEO Drew Houston and Arash Ferdowsi in 2007, Dropbox (NASDAQ:DBX) provides a cloud file storage platform that helps organizations collaborate and share documents.

Dropbox reported revenue of $631.3 million, up 3.3% year over year, in line with analyst expectations. It was a solid quarter for the company, characterized by accelerated customer growth and significant improvement in gross margin.

The company added 40,000 customers, reaching a total of 18.16 million. Since the results were released, the company’s shares have fallen 1.2% and are currently trading at $22.85.

Read our full hands-on report on Dropbox here. It is free of charge.

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