Reflecting On Sales Software Stocks' Q3 Earnings: ZoomInfo (NASDAQ:GTM)

As the Q3 earnings season wraps, let’s dig into this quarter’s best and worst performers in the sales software industry, including ZoomInfo (NASDAQ:GTM) and its peers.

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 strong Q3. As a group, revenues beat analysts’ consensus estimates by 2.6% while next quarter’s revenue guidance was in line.

Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 17.1% since the latest earnings results.

ZoomInfo (NASDAQ:GTM)

Operating a platform it calls "RevOS" - short for Revenue Operating System - ZoomInfo (NASDAQ:GTM) provides sales, marketing, and recruiting teams with business intelligence and analytics to identify prospects and deliver targeted outreach.

ZoomInfo reported revenues of $318 million, up 4.7% year on year. This print exceeded analysts’ expectations by 4.7%. Overall, it was a strong quarter for the company with EPS guidance for next quarter exceeding analysts’ expectations and full-year EPS guidance exceeding analysts’ expectations.

ZoomInfo scored the biggest analyst estimates beat but had the slowest revenue growth and slowest revenue growth of the whole group. The company added 3 enterprise customers paying more than $100,000 annually to reach a total of 1,887. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 25.6% since reporting and currently trades at $8.79.

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

Best Q3: Freshworks (NASDAQ:FRSH)

Starting as a customer service solution before expanding into a comprehensive software suite, Freshworks (NASDAQ:FRSH) provides AI-powered software-as-a-service solutions that help companies manage customer service, IT support, sales, and marketing functions.

Freshworks reported revenues of $215.1 million, up 15.3% year on year, outperforming analysts’ expectations by 3%. The business had a strong quarter with EPS guidance for next quarter exceeding analysts’ expectations and an impressive beat of analysts’ EBITDA estimates.

However, the results were likely priced into the stock as it’s traded sideways since reporting. Shares currently sit at $10.98.

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

Weakest Q3: HubSpot (NYSE:HUBS)

Born from the idea that traditional interruptive marketing was becoming less effective, HubSpot (NYSE:HUBS) provides an integrated platform that helps businesses attract, engage, and manage customer relationships through marketing, sales, service, and content management tools.

HubSpot reported revenues of $809.5 million, up 20.9% year on year, exceeding analysts’ expectations by 3%. It may have had the worst quarter among its peers, but its results were still good as it also locked in an impressive beat of analysts’ EBITDA estimates and full-year EPS guidance slightly topping analysts’ expectations.

As expected, the stock is down 34.3% since the results and currently trades at $305.41.

Read our full analysis of HubSpot’s results here.

Salesforce (NYSE:CRM)

With its cloud-based platform named after its stock ticker symbol CRM (Customer Relationship Management), Salesforce (NYSE:CRM) provides customer relationship management software that helps businesses connect with their customers across sales, service, marketing, and commerce.

Salesforce reported revenues of $10.26 billion, up 8.6% year on year. This print met analysts’ expectations. Overall, it was a strong quarter as it also put up full-year EPS guidance exceeding analysts’ expectations and a solid beat of analysts’ EBITDA estimates.

Salesforce pulled off the highest full-year guidance raise but had the weakest performance against analyst estimates among its peers. The stock is down 8% since reporting and currently trades at $220.00.

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

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