Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Autodesk (NASDAQ: ADSK) and the best and worst performers in the design software industry.
The demand for rich, interactive 2D, 3D, VR and AR experiences is growing, and while the ubiquitous metaverse might still be more of a buzzword than a real thing, what is real is the demand for the tools to create these experiences, whether they are games, 3D tours or interactive movies.
The 6 design software stocks we track reported a very strong Q1. As a group, revenues beat analysts’ consensus estimates by 3.7% while next quarter’s revenue guidance was in line.
In light of this news, share prices of the companies have held steady as they are up 1.2% on average since the latest earnings results.
Autodesk (NASDAQ: ADSK)
Starting with AutoCAD in the 1980s and evolving into a comprehensive design ecosystem, Autodesk (NASDAQ: ADSK) provides software solutions for architecture, engineering, construction, manufacturing, and entertainment industries to design, simulate, and visualize projects.
Autodesk reported revenues of $1.63 billion, up 15.2% year on year. This print exceeded analysts’ expectations by 1.7%. Overall, it was a very strong quarter for the company with EPS guidance for next quarter exceeding analysts’ expectations and an impressive beat of analysts’ EBITDA estimates.
"Against an uncertain geopolitical, macroeconomic, and policy backdrop, our strong performance in the first quarter of fiscal 26 set us up well for the year," said Andrew Anagnost, Autodesk president and CEO.
Unsurprisingly, the stock is down 2.7% since reporting and currently trades at $287.
We think Autodesk is a good business, but is it a buy today? Read our full report here, it’s free.
Best Q1: PTC (NASDAQ: PTC)
Originally known as Parametric Technology Corporation until its 2013 rebranding, PTC (NASDAQ: PTC) provides software that helps manufacturers design, develop, and service physical products through digital solutions for CAD, PLM, ALM, and SLM.
PTC reported revenues of $643.9 million, up 24.2% year on year, outperforming analysts’ expectations by 10.4%. The business had an exceptional quarter with EPS guidance for next quarter exceeding analysts’ expectations and a solid beat of analysts’ EBITDA estimates.
PTC pulled off the biggest analyst estimates beat, fastest revenue growth, and highest full-year guidance raise among its peers. The market seems happy with the results as the stock is up 7.5% since reporting. It currently trades at $218.50.
Is now the time to buy PTC? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: Unity (NYSE: U)
Powering over half of the world's mobile games and expanding into industries from automotive to architecture, Unity (NYSE: U) provides software tools and services that allow developers to create, run, and monetize interactive 2D and 3D content across multiple platforms.
Unity reported revenues of $440.9 million, down 1.9% year on year, exceeding analysts’ expectations by 3.1%. 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’ billings estimates and an impressive beat of analysts’ EBITDA estimates.
Unity delivered the slowest revenue growth in the group. Interestingly, the stock is up 17.9% since the results and currently trades at $40.05.
Read our full analysis of Unity’s results here.
Cadence Design Systems (NASDAQ: CDNS)
Powering the chips behind everything from smartphones to AI accelerators for over 35 years, Cadence Design Systems (NASDAQ: CDNS) provides essential computational software, hardware, and intellectual property used by engineers to design and verify advanced electronic systems and semiconductors.
Cadence Design Systems reported revenues of $1.28 billion, up 20.2% year on year. This print surpassed analysts’ expectations by 1.8%. Overall, it was a very strong quarter as it also put up an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ billings estimates.
The stock is up 4.1% since reporting and currently trades at $347.48.
Read our full, actionable report on Cadence Design Systems here, it’s free.
Procore Technologies (NYSE: PCOR)
With a mission to build software for the people that build the world, Procore Technologies (NYSE: PCOR) provides cloud-based software that enables owners, contractors, and other stakeholders to collaborate and manage construction projects from any device.
Procore Technologies reported revenues of $323.9 million, up 13.9% year on year. This result beat analysts’ expectations by 3.9%. It was a strong quarter as it also produced an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ annual recurring revenue estimates.
The company added 195 customers to reach a total of 17,501. The stock is down 5.8% since reporting and currently trades at $67.20.
Read our full, actionable report on Procore Technologies 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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