Earnings results often indicate what direction a company will take in the months ahead. With Q1 behind us, let’s have a look at Salesforce (NYSE: CRM) 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 Q1. As a group, revenues beat analysts’ consensus estimates by 2.1% while next quarter’s revenue guidance was in line.

While some sales software stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 3.4% since the latest earnings results.

Salesforce (NYSE: CRM)

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 $9.83 billion, up 7.6% year on year. This print exceeded analysts’ expectations by 0.8%. Overall, it was a strong quarter for the company with a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ billings estimates.

Salesforce delivered the weakest performance against analyst estimates of the whole group. Unsurprisingly, the stock is down 1.7% since reporting and currently trades at $271.65.

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

Best Q1: Freshworks (NASDAQ: FRSH)

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 $196.3 million, up 18.9% year on year, outperforming analysts’ expectations by 2.1%. The business had a strong quarter with accelerating growth in large customers and a solid beat of analysts’ EBITDA estimates.

Freshworks delivered the fastest revenue growth among its peers. The company added 717 enterprise customers paying more than $5,000 annually to reach a total of 23,275. The market seems content with the results as the stock is up 4.4% since reporting. It currently trades at $14.98.

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

Weakest Q1: ZoomInfo (NASDAQ: ZI)

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 $305.7 million, down 1.4% year on year, exceeding analysts’ expectations by 3.2%. 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’ annual recurring revenue estimates.

ZoomInfo delivered the biggest analyst estimates beat but had the slowest revenue growth and weakest full-year guidance update in the group. The company added 1 enterprise customer paying more than $100,000 annually to reach a total of 1,868. The stock is flat since the results and currently trades at $10.28.

Read our full analysis of ZoomInfo’s results here.

HubSpot (NYSE: HUBS)

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 $714.1 million, up 15.7% year on year. This result surpassed analysts’ expectations by 2%. Overall, it was a strong quarter as it also put up an impressive beat of analysts’ billings estimates and a solid beat of analysts’ EBITDA estimates.

HubSpot scored the highest full-year guidance raise among its peers. The company added 10,319 customers to reach a total of 258,258. The stock is down 15.5% since reporting and currently trades at $557.

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

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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