The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how design software stocks fared in Q1, starting with Autodesk (NASDAQ:ADSK).
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 satisfactory Q1. As a group, revenues beat analysts’ consensus estimates by 2.5% while next quarter’s revenue guidance was in line.
Thankfully, share prices of the companies have been resilient as they are up 6% on average since the latest earnings results.
Best Q1: Autodesk (NASDAQ:ADSK)
Founded in 1982 by John Walker and growing into one of the industry's behemoths, Autodesk (NASDAQ:ADSK) makes computer-aided design (CAD) software for engineering, construction, and architecture companies.
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.
The stock is up 1.2% since reporting and currently trades at $298.33.
Is now the time to buy Autodesk? Access our full analysis of the earnings results here, it’s free.
Procore (NYSE:PCOR)
Used to manage the multi-year expansion of the Panama Canal that began in 2007, Procore (NYSE:PCOR) offers a software-as-service project, finance, and quality management platform for the construction industry.
Procore reported revenues of $310.6 million, up 15.3% year on year, outperforming analysts’ expectations by 2.6%. The business had a strong quarter with accelerating customer growth and a solid beat of analysts’ EBITDA estimates.
The market seems happy with the results as the stock is up 6.5% since reporting. It currently trades at $67.32.
Is now the time to buy Procore? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: Adobe (NASDAQ:ADBE)
One of the most well-known Silicon Valley software companies around, Adobe (NASDAQ:ADBE) is a leading provider of software as service in the digital design and document management space.
Adobe reported revenues of $5.71 billion, up 10.3% year on year, exceeding analysts’ expectations by 1%. Still, it was a mixed quarter as it posted EPS guidance for next quarter meeting analysts’ expectations.
Adobe delivered the weakest full-year guidance update in the group. As expected, the stock is down 5.8% since the results and currently trades at $413.50.
Read our full analysis of Adobe’s results here.
PTC (NASDAQ:PTC)
Used to design the Airbus A380 and Boeing 787 Dreamliner commercial airplanes, PTC’s (NASDAQ:PTC) software-as-service platform helps engineers and designers create and test products before manufacturing.
PTC reported revenues of $636.4 million, up 5.5% year on year. This result surpassed analysts’ expectations by 5%. Zooming out, it was a mixed quarter as it also logged a solid beat of analysts’ EBITDA estimates but EPS guidance for next quarter missing analysts’ expectations significantly.
PTC delivered the biggest analyst estimates beat and highest full-year guidance raise among its peers. The stock is up 9.5% since reporting and currently trades at $169.46.
Read our full, actionable report on PTC here, it’s free.
Unity (NYSE:U)
Started as a game studio by three friends in a Copenhagen apartment, Unity (NYSE:U) is a software as a service platform that makes it easier to develop and monetize new games and other visual digital experiences.
Unity reported revenues of $435 million, down 5.5% year on year. This print beat analysts’ expectations by 4.4%. More broadly, it was a mixed quarter as it also recorded an impressive beat of analysts’ billings estimates but revenue guidance for next quarter slightly missing analysts’ expectations.
Unity had the slowest revenue growth among its peers. The stock is up 21.6% since reporting and currently trades at $25.93.
Read our full, actionable report on Unity here, it’s free.
Market Update
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
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