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Software companies that witnessed growth during the COVID-19 pandemic

The business world experienced a heavy wave of change this year due to the COVID-19 pandemic which led several companies to move their operations online and allow their employees to work remotely. This rapid digital transformation worked in favor of several software and cybersecurity companies who registered growth in their most recent quarters.

Coupa Software

Cloud company Coupa Software (NASDAQ: COUP) reported a 32% year-over-year increase in total revenue to nearly $126 million for the second quarter of 2021. The revenue growth was driven by an increase in the number of customers with annualized subscription revenue above $100,000. Subscription revenue, which makes up the majority of the top line, increased 34% while calculated billings increased 21%. Adjusted EPS jumped 200% to $0.21.

However, Coupa expects the operating environment to remain challenging in the third and fourth quarters of 2021 with a more broad recovery starting in the early New Year, as many of its customers and prospects operate cautiously making it difficult to predict the timing of deal closures.

For the third quarter of 2021, Coupa expects total revenues to be $123-124 million and adjusted EPS to be $0.02-0.03. Full-year 2021 revenues are expected to be $496.5-498.5 million and adjusted EPS is expected to be $0.43-0.45.

DocuSign

DocuSign Inc. (NASDAQ: DOCU), which helps companies manage agreements electronically, reported a 45% year-over-year increase in revenues to $342 million in Q2 2021. Subscription revenue, which comprises the majority, rose 47% while billings grew 61%. Adjusted EPS rose to $0.17 from $0.01 last year.

DocuSign expects total revenue to be $358-362 million for the third quarter of 2021 and $1.384-1.388 billion for the full year of 2021.

Cloudera

Data analytics company Cloudera Inc. (NYSE: CLDR) saw second quarter 2021 revenues increase 9% to $214 million, helped by a 17% growth in subscription revenue. Annualized recurring revenue grew 12%, with the number of customers who generate ARR in excess of $1 million growing 25%. The company reported adjusted EPS of $0.10 compared to a loss of $0.02 per share last year.

Cloudera expects revenues for third quarter 2021 to increase around 5% to $207-210 million. The company expects to see a slowdown in professional services revenue due to the pandemic and recession. Adjusted EPS is expected to be $0.08-0.10. For fiscal year 2021, revenues are expected to be $839-853 million while adjusted EPS is projected to be $0.32-0.35.

MongoDB

Database software company MongoDB Inc. (NASDAQ: MDB) reported a 39% increase in total revenues to $138 million in the second quarter of 2021. Subscription revenues increased 41%. Adjusted net loss narrowed to $0.22 per share from $0.26 per share last year.

The market for data-management software is expected to hit $71 billion this year creating more demand for sophisticated products. MongoDB expects revenues for the third quarter to be $137-139 million and adjusted net loss to be $0.48 to $0.45 per share. Fiscal year 2021 revenues are estimated to be $549-554 million and net loss is projected to be $1.29-1.21 per share.

CrowdStrike

Cybersecurity firm CrowdStrike Holdings Inc. (NASDAQ: CRWD) saw an 84% year-over-year increase in total revenue to $199 million in Q2 2021, helped by an 89% increase in subscription revenue. Net new subscription customers grew 91% year-over-year and annual recurring revenue rose 87%. The company reported adjusted EPS of $0.03 compared to a loss of $0.18 per share last year.

CrowdStrike remains optimistic about the demand for its offerings and given the exceptional strength seen in Q2, the company expects to see atypical seasonality in net new ARR moving into Q3.

For the third quarter of 2021, CrowdStrike expects total revenue to grow 68-72% to $210.6-215 million and adjusted earnings to range between a loss of $0.01 per share to breakeven. For fiscal year 2021, revenue is expected to be $809.1-826.7 million and adjusted EPS is expected to be $0.02-0.08.

Zscaler

Zscaler Inc. (NASDAQ: ZS), which also provides cybersecurity services, reported a 46% year-over-year increase in total revenue to $126 million for the fourth quarter of 2020. Calculated billings grew 55%. Although adjusted EPS dropped to $0.05 from $0.07 last year, it came ahead of analysts’ projections.

As the pandemic accelerates digital transformation, Zscaler is increasing investments in its business and pursuing additional market opportunities with its new products. For the first quarter of 2021, total revenue is expected to be $131-133 million and adjusted EPS is estimated to be approx. $0.05-0.06. For fiscal year 2021, the company forecasts total revenues of $580-590 million and adjusted EPS of $0.28-0.30.

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