Three companies that recently posted quarterly results are worth watching.
Okta (OKTA), a cybersecurity firm, reported non-GAAP earnings of $0.91 a share. Revenue in Q1 rose by 11.2% Y/Y to $765 million. It issued Q2 and full-year revenue guidance that is higher than expectations. Moreover, strong subscription and RPO (bookings) of 11% and 16% Y/Y, respectively, suggest continued momentum ahead.
Elastic (ESTC), a search and analytics software firm, posted revenue of $450.68 million (+16% Y/Y). The sales team grew cloud commitments from customers in the quarter that were above historical levels. Customers also want automation, which drove sales in AI-related solutions. Since that contributed to 500 bps, Elastic has plenty of room to grow its revenue.
Automation firm UiPath (PATH) might continue its uptrend after reporting revenue of $418.38 million, up 17.3% Y/Y. Bears hold a substantial bet against PATH stock, with a short interest of 25%.
UiPath faced high churn from the smaller companies. Fortunately, its biggest customers saw value in the software, so it continued to grow. For shares to rise, the company needs to demonstrate that AI-driven workflows will scale. It will deliver on that through vertical integration and through its partners.
The risk for UiPath is that investors will prefer a pure AI play instead of AI achieved through third-party partnerships. That would limit the recent post-earnings rally.
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