ETR's Earnings Calendar Data Review

Week of Feb 26, 2024

ETR Research | Erik Bradley  

| February 23, 2024

Earnings season is heating up, with several big-name companies already posting soft guidance. ETR has nearly 20 covered tech vendors reporting next week, and in this article, we highlight the most recent data inflections on Workday, Jamf, Okta, Zscaler, Dell, and Elastic. However, please see the ETR Research Platform for full spending intentions data sets for other reporting companies such as Zoom, Salesforce, Hewlett Packard, Nutanix, Pure Storage, and many more. The ETR platform tracks forward-looking spending data, market growth, and competitive positioning data for more than 450 public companies!

The data cited in this article is from ETR's January 2024 Technology Spending Intentions Survey (TSIS). You can start a free trial today to access the data and research for yourself. Let's get started with Workday.

Workday. At 36.1% in the most recent survey period, Workday's Net Score (spending intentions trajectory) rebounded from the all-time lows seen in our previous survey periods. However, it still sits at the lowest full-year level captured in our work. The year-over-year (y/y) decline in Net Score can be attributed to rising negative response rates, including churn indications that have risen to 5%, which is a new high level of expected Replacements seen historically in the Workday dataset. Despite the declines, Workday’s Net Score remains above the Enterprise Apps sector Net Score of 18.1% and the overall TSIS Survey Net Score of 23.1%. Another bright spot for the vendor comes from the deep-pocketed Global 2000 demographic. Within Workday’s Global 2000 respondent base, we captured a y/y increase in Net Score driven primarily by climbing Adoption indications, reaching 13%, which is the highest seen since APR22 within the index.

Tracking the different product lines, we see that the y/y Net Score decline among All Respondents is notably driven by double-digit declines across both Financial Management and Adaptive Planning. Meanwhile, the stability in y/y metrics among core Human Capital Management (HCM) respondents is a highlight of the dataset. The HCM rebound in Net Score is sequentially highlighted by Adoption indications rising by three percentage points (ppts) from OCT23 in that segment. You can see the product line trends illustrated in the data visualization below. After reviewing the most recent January 2024 TSIS data, the ETR Research team wrote, "Workday’s consolidated Net Score remains lower y/y despite a sequential rise from all-time lows seen in OCT23. Rising negative response rates, including elevated churn indications, are impacting y/y metrics. Large y/y declines for Adaptive Planning and Financial Management offset stability in core HCM along with improving Global 2000 metrics."

Workday is expected to report earnings on Monday, February 26th, and shares have now risen above post-pandemic highs of 2021, reaching all-time highs. While the JAN24 data set did not warrant a negative outlook, the softening trend of forward-looking spending intentions our data has captured since last year is notable and concerning.

Jamf. Next up, we transition from a mega-cap SaaS play to a small-cap mobile device management player whose niche is explicitly tied to Apple OS devices. Why, you ask? Because it is the next company on this list that reports in chronological order and because the vendor's data set was so outstanding, it warranted a positive outlook during the JAN24 TSIS period. Let's dive into Jamf's most recent data.

Every so often, an unexpected data story arises from ETR's surveys; this year, that story was Jamf. In this instance, the data was favorable on numerous layers, all pointing to a beneficial backdrop for the company. In the JAN24 TSIS survey, the Unified Endpoint Management sector-wide Net Score increased from 22% to 27% since the prior survey period. The PC / Tablet / Laptop sector also captured a sizeable increase in its Net Score, rising sequentially from 14% to 20%, a significant jump of 25%. Further, the Net Score for Apple Laptops and iPads jumped from 27% to 34% and 17% to 27%, respectively. Amidst that auspicious backdrop of rising mobile device spending, with strong Apple participation, in tandem with increasing spending intent within the Unified Endpoint Management sector, we analyze an ascending and healthy data set for Jamf, a vendor that is primarily focused on endpoints for Apple's mobile devices.

Jamf's aggregate Net Score across all respondents for the JAN24 TSIS survey came in at 48%, a ten percentage-point increase from JAN23 levels, driven by gains in both Adoption and Increase indications. However, the vendor fared even better among certain demographic cuts. For instance, when isolating C-Suite level respondents, Jamf's Net Score rises from 48% to 59%, a number that ranked as the 6th highest unique vendor ranking across the entire TSIS survey universe (N > 30). Higher still, among Mid & Small respondents, which accounted for 31% of the vendor's total citations, Net Score reached astronomic levels above 70%, driven by a 23% Adoption rate.

Following its robust Net Score growth, Jamf now sits in 2nd place across the entire Unified Endpoint Management sector, trailing only Microsoft by a slim margin. Lastly, using ETR's proprietary shared accounts analysis, we see that among survey respondents citing positive alignment in Apple's mobile devices (laptops and iPads), Jamf's Net Score is very elevated at 57%. It should be noted that the Net Score among this subsample aligned positively with Apple, which is rising year-over-year and higher than Jamf's aggregate Net Score of 48% across all respondents.

In sum, the rising Net Score levels across all respondents and key customer accounts and positive alignment with Apple's strong forward-looking spending trends warrant a positive outlook on Jamf's data set to begin 2024. We shall see if the favorable data results in a strong print and/or guide when the company reports earnings on Tuesday, February 27th.

Okta. Okta reports earnings next Wednesday, February 28th. When we look at the data, we see a best-of-breed vendor that has shown resilience in the face of multiple high-profile breaches. However, one does wonder how long that Teflon exterior can last amidst intensifying competitive pressure and price sensitivity, especially with the ubiquitous Microsoft Entra ID continuing its steady and inevitable march into enterprise accounts. ETR recently published a full Observatory report on Identity Access tools that can be read for free here. 

Turning our attention to ETR's data, in the prior OCT23 survey period, the ETR research team wrote that "despite an aggregate Net Score that was touching new lows, strong positioning in Global 2000 and F500 accounts cautiously retained the Positive outlook on the vendor for the remainder of 2023 as we awaited JAN24 data for further directionality." Well, in the most recent survey period, the declining trend continued in the JAN24 data set, and this time, it included the Global 2000 and F500 accounts. The aggregate Net Score across all respondents for Okta and Auth0 sits at 35% vs the 47% level captured 12 months ago and down from the prior survey to new all-time lows. Isolating to Global 2000 respondents (shown below), which was 24% of the vendor’s total citations in this survey, Net Score is 35%, a severe drop from prior survey levels of 46%. Although not as large a representation, F500 respondents accounted for 18% of Okta’s total citations in this survey period. This cohort has the same rate of decline, with Net Score dropping to 32%, down from 42%. The Net Score for both large customer demographics has reached all-time lows in our work, driven by declines in both Adoptions and spend Increase intents, as well as record-high Decrease and Replacement intent.

In sum, this data set demonstrates a continuation of the declining trend captured in the prior survey period, with key Global 2000 and F500 accounts seeing the largest sequential declines, resulting in new all-time lows for Okta’s Net Score. Despite maintaining a relatively strong positioning within the information security sector, declining spending intentions and rising negativity can no longer be ignored, resulting in the removal of the Positive outlook on the vendor’s data set. The company is scheduled to report earnings next Wednesday, February 28th.

Zscaler. Despite a recent dramatic drop in share price for Zscaler (that seemingly was in sympathy with Palo Alto's report), ETR's data shows a divergent forward-looking spending intent between the two security players. While Palo is well positioned for a long game that drives a security platform play, our data showed a foreshadowing of easing demand that we wrote about in last week's newsletter in this article. Meanwhile, Zscaler is still viewed as a best-of-breed solution for ZTNA (among other solutions). While time will tell how point solutions fare against the omnipresent push toward platform offerings in the long run, for right now, many best-of-breed players are still performing well in the enterprise. Let's take a look at the data.

In the most recent JAN24 TSIS data, the ETR Research team noted that Zscaler remains a top performer in the Information Security sector entering 2024, screening the 6th highest aggregate Net Score (39%) across all vendors with 50+ citations. This trails only Microsoft, CrowdStrike, Wiz, Cloudflare, and HashiCorp. Zscaler’s Net Score is particularly elevated among Global 1000/2000, Fortune 1000, and IT/Telco organizations, all of which boast high budgets. When isolating to Global 2000 organizations, Zscaler’s Net Score leads most sector peers and shows y/y improvement from 34% to 42%. After the data settles, our take is that the continued strength in large index cuts is enough to maintain a positive view of Zscaler’s data set while noting some pockets of softness that we will closely monitor going forward. The company is taking advantage of leap year and reporting on Thursday, February 29th.

Elastic. For this week's highlighted vendor data sets, we wrap up with a positive data set on an Observability player that seemingly is winning business with its end-user-friendly pricing flexibility. Back in 2023, ETR called the Observability ingestion model a race to the bottom, and we caught a flurry of flack for saying so; however, despite admitting a lack of sensitivity on the delivery, the data continues to support the notion of a widening disparity between vendors favoring those with freemium level models. Let's take a closer look at the data,

In the January 2023 TSIS survey period, based on longer-term declines in aggregate Net Score, growing Replacement rates, and weakening competitive positioning, ETR removed the positive outlook on Elastic’s data set amidst the broader backdrop of an Observability peer group in free fall. In the January 2024 survey, Elastic (and Grafana) bucked the declining trend that is still pressuring its peers to capture a Net Score inflection point higher as well as taking a leading position among its Observability peers. On an aggregate basis across both sectors where we track the vendor and among all respondents, Elastic’s Net Score came in at 36.5%, higher than last year’s levels of 33% captured in April. Over the last two survey periods, the Net Score has trended positively by four percentage points, driven by Flat spending transitioning to Increase indications. Isolating to Global 2000 respondents across both sectors where we track the vendor, Net Score was 35%, following a sizeable increase from 25% over the last twelve months

In ETR’s proprietary shared accounts analysis, we see that among all Datadog and Splunk respondents, Elastic is very well positioned in both sectors we track these three Observability vendors. Among Datadog and Splunk accounts within the Analytics / Big Data sector, Elastic had a citation overlap of 23% with a strong Net Score of 44%, which is rising quickly from prior year levels. Within the Information Security sector, Elastic also holds a 23% shared citation overlap and a healthy Net Score of nearly 40% in Datadog’s and Splunk’s accounts. Although the shared accounts analysis does not show definitive market share shifts, it certainly shows relational directionality and the trend is clear that Elastic is performing very well in Datadog and Splunk accounts.

In the JAN24 period, Elastic’s Net Score is rebounding from recent lows; however, it is not aggregate Net Score alone that warrants the Positive outlook as Elastic now holds a dominant competitive positioning in both sectors among its closest Observability peers, including clearly demonstrated strength within its closest competitor accounts. In addition, key customer cuts such as G2000 are very strong for the vendor. In sum, although we admit that our outlook could prove to be a bit early based solely on the Net Score trajectory, the complete picture of spending intention growth amidst an otherwise bleak Observability peer group and solid competitive positioning warrants a Positive outlook on Elastic’s data set as we enter calendar year 2024. Elastic is slated to report earnings on Thursday, February 29th.

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