With earnings season underway, next week's calendar is packed with companies that ETR tracks in our surveys, and while no single input can paint an entire picture, our forward-looking spending intentions have been proven to correlate to future revenues. As such, let's take a look at what the recent data said about a few of the companies reporting next week including Palo Alto, Zoom, Splunk, Snowflake, Salesforce, Workday, and Elastic. For spending intentions data, end-user insights, and industry-leading analysis on the 700 hundred enterprise tech vendors that ETR publishes research for, please visit our data platform ETR. Or get started with your own free trial.
Let's kick off our earnings group for next week with the security platform play Palo Alto Networks, which is slated to report quarterly earnings after the market close on Tuesday, August 22nd. Year to date, this cyber security leader has shown incredible resilience in the face of a broader tech market valuation reset with a share price drop of only ~7%, and still residing more than 2x higher than March 2020 pandemic lows. Turning towards our most recent spending intentions data from the JUL22 survey, the ETR Research team noted that Palo Alto Networks’ Pervasion (enterprise penetration) within the Information Security sector continues to grow, standing at the 97th percentile among all security vendors within our survey sample and only trailing that of Microsoft and Cisco. Positive spending intentions (Adopt + Increase) among ETR's IT decision makers remain elevated at 46%, while negative spending intent (Decrease + Replace) remains minimal at 6%. Palo Alto maintains the highest enterprise penetration among pure-play security providers within our universe, despite a slight cooling in overall spending intent. However, we do need to state that spending intentions have shown a declining trend over the last two years, especially among large enterprises as depicted by Global 2000 survey respondents in our survey, as seen below. See the full Palo Alto Report HERE.
Next up is Zoom, also slated to report earnings after the market close on Tuesday, August 22nd. The ETR data has shown negative spending intent for this vendor for years, and unfortunately not much has changed in our most recent refresh, with the ETR research team stating: In the most recent survey period, Zoom’s Net Score has revised lower again, dropping another 35% since last year’s 2H levels. Since the highs captured in APR20, Zoom’s Net Score has now plummeted from ~60% to ~12%. Yet again the Expansion vs Contraction ratio has thinned out for the vendor as positive spending has decreased, and negative spending has grown since last year. Despite FCF yields, sales, and earnings multiples nearing sanity levels for Zoom's stock, the data continues its unrelenting march lower. Ultimately, the plummeting Net Score across all three sectors we track the vendor in, shrinking Adoptions, high Replacement rates, and continued market dominance by Microsoft Teams yielded another Negative outlook for Zoom based on ETR's forward-looking spending intentions. See the full report HERE.
Next Wednesday arrives with a plethora of ETR-tracked vendors reporting earnings, including the SaaS giant Salesforce (you can read the full report HERE). However, given attention span constraints, I will focus on one name where the ETR data remains at historically elevated levels: Snowflake. Since 2020, the share price of this disruptive and progressive data company has stretched toward $400 twice but is currently sitting 50% lower year to date. This is a vendor where we have captured declining spend intent throughout the year, but overall Net Score still remains at historically high levels relative to ETR's entire survey universe. In the most recent survey period, the ETR research team wrote: Net Score for Snowflake has been sliding for a year now, with a 17% decline since the October 2021 survey. In addition, the Net Score drop was 28% among Fortune 500 customers over that same time frame. Despite some growth in Adoption indications since October 2021, a 13 percentage point contraction in Increase spending indications and a rise in negative spending intentions are weighing down Snowflake’s most recent Net Score. With all that said, Snowflake still holds one of the highest Net Scores in the entire TSIS vendor universe at 63%, occupying rarified air relative to other vendors. While the year-long decline for Snowflake’s Net Score is undoubtedly concerning, it is still one of the highest ranking vendors within the TSIS and remains atop the Database / Data Warehousing Software sector with Pervasion growth on par with peers. Throw in a strong TSIS debut for its analytics product Streamlit, and you have a clear rationale to keep a Positive outlook for Snowflake. Read the full Snowflake report HERE.
Lastly, we highlight Workday, scheduled to report earnings on Thursday, August 25th. After taking a brief hiatus from our data analysis as we split the vendor into Human Capital Management (HCM) and Financial Services verticals, ETRs data quickly coalesced around a resounding conclusion that Workday remains a SaaS giant, with the ETR analyst team writing: Across the three product areas tracked, the company’s Net Score is higher than more than 75% of its peers and as high as the 91st percentile within its core HCM products. Workday remains well-positioned within the Enterprise Apps sector with spending intent and pervasion that is increasing among large organizations such as Fortune 500s and Global 2000s. Ultimately, increasing spend from large organizations with low negative indications bodes well for the company heading into 2H22, resulting in a continued Positive outlook for the vendor’s data set. View the full report HERE.
In addition to the companies detailed above, ETR also has updated data sets and full reports on additional enterprise tech players that report earnings next week like, Elastic (Positive), Box (Negative), and Splunk (call me) as well as hundreds of more leading enterprise technology companies. If you would like to access all of the spending intentions data, end-user insights, and industry-leading analysis on the hundreds of enterprise tech vendors that ETR tracks for yourself, please visit our product platform HERE, or request a Free Trial.
Enterprise Technology Research (ETR) is a technology market research firm that leverages proprietary data from our targeted IT decision maker (ITDM) community to bring you actionable insights about spending intentions and industry trends. Since 2010, we have worked diligently at achieving one goal: eliminating the need for opinions in enterprise research, which are often formed from incomplete, biased, and statistically insignificant data. Our community of ITDMs represents $1+ trillion in annual IT spend and is positioned to provide best-in-class customer/evaluator perspectives. ETR’s proprietary data and insights from this community empower institutional investors, technology companies, and ITDMs to navigate the complex enterprise technology landscape amid an expanding marketplace. Discover what ETR can do for you at www.etr.ai