For most publicly-traded companies, there was never a good time for the Brexit vote. But for the large software companies that market to corporate IT departments, the referendum at the close of the second quarter came at a particularly inopportune moment. Slippage of large accounts from one quarter to the next is a landmine for software companies, resulting in earnings misses and making the last days of a reporting period crucial for sales. "[T]he timing of this exogenous market shock couldn't have come at a worse time," Credit Suisse analyst Michael Nemeroff wrote in a report, noting that "most enterprise-focused software companies -- regardless of size -- sign a large amount of business in the final few weeks of each [quarter]." Nemeroff suggested that well-positioned stocks, given recent declines and their low exposure to Brexit fallout, include Ultimate Software and 2U , with 98% of revenues from the U.S.
Brexit Comes At A Particularly Bad Time For Software Companies
twocents@thestreet.com (Chris Nolter), The Street
Tue, 06/28/2016 - 6:41am
Topics: slippage t]he credit suisse michael nemeroff nemeroff paycom synchronoss higher open text verint systems cornerstone ondemand adobe ceo shantanu narayen in adobe kirk materne evercore isi veeva systems splunk palo alto networks long-term sap sap middle east africa tyler technologies fortinet check point software gray powell wells fargo securities cyberark symantec 25% proofpoint palo alto fireeye powell q3 august september mkm partners kevin buttigieg brexit-bucking netsuite ulti internet brexit nemeroff ultimate software u.s uk europe u.s adobe u.k adobe june materne salesforce palo alto emea oracle microsoft cyber powell july buttigieg click time software companies exposure suggested include quarter business market large analyst report margins wrote security noted sector recurring earnings valuations smaller generates stocks line vote top digital month risk investors
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