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.
Comment on Brexit Comes at a Particularly Bad Time for Software Companies
twocents@thestreet.com (Chris Nolter), The Street
Tue, 06/28/2016 - 6:41am
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