雅虎香港財經 12 High Growth SaaS Stocks that are Profitable
In this piece, we will take a look at 12 high growth SaaS stocks that are profitable. For more stocks, head on over to 5 High Growth SaaS Stocks that are Profitable.
Cloud computing is one of the hottest industries right now, with the advent of large scale computing enabling firms to avail a vast variety of services digitally. One important and crucial segment of the broader cloud computing industry is the software as a service (SaaS) industry. This sector, according to the Massachusetts Institute of Technology (MIT), consists of all industries that deliver software applications over a network (you can check out some SaaS companies at 10 Profitable SaaS Companies for 2023). This provides numerous applications, that range from the everyday user accessing digital services such as collaboration platforms to firms accessing supply chain and logistics data over a network instead of physically monitoring their operations.
Naturally, these diverse use cases lend the SaaS industry some lucrative valuations, despite the fact that they primarily sell software products that do not have the advantage of strong or high prices typically enjoyed by hardware. For instance, while an iPhone can cost you anywhere in excess of $1,000, a Netflix subscription costs significantly less. Placing a dollar figure on the SaaS industry's value, a research report from Fortune Business Insights reveals that the industry was worth $215 billion in 2021. In just a year, or by the end of 2022, the firm believes that the sector would grow to $251 billion. From then onwards to 2029 end, it outlines that the sector can grow through a compounded annual growth rate (CAGR) of 19.7% to be worth an estimated $883 billion by the end of the forecast period.
It adds that the industry is growing because of a variety of factors such as the need for a central data analytics platform and cross collaboration across different software. Fortune Business Insights also mentions the growing role that artificial intelligence is playing in the industry as it shares that the SaaS part of a business's operations is being significantly transformed due to the integration of both AI and machine learning tools. Additionally, the market itself is segregated into various sectors such as enterprise resource management, analytics, and collaboration. Out of these, collaboration should outpace the market in terms of growth, with an estimated CAGR of 21.8%.
This explosive growth is also clear when we analyze companies that report most of their revenues from SaaS. As part of our research, we studied dozens of firms and looked at their balance sheets. As is the case in other industries too, firms with lower market capitalization are currently experiencing explosive growth. In fact, the lowest quarterly annual revenue growth of the top fifteen firms part of our research was more than 30%, and it went as high as 106%. However, since these firms are not generating a profit, they were excluded from our research. However, some firms that are both growing and profitable are SentinelOne, Inc. (NYSE:S), Intuit Inc. (NASDAQ:INTU), and BlackLine, Inc. (NASDAQ:BL).
Our Methodology
We sifted through dozens of companies that generate the bulk of their revenue in the SaaS industry. They were then ranked according to their annual quarterly revenue growth for the latest quarter. Then, each firm's income statement was studied to determine if it is profitable or not. The top fifteen picks are listed.
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High Growth SaaS Stocks that are Profitable
12. Adobe Inc. (NASDAQ:ADBE)
Q/Q Sales Growth: 9.9%
Number of Hedge Fund Holders in Q3 2022: 93
Adobe Inc. (NASDAQ:ADBE) is an American software company that is one of the biggest technology firms in the world. It provides collaboration and performance monitoring platforms alongside other services. The firm is based in San Jose, California.
Adobe Inc. (NASDAQ:ADBE)'s fiscal fourth quarter saw the firm bring in $4.5 billion in revenue, which, despite the company's scale, enabled it to achieve a 9.9% annual net sales growth. Insider Monkey took a look at 920 hedge funds for their third quarter of 2022 investments to discover that 93 had invested in the company.
Adobe Inc. (NASDAQ:ADBE)'s largest investor is Ken Fisher's Fisher Asset Management which owns 5 million shares that are worth $1.7 billion.
Along with Intuit Inc. (NASDAQ:INTU), SentinelOne, Inc. (NYSE:S), and BlackLine, Inc. (NASDAQ:BL), Adobe Inc. (NASDAQ:ADBE) is a SaaS company that is both growing and earning profits.
11. Equinix, Inc. (NASDAQ:EQIX)
Q/Q Sales Growth: 10%
Number of Hedge Fund Holders in Q3 2022: 39
Equinix, Inc. (NASDAQ:EQIX) is a software as a service company that primarily caters to the needs of the corporate world by providing businesses with access to a centralized platform that enables them to look up the right fit for their scaling and other needs. The firm is based in Rosewood City, California.
Equinix, Inc. (NASDAQ:EQIX) raked in $1.8 billion in revenue and $1.8 million in net income during its fourth fiscal quarter, making it not only profitable but also providing it with a 10% annual revenue growth. As of Q3 2022, 39 of the 920 hedge funds polled by Insider Monkey had bought a stake in the company.
Ian Simm's Impax Asset Management is Equinix, Inc. (NASDAQ:EQIX)'s largest investor. It owns 659,094 shares that are worth $431 million.
10. Box, Inc. (NYSE:BOX)
Q/Q Sales Growth: 11.6%
Number of Hedge Fund Holders in Q3 2022: 29
Box, Inc. (NYSE:BOX) is a cloud company that provides businesses with a platform that enables them to collaborate with each other and within their organizations. Some features that its products offer include the ability to run processes, create a secure environment, and meet compliance and regulatory requirements. Box, Inc. (NYSE:BOX) is headquartered in San Francisco, California.
Box, Inc. (NYSE:BOX)'s latest fiscal quarter saw the firm post an 11.6% revenue growth. At the same time, its fourth quarter was also the first time that it had managed to post a net profit. The quarter saw Box, Inc. (NYSE:BOX) rake in $4.9 million in profits, after posting a $3.2 million loss in the previous quarter. This profit was driven primarily by cost cutting and other measures, as the firm only increased its revenue between Q3 and Q4 by $4 million. By the end of September 2022, 29 of the 920 hedge funds polled by Insider Monkey had bought Box, Inc. (NYSE:BOX)'s shares.
Box, Inc. (NYSE:BOX)’s largest shareholder is Robert G. Moses’ RGM Capital. It owns 3.9 million shares that are worth $121 million.
9. The Descartes Systems Group Inc. (NASDAQ:DSGX)
Q/Q Sales Growth: 12%
Number of Hedge Fund Holders in Q3 2022: 17
The Descartes Systems Group Inc. (NASDAQ:DSGX) is a supply chain software as a service provider. Its platform allows users to conduct business with each other alongside tracking and tracing their shipments.
The Descartes Systems Group Inc. (NASDAQ:DSGX)'s third quarter of fiscal 2023 saw it earn $121 million in revenue which marked a 12% annual growth. The firm further expanded its operational portfolio in February 2023 after it acquired a last mile cloud company. 17 of the 920 hedge funds surveyed by Insider Monkey in Q3 2022 had invested in the firm.
The Descartes Systems Group Inc. (NASDAQ:DSGX)'s largest investor is Henry Ellenbogen's Durable Capital Partners which owns 3.9 million shares that are worth $275 million.
8. Autodesk, Inc. (NASDAQ:ADSK)
Q/Q Sales Growth: 13.3%
Number of Hedge Fund Holders in Q3 2022: 62
Autodesk, Inc. (NASDAQ:ADSK) is a software company that provides engineering and design products. These allow professionals such as architects and engineers to develop their products, create realistic renders, and evaluate them before rushing to full scale construction. The company is headquartered in San Rafael, California.
Autodesk, Inc. (NASDAQ:ADSK) reported $1.2 billion in revenue in its quarter ending in October 2022, which allowed the firm to post a 13.3% annual growth. At the same time, it generated $198 million in net income, marking growth over the previous three quarters. 62 of the 920 hedge funds part of Insider Monkey's third quarter of 2022 survey had invested in the firm.
Ian Simm's Impax Asset Management is Autodesk, Inc. (NASDAQ:ADSK)’s largest investor. It owns 1.3 million shares that are worth $243 million.
7. Veeva Systems Inc. (NYSE:VEEV)
Q/Q Sales Growth: 16%
Number of Hedge Fund Holders in Q3 2022: 42
Veeva Systems Inc. (NYSE:VEEV) is a healthcare software as a service provider. It enables healthcare companies to manage their daily operations, conduct research, market and sell their products, and maintain regulatory compliance. Veeva Systems Inc. (NYSE:VEEV) has operations all over the world in Europe, North America, the Middle East, Asia, and other regions. The firm is based in Pleasanton, California.
Veeva Systems Inc. (NYSE:VEEV) is expanding its regional presence in the U.S., as it plans to open a new office in Kansas City, the firm announced in February 2023. Its latest quarterly results marked a 16% annual revenue growth, and the firm's trailing twelve month net income is $396 million. Insider Monkey took a look at 920 hedge fund holdings for last year's third quarter to determine that 42 had bought the firm's shares.
Greg Poole’s Echo Street Capital Management is Veeva Systems Inc. (NYSE:VEEV) largest investor. It owns one million shares that are worth $177 million.
6. SPS Commerce, Inc. (NASDAQ:SPSC)
Q/Q Sales Growth: 19%
Number of Hedge Fund Holders in Q3 2022: 19
SPS Commerce, Inc. (NASDAQ:SPSC) is a supply chain software firm that was set up in 1987 and is headquartered in Minneapolis, Minnesota. The firm enables its customers to manage orders, optimize their performance, and run and operate their warehouses.
SPS Commerce, Inc. (NASDAQ:SPSC) posted $122 million in revenue for its fiscal quarter ending in December 2022, allowing it to achieve a 19% annual growth. The firm's profits for the full year 2022 stand at $55 million. 19 of the 920 hedge funds part of Insider Monkey's Q3 2022 study had owned a stake in the firm.
SPS Commerce, Inc. (NASDAQ:SPSC)'s largest shareholder is Jim Simons' Renaissance Technologies which owns 139,900 shares that are worth $17.9 million.
SentinelOne, Inc. (NYSE:S), Intuit Inc. (NASDAQ:INTU), SPS Commerce, Inc. (NASDAQ:SPSC), and BlackLine, Inc. (NASDAQ:BL) are some high growing profitable SaaS firms.
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Disclosure: None. 12 High Growth SaaS Stocks that are Profitable is originally published on Insider Monkey.
