A strong growth in the Application Development Software has been noted and which is led by the high demand for products, technologies and cloud migration. Consumers’ demand for an improved digital experience increases the attractiveness of application platforms or platform-as-a-service. As well, Cloud migration is still less than 50% complete, hence, the trend towards new technologies offers further growth potential for this segment in the upcoming years. (Bloomberg; CFRA, Statista)

Atlassian Corporation Plc is is the leader in what we call “meta-software”, which includes a number of segments related to aiding/automating the creation, testing, deployment, operation, monitoring, and security of software applications. Quietly but rapidly, they won coder’s favor by taking the totally opposite approach, focusing on word-of mouth, coder-to-coder recommendations and a very generous, freemium pricing model to drive sales and gained a solid reputation for handing customer issues transparently and competently. 

The company continues to thread on its explosive growth phase as the latest quarter results showed a 60%+ Y/Y growth for cloud subscriptions. Meanwhile, total revenue was USD 740.5M, up 30% compared to the corresponding quarter in 2021. It’s Free Cash Flow margin remains strong at 42%. Cash and cash equivalents plus short-term investments totaled $1.3 billion at the end of March 2022. BBG Consensus: 66.7% BUY rating.

Workday, Inc pioneered many cutting-edge innovations and is a leading provider of enterprise cloud applications for finance and human resources, helping customers adapt and thrive in a changing world. They built a suite of integrated Human Capital Management (HCM) application specifically targeting the large enterprise customers. WDAY coders very impressively and cleverly adapted open-source MySQL - a relational database management system. It has enabled the company to boost 

performance and enabled analytics (e.g., forecasting warehouse capacity or simulating supply-chain disruptions) to be run in real time, a substantial improvement over traditional system. Workday co-CEO, stated that their continued global momentum and a healthy deal pipeline position them well to deliver a strong fiscal 2023.

In the first quarter of fiscal 2022, the company reported a total revenue of $1.43 Billion, up 22.1% Year Over Year. Subscription revenues were $1.27 billion, an increase of 23.2% from the same period last year. BBG Consensus: 87.9% BUY rating.

NICE initially generated revenue through defense contracts, and thereafter launched its first commercially available software application NiceLog, with various improved parameters. Since 2014, the company decided to reorganize the company to focus on its contact center and financial crime detection apps. Over the last few years, NICE has made additional acquisitions of cloud-based app providers and also enhanced its financial fraud detection suite with its acquisition of Guardian Analytics, a UK-based firm specializing in analytical software used to detect money laundering. Afterwards, NICE has successfully made the transition to cloud-based delivery and subscription-based business model which is thriving at a staggering 50% recently (CFRA).

They maintained their strong financial achievements and rising momentum throughout the first quarter of 2022, as they did throughout last year. Total revenue climbed 15.9% to $527.4 million in Q1 2022, compared to $455.0 million the previous year. Gross profit in Q1 2022 was $360.4 million, up from $307.2 million to that of 2021. The gross margin in the Q1 2022 was 68.3 %, compared to 67.5% in the first quarter of 2021. 

BBG Consensus: 83.3% BUY rating.