The COVID-19 pandemic hit many businesses hard amid closures and layoffs, but also gave a boost to digital companies, as more people went online to work, shop, and play.
Now that the pandemic is receding, we’re starting to see how many of the changes are here to stay. One place to look is the results of our local tech businesses that report quarterly results. For the third quarter, there have been some pretty big winners and losers.
Among the winners, Rapid7 continues to benefit from increasing demand for cybersecurity. Teradyne and Entegris contribute to the booming semiconductor industry, still trying to catch up to shortages that started during COVID. And iRobot’s sales have been strong as it added new features to its automated cleaning bots. All four saw their stock prices jump at least 9 percent from when they reported earnings through Monday.
The reaction was more muted to some of the larger companies that posted results right around what Wall Street analysts expected. Akamai, HubSpot, DraftKings, and PTC saw only small stock reactions to their reports. At General Electric, meanwhile, the story wasn’t earnings but its plan unveiled Tuesday to split into three companies; its stock got a small boost.
On the flip side, once-high-flying insurance software startup Duck Creek Technologies found out how little tolerance investors have for missing outsized expectations. The Bain spinoff reported revenue jumped 21 percent last quarter, less than analysts forecast. Its stock has been down 34 percent since.
And though people bought tons of furniture online while stuck at home, benefiting Wayfair, they are finding other ways to spend now, particularly on travel and eating out. Wayfair’s revenue plunged 19 percent last quarter and net profits turned to a $78 million loss. Its stock is down 9 percent since.
Unfortunately for my hometown tech company, Tripadvisor in Needham, the stock market is an expectations game. After rivals like Expedia reported a strong bounce-back in travel spending, investors anticipated Tripadvisor would benefit just as much. So its doubling of revenue to $303 million in the third quarter from last fall’s depressed results was actually worse than forecast. Its stock has fallen this morning, currently down 7 percent. Probably not helping matters is the departure of CEO Steve Kaufer, announced late Monday, without a replacement named. (Kaufer will stay until his successor is named.)
Then again, not everything that happens on Wall Street makes sense. Wex, the Portland, Maine, payment tech company, reported revenue jumped 26 percent, more than analysts forecast. But the stock started falling almost immediately and has lost 15 percent so far.
A couple of the most recent additions to Boston’s public tech lineup have yet to report. Toast will reveal how its quarter went at the end of the day Tuesday, and Ginkgo Bioworks reports its results on November 15. Expectations for both are sky-high.