As the Q4 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the design software industry, including Unity (NYSE: U) and its peers.

The demand for rich, interactive 2D, 3D, VR and AR experiences is growing, and while the ubiquitous metaverse might still be more of a buzzword than a real thing, what is real is the demand for the tools to create these experiences, whether they are games, 3D tours or interactive movies.

The 7 design software stocks we track reported a strong Q4. As a group, revenues beat analysts’ consensus estimates by 3.1% while next quarter’s revenue guidance was in line.

While some design software stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 4.4% since the latest earnings results.

Weakest Q4: Unity (NYSE: U)

Powering over half of the world's mobile games and expanding into industries from automotive to architecture, Unity (NYSE: U) provides software tools and services that allow developers to create, run, and monetize interactive 2D and 3D content across multiple platforms.

Unity reported revenues of $503.1 million, up 10.1% year on year. This print exceeded analysts’ expectations by 2.1%. Despite the top-line beat, it was still a mixed quarter for the company with an impressive beat of analysts’ EBITDA estimates but EBITDA guidance for next quarter missing analysts’ expectations significantly.

Unsurprisingly, the stock is down 37.5% since reporting and currently trades at $18.17.

Read our full report on Unity here, it’s free.

Best Q4: Autodesk (NASDAQ: ADSK)

Starting with AutoCAD in the 1980s and evolving into a comprehensive design ecosystem, Autodesk (NASDAQ: ADSK) provides software solutions for architecture, engineering, construction, manufacturing, and entertainment industries to design, simulate, and visualize projects.

Autodesk reported revenues of $1.96 billion, up 19.4% year on year, outperforming analysts’ expectations by 2.1%. The business had an exceptional quarter with an impressive beat of analysts’ billings estimates and EPS guidance for next quarter exceeding analysts’ expectations.

The market seems happy with the results as the stock is up 5% since reporting. It currently trades at $245.17.

Is now the time to buy Autodesk? Access our full analysis of the earnings results here, it’s free.

Adobe (NASDAQ: ADBE)

Originally named after Adobe Creek that ran behind co-founder John Warnock's house, Adobe (NASDAQ: ADBE) develops software products used for digital content creation, document management, and marketing solutions across desktop, mobile, and cloud platforms.

Adobe reported revenues of $6.19 billion, up 10.5% year on year, exceeding analysts’ expectations by 1.4%. It may have had the worst quarter among its peers, but its results were still good as it also locked in EPS guidance for next quarter beating analysts’ expectations and an impressive beat of analysts’ billings estimates.

As expected, the stock is down 23.8% since the results and currently trades at $261.61.

Read our full analysis of Adobe’s results here.

Procore Technologies (NYSE: PCOR)

With a mission to build software for the people that build the world, Procore Technologies (NYSE: PCOR) provides cloud-based software that enables owners, contractors, and other stakeholders to collaborate and manage construction projects from any device.

Procore Technologies reported revenues of $349.1 million, up 15.6% year on year. This print beat analysts’ expectations by 2.4%. Overall, it was a very strong quarter as it also logged a solid beat of analysts’ billings estimates and accelerating customer growth.

The company added 227 customers to reach a total of 17,850. The stock is up 11.1% since reporting and currently trades at $53.18.

Read our full, actionable report on Procore Technologies here, it’s free.

Cadence Design Systems (NASDAQ: CDNS)

Powering the chips behind everything from smartphones to AI accelerators for over 35 years, Cadence Design Systems (NASDAQ: CDNS) provides essential computational software, hardware, and intellectual property used by engineers to design and verify advanced electronic systems and semiconductors.

Cadence Design Systems reported revenues of $1.44 billion, up 6.2% year on year. This number surpassed analysts’ expectations by 1%. It was a strong quarter as it also produced EPS guidance for next quarter exceeding analysts’ expectations and a solid beat of analysts’ EBITDA estimates.

Cadence Design Systems had the weakest performance against analyst estimates and weakest full-year guidance update among its peers. The stock is up 5.9% since reporting and currently trades at $300.15.

Read our full, actionable report on Cadence Design Systems here, it’s free.

Market Update

Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.

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