These 2 SaaS shares are making large pre-listing strikes on Friday

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The stock market has made a solid upward move this week, and investors are coming on Friday to see what impact the US employment situation will have on the future economy. Wall Street was optimistic as most market participants believed the upward momentum would continue for key market benchmarks. Starting at 8 a.m. EDT Friday morning, futures on the Dow Jones industry average (DJINDIZES: ^ DJI) increased by 46 points to 35,470. S&P 500 (SNPINDEX: ^ GSPC) Futures rose 8 points to 4,543, and Nasdaq composite (NASDAQINDEX: ^ IXIC) Futures up 24 points to 15,625.

Some stocks that had news on Thursday evening or early Friday morning got a dip in the action by seeing large price moves. Both granny (NYSE: OOMA) and Guidewire software (NYSE: GWRE) are offering Software as a Service as part of their broader offering to customers, and both stocks gained ground to bolster the overall market. Below, let’s take a look at what moved stocks higher in Friday’s pre-trading session.

Ooma is making the right call

Ooma’s shares were up nearly 7% in pre-trading hours on Friday. This contributed to a 3% gain the previous day as investors reacted positively to the second quarter financial results that the communications platform provider announced late Thursday.

Ooma’s numbers reflect solid demand for its services. Revenue increased 14% year over year to $ 47.1 million. Net income rose more than 6% on an adjusted basis to $ 3.3 million, and adjusted earnings of $ 0.13 per share exceeded expectations of those who followed the stock by $ 0.04 .

Image source: Getty Images.

Ooma is still pretty small, but has been profitable for a while and is trying to expand in different directions. On the one hand, the communications provider intends to continue serving the small business customers it initially focused on by offering services that were previously only available to larger companies. At the same time, Ooma wants to benefit from the large corporate market, which can generate significant sales.

Ooma’s guidance for the future has also been encouraging, with third-quarter sales expected to range between $ 47.8 million and $ 48.5 million and full year sales between $ 188.5 and $ 190 million. Both numbers showed a steeper growth path than most expected, and that bodes well for Ooma’s longer-term prospects.

Guidewire continues towards the cloud

Meanwhile, Guidewire Software’s shares rose nearly 6% in early Friday trading. The software platform provider, specializing in property and casualty insurance, made further progress in moving to the cloud, with Guidewire’s fourth quarter financials reflecting a notable success.

As with many companies undergoing cloud transitions, overall revenue growth was minimal, with revenue increasing less than 1% to $ 743 million for the full fiscal year 2021. However, subscription and support revenue increased 24% year over year, reflecting the recurring revenue that a subscription-based model brings with it. At the end of the fiscal year, Guidewire had annual recurring revenues of $ 582 million, 13% more than last year. Adjusted earnings of $ 0.49 per share for the year were below fiscal 2020 levels, but nearly doubled what most investors had expected from Guidewire.

Guidewire has attracted many insurers to buy into its cloud transformation, including a record 17 core cloud businesses in the past three months. The company’s InsuranceSuite product is gaining traction, and extensive cloud migrations for longer-term customers have all helped increase recurring revenue.

The finance industry is a hotbed of activity for technology companies, and Guidewire does a good job serving insurance providers. That could ensure further growth in the coming years.

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