The software-as-a-service (SaaS) sector has seen intense interest from investors because of the predictability of revenues and customer stickiness.
As a result, investors have been scooping up shares of prominent companies within this sector and adding them to their growth stock portfolios.
Large, well-known SaaS companies include Salesforce (NYSE: CRM), Shopify (NYSE: SHOP), and Adobe (NASDAQ: ADBE).
But if you are looking for smaller SaaS companies that are under the radar, here are five that you can consider.
Phreesia (NYSE: PHR)
Phreesia is a leading provider of comprehensive healthcare solutions through its platform.
The company helps to manage every step of a patient’s healthcare journey from finding a doctor, scheduling, registration, to payments.
Phreesia reported a solid set of earnings for the first quarter of fiscal 2026 (1Q FY2026) ending 30 April 2025.
Revenue rose 14.5% year on year to US$115.9 million.
Gross profit did better, rising by 16.1% year on year to US$99.3 million as gross margin expanded from 84.5% to 85.6%.
The business also churned out a positive free cash flow of US$7.5 million, reversing the negative free cash flow in the prior year.
Phreesia ended the quarter with 4,411 average healthcare services clients, an increase of 9% year on year.
Management sees attractive industry tailwinds that will act as catalysts for the company’s next phase of growth.
The US is spending US$4.9 trillion on healthcare, but patient payments are tough to collect, thereby reducing cash flow to healthcare providers.
Phreesia can help to reduce these pain points with its cloud platform while delivering personalised and accurate health information, thereby improving the healthcare process for its users.
Duolingo (NASDAQ: DUOL)
Duolingo offers a mobile learning platform with an app that allows users to learn various languages.
The company offers a fun and engaging way to pick up new languages.
For the first quarter of 2025 (1Q 2025), Duolingo reported a 37.7% year-on-year increase in revenue to US$230.7 million.
Operating profit climbed 43.5% year on year to US$23.6 million while net profit leapt 30.3% year on year to US$35.1 million.
The language learning platform also saw its free cash flow generation improve by 31.2% year on year to US$103 million.
1Q 2025 was also an outstanding quarter for the company as it added a record number of daily average users (DAUs).
The number of paid subscribers also went past the 10 million mark during the quarter.
Back in April, Duolingo launched an impressive 148 new language courses, which helped to more than double its current offering.
This launch is the largest expansion of content in the company’s history and should drive continued growth in its top and bottom lines.
Blackline (NASDAQ: BL)
Blackline offers a cloud platform delivering accounting and finance software solutions to help companies to automate their financial reporting.
For 1Q 2025, Blackline saw its revenue rise 6% year on year to US$166.9 million.
Operating profit more than doubled year on year to US$3.6 million.
However, net profit took a hit, tumbling 41.2% year on year to US$6.1 million.
This drop was because of lower interest income and an unusually high tax bill.
Blackline continued to generate a healthy free cash flow of US$32.6 million for the quarter.
The company also saw remaining performance obligations (RPO) climb 11% year on year to US$913.2 million.
Blackline had around 394,000 customers as of 31 March 2025 and a high dollar-based net retention rate of 104%.
Management believes it is the market leader in this sector with a total addressable market of US$45 billion that it can tap into for further growth.
Fastly (NYSE: FSLY)
Fastly runs a programmable edge cloud platform to help brands and organisations improve site performance, enhance their security, and foster innovation.
For 1Q 2025, revenue increased by 8.2% year on year to US$144.4 million while gross profit inched up 4.9% year on year to US$76.8 million.
Fastly’s free cash flow more than tripled year on year to US$9.9 million from US$2.7 million.
Enterprise customer count continued to rise, up 18 from 1Q 2024 to reach 595.
Fastly’s RPO stood at US$303 million, up 24% quarter-on-quarter.
Fastly released new products to augment its cloud platform.
Some examples include client-side protection which provides real-time monitoring and protection against unauthorised modifications.
Its bot management service also helps to prevent fraud, protect customer accounts, and minimise disruptions.
Sprinklr (NYSE: CXM)
Sprinklr operates a customer experience management cloud platform to help businesses manage customer interactions and engagements across a variety of digital channels.
For 1Q FY2026, revenue increased nearly 5% year on year to US$205.5 million, but gross profit dipped 1.4% year on year to US$142.9 million.
However, free cash flow soared 122.3% year on year to US$80.4 million during the quarter.
Other positive metrics demonstrated Sprinklr’s continued growth.
RPO rose 2% year on year while US$1 million customers increased by 6% year on year to 146.
Back in June, the company authorised an additional US$150 million in share buybacks.
Sprinklr believes it has an incremental opportunity of US$1.2 billion from existing customers that will translate into solid revenue growth rates in the future.
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Disclosure: Royston Yang owns shares of Adobe.
