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Q1 Earnings Highs And Lows: Autodesk (NASDAQ:ADSK) Vs The Rest Of The Vertical Software Stocks


Adam Hejl /
2022/06/21 4:14 am EDT
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Looking back on vertical software stocks' Q1 earnings, we examine this quarters’ best and worst performers, including Autodesk (NASDAQ:ADSK) and its peers.

Software is eating the world, and while a large number of solutions such as project management or video conferencing software can be useful to a wide array of industries, there are industries that have very specific needs. Whether it is life-sciences, education or banking, the demand for so called vertical software, addressing industry specific workflows, is growing, fueled by the pressures on improving productivity and quality of offerings.

The 11 vertical software stocks we track reported a mixed Q1; on average, revenues beat analyst consensus estimates by 2.53%, while on average next quarter revenue guidance was 2.08% under consensus. Technology stocks have been hit hard on fears of higher interest rates, but vertical software stocks held their ground better than others, with share price down 9.8% since earnings, on average.

Autodesk (NASDAQ:ADSK)

Founded in 1982 by John Walker and growing into one of the industry's behemoths, Autodesk (NASDAQ:ADSK) makes computer-aided design (CAD) software for engineering, construction, and architecture companies.

Autodesk reported revenues of $1.17 billion, up 18.2% year on year, beating analyst expectations by 2.09%. It was a mixed quarter for the company, with a decent beat of analyst estimates but a full year guidance missing analysts' expectations.

"Autodesk's strong Q1 results reflect the company's steady execution, industry leading products and platforms, and resilience through elevated times of uncertainty," said Andrew Anagnost, Autodesk president and CEO.

Autodesk Total Revenue

The stock is down 10.3% since the results and currently trades at $171.85.

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

Best Q1: Toast (NYSE:TOST)

Founded by three MIT engineers at a local Cambridge bar, Toast (NYSE:TOST) provides integrated point of sale (POS) hardware, software, and payments solutions for restaurants.

Toast reported revenues of $535 million, up 52% year on year, beating analyst expectations by 9.07%. It was an incredible quarter for the company, with a significant improvement in gross margin and a very optimistic guidance for the next quarter.

Toast Total Revenue

Toast delivered the strongest analyst estimates beat and highest full year guidance raise among its peers. The stock is down 7.99% since the results and currently trades at $13.12.

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

Weakest Q1: Unity (NYSE:U)

Started as a game studio by three friends in a Copenhagen apartment, Unity (NYSE:U) is a software as a service platform that makes it easier to develop and monetize new games and other visual digital experiences.

Unity reported revenues of $320.1 million, up 36.3% year on year, missing analyst expectations by 0.31%. It was a weak quarter for the company, with revenue guidance for both the next quarter and the full year below analysts' estimates.

Unity had the weakest performance against analyst estimates in the group. The company added 31 enterprise customers paying more than $100,000 annually to a total of 1,083. The stock is down 25.8% since the results and currently trades at $35.67.

Read our full analysis of Unity's results here.

Veeva Systems (NYSE:VEEV)

Built on top of Salesforce as one of the first vertical-focused cloud platforms, Veeva (NYSE:VEEV) provides data and customer relationship management (CRM) software for organizations in the life sciences industry.

Veeva Systems reported revenues of $505.1 million, up 16.4% year on year, beating analyst expectations by 1.85%. It was a mixed quarter for the company, with a decent beat of analyst estimates but a slow revenue growth.

The stock is up 9.45% since the results and currently trades at $183.65.

Read our full, actionable report on Veeva Systems here, it's free.

Upstart (NASDAQ:UPST)

Founded by the former head of Google's enterprise business Dave Girouard, Upstart (NASDAQ:UPST) is an AI-powered lending platform that helps banks better evaluate the risk of lending money to a person and provide loans to more customers.

Upstart reported revenues of $310.1 million, up 153% year on year, beating analyst expectations by 3.33%. Despite the solid top-line growth, it was a weak quarter for the company, with revenue guidance for both the next quarter and the full year below analysts' estimates.

Upstart scored the fastest revenue growth but had the weakest full year guidance update among the peers. The stock is down 52.6% since the results and currently trades at $36.52.

Read our full, actionable report on Upstart here, it's free.

The author has no position in any of the stocks mentioned