Earnings results often give us a good indication of what direction the company will take in the months ahead. With Q1 now behind us, let’s have a look at Alarm.com (NASDAQ:ALRM) 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 4 vertical software stocks we track reported a decent Q1; on average, revenues beat analyst consensus estimates by 3.4%, while on average next quarter revenue guidance was 0.53% above consensus. Tech multiples have reverted to the historical mean after reaching all time levels in early 2021, but vertical software stocks held their ground better than others, with the share prices up 14.9% since the previous earnings results, on average.
Founded in 2000 as a business unit within MicroStrategy, Alarm.com (NASDAQ:ALRM) is a software-as-a-service platform that enables users to control their security systems and smart home appliances from a single app.
Alarm.com reported revenues of $209.7 million, up 2.08% year on year, beating analyst expectations by 1.17%. It was a decent quarter for the company, with a significant improvement in gross margin. Guidance for revenue and adjusted EBITDA were raised for the full year, with both metrics in line with Consensus.
“We’re pleased to report solid first quarter results and continued momentum across the business to start the new year,” said Steve Trundle, CEO of Alarm.com.
Alarm.com delivered the slowest revenue growth of the whole group. The stock is up 7.98% since the results and currently trades at $51.68.
Is now the time to buy Alarm.com? Access our full analysis of the earnings results here, it's free.
Best Q1: Manhattan Associates (NASDAQ:MANH)
Boasting major consumer staples and pharmaceutical companies as clients, Manhattan Associates (NASDAQ:MANH) offers a software-as-service platform that helps customers manage their supply chains.
Manhattan Associates reported revenues of $221 million, up 23.5% year on year, beating analyst expectations by 10.2%. It was an impressive quarter for the company, with a solid beat of analyst estimates. Revenue and EPS guidance for the current year were raised by 4% and 7.5%, respectively, and the updated guidance topped Consensus estimates.
Manhattan Associates achieved the strongest analyst estimates beat, fastest revenue growth, and highest full year guidance raise among its peers. The stock is up 30.9% since the results and currently trades at $199.88.
Is now the time to buy Manhattan Associates? Access our full analysis of the earnings results here, it's free.
Weakest Q1: Guidewire Software (NYSE:GWRE)
Founded by two individuals involved in the development of leading procurement software Ariba, Guidewire (NYSE:GWRE) offers a software-as-a-service platform for insurance companies to manage, analyze and sell their products. to manage their workflows.
Guidewire Software reported revenues of $207.5 million, up 5.09% year on year, missing analyst expectations by 3.05%. It was a weak quarter for the company, with a miss of the top line analyst estimates and a decline in gross margin.
Guidewire Software had the weakest performance against analyst estimates and weakest full year guidance update in the group. The stock is down 8.16% since the results and currently trades at $76.08.
Founded by brothers Keith and Barry Bentley, Bentley Systems (NASDAQ:BSY) offers a software-as-a-service platform that addresses the lifecycle of infrastructure projects such as road networks, tunnel systems, and wastewater facilities.
Bentley reported revenues of $314.4 million, up 14.1% year on year, beating analyst expectations by 5.28%. It was a strong quarter for the company, with a solid beat of analyst estimates. The company's outlook for 2023 was slightly above for ARR (annual recurring revenue) and revenue and nicely ahead for operating margin.
The stock is up 29.1% since the results and currently trades at $54.23.
The author has no position in any of the stocks mentioned