Quarterly earnings results are a good time to check in on a company’s progress, especially compared to other peers in the same sector. Today we are looking at nCino (NASDAQ:NCNO), and the best and worst performers in the vertical software group.
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 12 vertical software stocks we track reported a weaker Q2; on average, revenues missed analyst consensus estimates by 0.53%, while on average next quarter revenue guidance was 3.23% under consensus. Tech stocks have been under pressure as inflation makes their long-dated profits less valuable and vertical software stocks have not been spared, with share prices down 18.4% since the previous earnings results, on average.
Founded in 2011 in North Carolina, nCino (NASDAQ:NCNO) makes cloud-based operating systems for banks and provides that software as a service.
nCino reported revenues of $99.6 million, up 49.7% year on year, beating analyst expectations by 2.17%. It was a strong quarter for the company, with an exceptional revenue growth and a meaningful improvement in gross margin.
The stock is up 22.4% since the results and currently trades at $35.96.
Is now the time to buy nCino? Access our full analysis of the earnings results here, it's free.
Best Q2: 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 $675 million, up 58.9% year on year, beating analyst expectations by 4.22%. It was an impressive quarter for the company, with a very optimistic guidance for the next quarter and an exceptional revenue growth.
Toast scored the strongest analyst estimates beat and fastest revenue growth among its peers. The stock is down 0.82% since the results and currently trades at $17.98.
Is now the time to buy Toast? Access our full analysis of the earnings results here, it's free.
Slowest Q2: 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 $297 million, up 8.58% year on year, missing analyst expectations by 0.67%. It was a weak quarter for the company, with guidance for both the next quarter and full year missing analysts' expectations. Unity previously announced that it has entered into an agreement to merge with ironSource.
The stock is down 27.7% since the results and currently trades at $36.2.
Read our full analysis of Unity's results here.
Q2 Holdings (NYSE:QTWO)
Founded in 2004 by Hank Seale, Q2 (NYSE:QTWO) offers software as a service that enables small banks provide online banking and consumer lending services to their clients.
Q2 Holdings reported revenues of $140.3 million, up 13.5% year on year, in line with analyst expectations. It was a weaker quarter for the company, with an underwhelming revenue guidance for the next quarter and a slow revenue growth.
The stock is down 27.8% since the results and currently trades at $34.69.
Read our full, actionable report on Q2 Holdings here, it's free.
One of the most well-known Silicon Valley software companies around, Adobe (NASDAQ:ADBE) is a leading provider of software as service in the digital design and document management space.
Adobe reported revenues of $4.43 billion, up 12.6% year on year, in line with analyst expectations. It was a weaker quarter for the company, with an underwhelming revenue guidance for the next quarter and a slow revenue growth.
Adobe has announced it has entered into a definitive merger agreement to acquire Figma for ~$20 billion in cash and stock
The stock is down 19.5% since the results and currently trades at $299.00.
Read our full, actionable report on Adobe here, it's free.
The author has no position in any of the stocks mentioned