As the craze of earnings season draws to a close, here's a look back at some of the most exciting (and some less so) results from Q4. Today we are looking at the vertical software stocks, starting with 2U (NASDAQ:TWOU).
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 17 vertical software stocks we track reported a mixed Q4; on average, revenues beat analyst consensus estimates by 2.94%, while on average next quarter revenue guidance was 3.73% under consensus. Tech stocks have been under pressure as inflation makes their long-dated profits less valuable, but vertical software stocks held their ground better than others, with share prices down 4.94% since the previous earnings results, on average.
2U (NASDAQ:TWOU)
Originally named 2tor after the founder's dog Tor, 2U (NASDAQ:TWOU) provides software for universities and colleges to deliver online degree programs and courses.
2U reported revenues of $236 million, down 3.11% year on year, in line with analyst expectations. It was a slower quarter for the company, with declining revenue and gross margin.
"Platforms are the future of education and we are becoming increasingly confident in our platform strategy," said 2U Co-Founder and CEO Christopher "Chip" Paucek.
The stock is down 31.1% since the results and currently trades at $6.79.
Read our full report on 2U here, it's free.
Best Q4: ANSYS (NASDAQ:ANSS)
Used to help design the Mars Rover, Ansys (NASDAQ:ANSS) offers a software-as-a-service platform that enables simulation for engineering and design.
ANSYS reported revenues of $694.1 million, up 5.86% year on year, beating analyst expectations by 6.87%. It was a very strong quarter for the company, with very optimistic guidance for the next quarter and very solid guidance for the next year.
ANSYS scored the highest full year guidance raise among its peers. The stock is up 23.2% since the results and currently trades at $329.17.
Is now the time to buy ANSYS? Access our full analysis of the earnings results here, it's free.
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 $146.5 million, up 11.1% year on year, missing analyst expectations by 1.87%. It was a weak quarter for the company, with revenue guidance for the next quarter and the full year missing analysts' expectations.
Q2 Holdings had the weakest performance against analyst estimates in the group. The stock is down 23.9% since the results and currently trades at $24.15.
Read our full analysis of Q2 Holdings'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 $563.4 million, up 16% year on year, beating analyst expectations by 1.97%. It was a weak quarter for the company, with revenue guidance for the next quarter and the full year missing analysts' expectations.
The stock is up 9.32% since the results and currently trades at $181.75.
Read our full, actionable report on Veeva Systems here, it's free.
Procore Technologies (NYSE:PCOR)
Used to manage the multi-year expansion of the Panama Canal that began in 2007, Procore Technologies (NYSE:PCOR) offers a software-as-service project, finance and quality management platform for the construction industry.
Procore Technologies reported revenues of $186.4 million, up 41.2% year on year, beating analyst expectations by 5.94%. It was a strong quarter for the company, with exceptional revenue growth.
The company added 683 customers to a total of 14,086. The stock is up 23.5% since the results and currently trades at $61.94.
Read our full, actionable report on Procore Technologies here, it's free.
The author has no position in any of the stocks mentioned