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 Q2. Today we are looking at the vertical software stocks, starting with Upstart (NASDAQ:UPST).
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. There has been a stampede out of high valuation technology stocks as raising interest rates encourages investors to value profits over growth again and vertical software stocks have not been spared, with share prices down 22.6% since the previous earnings results, on average.
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 $228.1 million, up 16.7% year on year, missing analyst expectations by 3.03%. It was a weak quarter for the company, with an underwhelming revenue guidance for the next quarter and a miss of the top line analyst estimates.
“This quarter’s results are disappointing and reflect a difficult macroeconomic environment that led to funding constraints in our marketplace,” said Dave Girouard, co-founder and CEO of Upstart.
The stock is down 33.2% since the results and currently trades at $21.50.
Read our full report on Upstart 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 33.9% since the results and currently trades at $33.09.
Read our full analysis of Unity's results here.
Matterport (NASDAQ:MTTR)
Founded in 2011 before any mass market VR headset was released, Matterport (NASDAQ:MTTR) provides the hardware and software necessary to turn real world spaces into 3D visualization.
Matterport reported revenues of $28.4 million, down 3.47% year on year, missing analyst expectations by 6.22%. It was a mixed quarter for the company, with a very optimistic guidance for the next quarter but a slow revenue growth.
Matterport pulled off the highest full year guidance raise but had the weakest performance against analyst estimates. The company added 54,000 customers to a total of 616,000. The stock is down 25.4% since the results and currently trades at $3.87.
Read our full, actionable report on Matterport 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 $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 34.3% since the results and currently trades at $31.58.
Read our full, actionable report on Q2 Holdings here, it's free.
The author has no position in any of the stocks mentioned