As we reflect back on the just completed Q3 vertical software sector earnings season, we dig into the relative performance of Doximity (NYSE:DOCS) 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 13 vertical software stocks we track reported a solid Q3; on average, revenues beat analyst consensus estimates by 4.23%, while on average next quarter revenue guidance was 3.87% above consensus. Technology stocks have been hit hard on fears of higher interest rates and vertical software stocks have not been spared, with share price down 37.7% since earnings, on average.
Best Q3: Doximity (NYSE:DOCS)
Founded in 2010 and named for a combination of “docs” and “proximity”, Doximity (NYSE: DOCS) is the leading professional network for U.S. medical professionals.
Doximity reported revenues of $79.3 million, up 75.8% year on year, beating analyst expectations by 7.9%. It was a stunning quarter for the company, with a very optimistic guidance for the next quarter and an exceptional revenue growth.
"We're pleased to report another strong financial quarter as the shift to digital among our clients continues," said Jeff Tangney, co-founder & CEO at Doximity.
Doximity scored the highest full year guidance raise of the whole group. The stock is down 43.3% since the results and currently trades at $43.33.
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 $486.3 million, up 105% year on year, beating analyst expectations by 12.1%. It was a very strong quarter for the company, with an impressive beat of analyst estimates and an exceptional revenue growth.
Toast pulled off the strongest analyst estimates beat among its peers. The stock is down 60.4% since the results and currently trades at $24.10.
Is now the time to buy Toast? Access our full analysis of the earnings results here, it's free.
Weakest Q3: Adobe (NASDAQ:ADBE)
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 $4.11 billion, up 20% year on year, in line with analyst expectations. It was a weak quarter for the company, with a full year guidance missing analysts' expectations and an underwhelming revenue guidance for the next quarter.
Adobe had the weakest full year guidance update in the group. The stock is down 17.9% since the results and currently trades at $517.50.
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 $476.1 million, up 26.1% year on year, beating analyst expectations by 2.16%. It was a decent quarter for the company, with revenue guidance for the next quarter roughly in line with what analysts were expecting.
The stock is down 19% since the results and currently trades at $220.16.
Founded by Noah Glass, who wanted to get a cup of coffee faster on his way to work, Olo (NYSE:OLO) provides restaurants and food retailers with software to manage food orders and delivery.
Olo reported revenues of $37.3 million, up 35.9% year on year, beating analyst expectations by 2.91%. It was a strong quarter for the company, with a very optimistic guidance for the next quarter.
The stock is down 47.3% since the results and currently trades at $15.75.
The author has no position in any of the stocks mentioned