The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s have a look at how the vertical software stocks have fared in Q3, starting with Doximity (NYSE:DOCS).
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 11 vertical software stocks we track reported a weaker Q3; on average, revenues were in line with analyst consensus estimates, while on average next quarter revenue guidance was 2.32% under consensus. Investors abandoned cash burning companies since high interest rates will make it harder to raise capital, but vertical software stocks held their ground better than others, with the share prices up 10.1% since the previous earnings results, on average.
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 $102.1 million, up 28.7% year on year, beating analyst expectations by 1.83%. It was a weaker quarter for the company, with underwhelming revenue guidance for the next quarter.
“We were pleased to beat on both our top and bottom lines while delivering our first nine-figure revenue quarter,” said Jeff Tangney, co-founder and CEO at Doximity.
The stock is up 25.8% since the results and currently trades at $33.16.
Is now the time to buy Doximity? Access our full analysis of the earnings results here, it's free.
Best Q3: 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 $752 million, up 54.6% year on year, beating analyst expectations by 4.31%. It was a very strong quarter for the company, with a significant improvement in gross margin and exceptional revenue growth.
Toast scored the fastest revenue growth among its peers. The stock is up 2% since the results and currently trades at $20.4.
Is now the time to buy Toast? Access our full analysis of the earnings results here, it's free.
Weakest Q3: 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 $157.2 million, down 31.2% year on year, missing analyst expectations by 7.2%. It was a weak quarter for the company, with declining revenue and underwhelming guidance for the next quarter.
Upstart had the weakest performance against analyst estimates. The stock is down 8.39% since the results and currently trades at $17.46.
Read our full analysis of Upstart'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 $144.7 million, up 14.2% year on year, missing analyst expectations by 1.37%. 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 full year guidance update among the peers. The stock is up 20.5% since the results and currently trades at $31.80.
Read our full, actionable report on Q2 Holdings here, it's free.
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 $37.9 million, up 37.3% year on year, beating analyst expectations by 5.69%. It was a very strong quarter for the company, with exceptional revenue growth.
Matterport pulled off the strongest analyst estimates beat among the peers. The company added 41,000 customers to a total of 657,000. The stock is up 6.44% since the results and currently trades at $3.22.
Read our full, actionable report on Matterport here, it's free.
The author has no position in any of the stocks mentioned