As Q2 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers amongst the vertical software stocks, including Olo (NYSE:OLO) 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 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. Technology stocks have been hit hard on fears of higher interest rates as investors search for near-term cash flows and vertical software stocks have not been spared, with share prices down 23.2% since the previous earnings results, on average.
Olo (NYSE:OLO)
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 $45.6 million, up 27% year on year, missing analyst expectations by 0.5%. It was a weak quarter for the company, with revenue guidance for both the next quarter and full year missing analysts' expectations.
“We delivered solid second quarter results. We generated $45.6 million in total revenue, a 27% increase year-over-year, as our platform supported continued growth in new brands, increased module adoption within our existing customer base, and increased transaction volume,” said Noah Glass, Olo’s Founder and CEO.
The stock is down 41.9% since the results and currently trades at $7.57.
Is now the time to buy Olo? 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 6.34% since the results and currently trades at $16.98.
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 revenue 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 35.4% since the results and currently trades at $32.36.
Read our full analysis of Unity's results here.
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 $90.6 million, up 24.7% year on year, beating analyst expectations by 1.1%. It was a weak quarter for the company, with revenue guidance for both the next quarter and full year missing analysts' expectations.
The stock is down 24.5% since the results and currently trades at $30.35.
Read our full, actionable report on Doximity here, it's free.
nCino (NASDAQ:NCNO)
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.
The stock is up 15.6% since the results and currently trades at $33.95.
Read our full, actionable report on nCino here, it's free.
The author has no position in any of the stocks mentioned