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Reflecting On Vertical Software Stocks’ Q4 Earnings: Olo (NYSE:OLO)


Kayode Omotosho /
2023/04/14 3:46 am EDT

Quarterly earnings results are a good time to check in on a company’s progress, especially compared to other peers in the same sector. Today we are looking at Olo (NYSE:OLO), and the best and worst performers in the vertical software group.

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. Investors abandoned cash burning companies since high interest rates will make it harder to raise capital and while some of the vertical software stocks have fared somewhat better than others, they have not been spared, with share prices declining 5.28% 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 $49.8 million, up 24.6% year on year, beating analyst expectations by 2.39%. It was a mixed quarter for the company, with a meaningful improvement in gross margin but underwhelming guidance for the next year.

“In 2022, Olo increasingly became the platform that restaurant brands rely on to make their digital priorities a reality,” said Noah Glass, Olo’s Founder and CEO.

Olo Total Revenue

The stock is up 2.96% since the results and currently trades at $8.35.

Read our full report on Olo 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 Total Revenue

ANSYS pulled off the highest full year guidance raise among its peers. The stock is up 21.9% since the results and currently trades at $325.73.

Is now the time to buy ANSYS? Access our full analysis of the earnings results here, it's free.

Slowest Q4: 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 25.2% since the results and currently trades at $23.74.

Read our full analysis of Q2 Holdings's results here.

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 $769 million, up 49.4% year on year, beating analyst expectations by 2.11%. It was a mixed quarter for the company, with exceptional revenue growth but underwhelming guidance for the next year.

The stock is down 30.3% since the results and currently trades at $18.1.

Read our full, actionable report on Toast here, it's free.

Doximity (NYSE:DOCS)

Founded in 2010 and named for a combination of “docs” and “proximity”, Doximity (NYSE: DOCS) is the leading social network for U.S. medical professionals.

Doximity reported revenues of $115.3 million, up 17.8% year on year, beating analyst expectations by 3.4%. 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 down 5.11% since the results and currently trades at $34.56.

Read our full, actionable report on Doximity here, it's free.

The author has no position in any of the stocks mentioned