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 Q1. Today we are looking at the vertical software stocks, starting with Veeva Systems (NYSE:VEEV).
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 mixed Q1; on average, revenues beat analyst consensus estimates by 2.53%, while on average next quarter revenue guidance was 2.08% under consensus. The technology sell-off has been putting pressure on stocks since November and while some of the vertical software stocks have fared somewhat better, they have not been spared, with share price declining 10.7% since earnings, on average.
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 $505.1 million, up 16.4% year on year, beating analyst expectations by 1.85%. It was a mixed quarter for the company, with a decent beat of analyst estimates but a slow revenue growth.
The stock is up 7.86% since the results and currently trades at $180.98.
Is now the time to buy Veeva Systems? Access our full analysis of the earnings results here, it's free.
Best Q1: 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 $535 million, up 52% year on year, beating analyst expectations by 9.07%. It was an incredible quarter for the company, with a significant improvement in gross margin and a very optimistic guidance for the next quarter.
Toast pulled off the strongest analyst estimates beat and highest full year guidance raise among its peers. The stock is down 2.66% since the results and currently trades at $13.88.
Is now the time to buy Toast? Access our full analysis of the earnings results here, it's free.
Weakest Q1: 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 $320.1 million, up 36.3% year on year, missing analyst expectations by 0.31%. It was a weak quarter for the company, with revenue guidance for both the next quarter and the full year below analysts' estimates.
Unity had the weakest performance against analyst estimates in the group. The company added 31 enterprise customers paying more than $100,000 annually to a total of 1,083. The stock is down 25.4% since the results and currently trades at $35.86.
Read our full analysis of Unity's results here.
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 $310.1 million, up 153% year on year, beating analyst expectations by 3.33%. Despite the solid top-line growth, it was a weak quarter for the company, with revenue guidance for both the next quarter and the full year below analysts' estimates.
Upstart pulled off the fastest revenue growth but had the weakest full year guidance update among the peers. The stock is down 52.7% since the results and currently trades at $36.95.
Read our full, actionable report on Upstart 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 $134 million, up 15% year on year, beating analyst expectations by 1.21%. It was a mixed quarter for the company, with a narrow beat of top-line revenue estimates, but guidance for the next quarter below analysts' expectations.
The stock is down 29% since the results and currently trades at $37.63.
Read our full, actionable report on Q2 Holdings here, it's free.
The author has no position in any of the stocks mentioned