Looking back on vertical software stocks’ Q3 earnings, we examine this quarter’s best and worst performers, including Upstart (NASDAQ: UPST) 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, some have very specific needs. As a result, vertical software, which addresses industry-specific workflows, is growing and fueled by the pressures to improve productivity, whether it be for a life sciences, education, or banking company.

The 13 vertical software stocks we track reported a strong Q3. As a group, revenues beat analysts’ consensus estimates by 3.9% while next quarter’s revenue guidance was in line.

In light of this news, share prices of the companies have held steady as they are up 2.3% on average since the latest earnings results.

Weakest Q3: Upstart (NASDAQ: UPST)

Using over 2,500 data variables and trained on nearly 82 million repayment events, Upstart (NASDAQ: UPST) is an AI-powered lending platform that uses machine learning to help banks and credit unions more accurately assess borrower risk for personal loans, auto loans, and home equity lines of credit.

Upstart reported revenues of $277.1 million, up 70.9% year on year. This print fell short of analysts’ expectations by 1.3%. Overall, it was a softer quarter for the company with full-year revenue guidance missing analysts’ expectations and a significant miss of analysts’ transaction volume estimates.

Upstart scored the fastest revenue growth but had the weakest performance against analyst estimates of the whole group. Unsurprisingly, the stock is up 5.4% since reporting and currently trades at $49.12.

Is now the time to buy Upstart? Access our full analysis of the earnings results here, it’s free for active Edge members.

Best Q3: nCino (NASDAQ: NCNO)

Born from the internal technology needs of a community bank in 2011, nCino (NASDAQ: NCNO) provides cloud-based software that helps financial institutions streamline client onboarding, loan origination, and account opening processes.

nCino reported revenues of $152.2 million, up 9.6% year on year, outperforming analysts’ expectations by 3.3%. The business had an exceptional quarter with an impressive beat of analysts’ billings estimates and EPS guidance for next quarter exceeding analysts’ expectations.

The market seems content with the results as the stock is up 2.1% since reporting. It currently trades at $26.11.

Is now the time to buy nCino? Access our full analysis of the earnings results here, it’s free for active Edge members.

Doximity (NYSE: DOCS)

With over 80% of U.S. physicians as members of its digital community, Doximity (NYSE: DOCS) operates a digital platform that enables physicians and other healthcare professionals to collaborate, stay current with medical news, manage their careers, and conduct virtual patient visits.

Doximity reported revenues of $168.5 million, up 23.2% year on year, exceeding analysts’ expectations by 7.2%. It may have had the worst quarter among its peers, but its results were still good as it also locked in an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ revenue estimates.

As expected, the stock is down 29.4% since the results and currently trades at $44.20.

Read our full analysis of Doximity’s results here.

Autodesk (NASDAQ: ADSK)

Starting with AutoCAD in the 1980s and evolving into a comprehensive design ecosystem, Autodesk (NASDAQ: ADSK) provides software solutions for architecture, engineering, construction, manufacturing, and entertainment industries to design, simulate, and visualize projects.

Autodesk reported revenues of $1.85 billion, up 18% year on year. This result surpassed analysts’ expectations by 2.4%. It was a very strong quarter as it also recorded full-year EPS guidance exceeding analysts’ expectations and a solid beat of analysts’ EBITDA estimates.

The stock is up 2% since reporting and currently trades at $300.34.

Read our full, actionable report on Autodesk here, it’s free for active Edge members.

Cadence Design Systems (NASDAQ: CDNS)

Powering the chips behind everything from smartphones to AI accelerators for over 35 years, Cadence Design Systems (NASDAQ: CDNS) provides essential computational software, hardware, and intellectual property used by engineers to design and verify advanced electronic systems and semiconductors.

Cadence Design Systems reported revenues of $1.34 billion, up 10.1% year on year. This number beat analysts’ expectations by 0.9%. Overall, it was a strong quarter as it also logged a solid beat of analysts’ EBITDA estimates and full-year EPS guidance beating analysts’ expectations.

The stock is down 4.8% since reporting and currently trades at $334.47.

Read our full, actionable report on Cadence Design Systems here, it’s free for active Edge members.

Market Update

In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.

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