Let’s dig into the relative performance of Agilysys (NASDAQ: AGYS) and its peers as we unravel the now-completed Q2 vertical software earnings season.
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 14 vertical software stocks we track reported a very strong Q2. As a group, revenues beat analysts’ consensus estimates by 4.1% while next quarter’s revenue guidance was in line.
In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.
Weakest Q2: Agilysys (NASDAQ: AGYS)
With a tech stack that powers everything from check-in to checkout at some of the world's top hospitality venues, Agilysys (NASDAQ: AGYS) develops and provides cloud-based and on-premise software solutions for hotels, resorts, casinos, and restaurants to manage operations and enhance guest experiences.
Agilysys reported revenues of $76.68 million, up 20.7% year on year. This print exceeded analysts’ expectations by 3.1%. Despite the top-line beat, it was still a slower quarter for the company with a significant miss of analysts’ EBITDA estimates.
Agilysys delivered the weakest full-year guidance update of the whole group. The stock is down 10.4% since reporting and currently trades at $105.
Read our full report on Agilysys here, it’s free.
Best Q2: 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 $257.3 million, up 102% year on year, outperforming analysts’ expectations by 13.6%. The business had an exceptional quarter with EBITDA guidance for next quarter exceeding analysts’ expectations and a solid beat of analysts’ EBITDA estimates.
Upstart delivered the biggest analyst estimates beat, fastest revenue growth, and highest full-year guidance raise among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 30.6% since reporting. It currently trades at $57.35.
Is now the time to buy Upstart? Access our full analysis of the earnings results here, it’s free.
Veeva Systems (NYSE: VEEV)
Originally named "Verticals onDemand" before rebranding in 2009, Veeva Systems (NYSE: VEEV) provides cloud software, data solutions, and consulting services that help life sciences companies develop and bring products to market more efficiently.
Veeva Systems reported revenues of $789.1 million, up 16.7% year on year, exceeding analysts’ expectations by 2.7%. It was a satisfactory quarter as it also posted EPS guidance for next quarter beating analysts’ expectations but a miss of analysts’ billings estimates.
As expected, the stock is down 1.2% since the results and currently trades at $290.70.
Read our full analysis of Veeva Systems’s results here.
Toast (NYSE: TOST)
Born from the frustrations of three friends waiting too long for their restaurant bill, Toast (NYSE: TOST) provides a cloud-based digital technology platform with software, payment processing, and hardware solutions built specifically for restaurants.
Toast reported revenues of $1.55 billion, up 24.8% year on year. This print surpassed analysts’ expectations by 2.1%. It was a strong quarter as it also logged an impressive beat of analysts’ EBITDA estimates and full-year EBITDA guidance slightly topping analysts’ expectations.
The stock is down 22.4% since reporting and currently trades at $37.
Read our full, actionable report on Toast here, it’s free.
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 $145.9 million, up 15.2% year on year. This result topped analysts’ expectations by 4.5%. Overall, it was a very strong quarter as it also recorded an impressive beat of analysts’ billings estimates and EBITDA guidance for next quarter exceeding analysts’ expectations.
The stock is up 26.7% since reporting and currently trades at $74.40.
Read our full, actionable report on Doximity here, it’s free.
Market Update
Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.
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