A Look Back at Vertical Software Stocks' Q2 Earnings: Agilysys (NASDAQ:AGYS) Vs The Rest Of The Pack
As we reflect back on the just completed Q2 vertical software sector earnings season, we dig into the relative performance of Agilysys (NASDAQ:AGYS) 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 17 vertical software stocks we track reported a slower Q2; on average, revenues beat analyst consensus estimates by 1.45% while next quarter's revenue guidance was 2.63% below consensus. Tech stocks have been under pressure as inflation makes their long-dated profits less valuable, and vertical software stocks have not been spared, with share prices down 13.7% on average, since the previous earnings results.
Agilysys (NASDAQ:AGYS)
Originally a subsidiary of Pioneer-Standard Electronics that distributed electronic components, Agilysys (NASDAQ:AGYS) offers a software-as-service platform that helps hotels, resorts, restaurants, and other hospitality businesses manage their operations and workflows.
Agilysys reported revenues of $56.1 million, up 18% year on year, topping analyst expectations by 1.49%. It was a slower quarter for the company, with a decline in its gross margin and full-year revenue guidance missing analysts' expectations.
The stock is up 0.06% since the results and currently trades at $67.78.
Read our full report on Agilysys 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 $978 million, up 44.9% year on year, outperforming analyst expectations by 3.46%. It was a strong quarter for the company, with strong sales guidance for the next quarter and a decent beat of analysts' revenue estimates.
The stock is down 10.9% since the results and currently trades at $18.
Is now the time to buy Toast? Access our full analysis of the earnings results here, it's free.
Weakest Q2: Matterport (NASDAQ:MTTR)
Founded in 2011 before any mass market VR headset was released, Matterport (NASDAQ:MTTR) provides the hardware and software necessary to turn real-world spaces into 3D visualization.
Matterport reported revenues of $39.6 million, up 38.9% year on year, in line with analyst expectations. It was a weak quarter for the company, with full-year revenue guidance missing analysts' expectations and underwhelming revenue guidance for the next quarter.
The stock is down 32.1% since the results and currently trades at $2.14.
Read our full analysis of Matterport's results here.
Cadence (NASDAQ:CDNS)
With the name chosen to reflect the idea of a repeating pattern or rhythm in electronic design, Cadence Design Systems (NASDAQ:CDNS) offers a software-as-a-service platform for semiconductor engineering and design.
Cadence reported revenues of $976.6 million, up 13.9% year on year, falling short of analyst expectations by 0.08%. It was a weaker quarter for the company, with underwhelming revenue guidance for the next quarter.
The stock is up 4.28% since the results and currently trades at $251.42.
Read our full, actionable report on Cadence 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 to provide online banking and consumer lending services to their clients.
Q2 Holdings reported revenues of $154.5 million, up 10.1% year on year, in line with analyst expectations. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and full-year revenue guidance missing analysts' expectations.
The stock is down 5.14% since the results and currently trades at $32.48.
Read our full, actionable report on Q2 Holdings here, it's free.
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The author has no position in any of the stocks mentioned
