Q2 Earnings Highlights: Q2 Holdings (NYSE:QTWO) Vs The Rest Of The Vertical Software Stocks
As vertical software stocks’ Q2 earnings season wraps, let's dig into this quarter's best and worst performers, including Q2 Holdings (NYSE:QTWO) 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. There has been a stampede out of expensive technology stocks as higher interest rates encourage investors to value profits over growth, and vertical software stocks have not been spared, with share prices down 17.5% on average, since the previous earnings results.
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.
“We continued our solid bookings performance in the second quarter, closing out our best first half of bookings in company history,” said Q2 CEO Matt Flake.
The stock is down 7.3% since the results and currently trades at $31.74.
Read our full report on Q2 Holdings 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 13.4% since the results and currently trades at $17.51.
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 35.9% since the results and currently trades at $2.02.
Read our full analysis of Matterport's results here.
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 $590.2 million, up 10.5% year on year, surpassing analyst expectations by 1.39%. It was a mixed quarter for the company, with underwhelming revenue guidance for the next quarter.
The stock is up 3.15% since the results and currently trades at $198.65.
Read our full, actionable report on Veeva Systems here, it's free.
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, surpassing 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 down 3.73% since the results and currently trades at $65.22.
Read our full, actionable report on Agilysys here, it's free.
Join Paid Stock Investor Research
Help us make StockStory more helpful to investors like yourself. Join our paid user research session and receive a $50 Amazon gift card for your opinions. Sign up here.
The author has no position in any of the stocks mentioned
