Vertical Software Stocks Q2 Results: Benchmarking nCino (NASDAQ:NCNO)

Earnings results often indicate what direction a company will take in the months ahead. With Q2 behind us, let’s have a look at nCino (NASDAQ:NCNO) 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 15 vertical software stocks we track reported a mixed Q2. As a group, revenues beat analysts’ consensus estimates by 1.9% while next quarter’s revenue guidance was 1.2% above.

Stocks--especially those trading at higher multiples--had a strong end of 2023, but this year has seen periods of volatility. Mixed signals about inflation have led to uncertainty around rate cuts. Thankfully, vertical software stocks have been resilient with share prices up 6.8% on average since the latest earnings results.

nCino (NASDAQ:NCNO)

Founded in 2011 in North Carolina, nCino (NASDAQ:NCNO) makes cloud-based operating systems for banks and provides that software-as-a-service.

nCino reported revenues of $132.4 million, up 12.9% year on year. This print exceeded analysts’ expectations by 1%. Despite the top-line beat, it was still a softer quarter for the company with a miss of analysts’ billings estimates and a decline in its gross margin.

"We are pleased to report that we again exceeded quarterly guidance for total and subscription revenues as well as non-GAAP operating income," said Pierre Naudé, Chairman and CEO at nCino.

The stock is down 15.4% since reporting and currently trades at $29.17.

Read our full report on nCino here, it’s free.

Best Q2: Olo (NYSE:OLO)

Founded by Noah Glass, who wanted to get a cup of coffee faster on his way to work, Olo (NYSE:OLO) provides restaurants and food retailers with software to manage food orders and delivery.

Olo reported revenues of $70.5 million, up 27.6% year on year, outperforming analysts’ expectations by 4.1%. The business had a very strong quarter with an impressive beat of analysts’ GMV (gross merchandise value) estimates and a solid beat of analysts’ billings estimates.

Olo delivered the 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 2.1% since reporting. It currently trades at $4.69.

Is now the time to buy Olo? Access our full analysis of the earnings results here, it’s free.

Weakest Q2: PTC (NASDAQ:PTC)

Used to design the Airbus A380 and Boeing 787 Dreamliner commercial airplanes, PTC’s (NASDAQ:PTC) software-as-service platform helps engineers and designers create and test products before manufacturing.

PTC reported revenues of $518.6 million, down 4.4% year on year, falling short of analysts’ expectations by 2.8%. It was a softer quarter as it posted a miss of analysts’ billings estimates and a decline in its gross margin.

PTC delivered the weakest performance against analyst estimates and weakest full-year guidance update in the group. As expected, the stock is down 5.1% since the results and currently trades at $168.69.

Read our full analysis of PTC’s results here.

Autodesk (NASDAQ:ADSK)

Founded in 1982 by John Walker and growing into one of the industry's behemoths, Autodesk (NASDAQ:ADSK) makes computer-aided design (CAD) software for engineering, construction, and architecture companies.

Autodesk reported revenues of $1.51 billion, up 11.9% year on year. This number beat analysts’ expectations by 1.5%. More broadly, it was a softer quarter as it recorded a miss of analysts’ billings estimates and a miss of analysts’ ARR (annual recurring revenue) estimates.

The stock is flat since reporting and currently trades at $258.97.

Read our full, actionable report on Autodesk here, it’s free.

Doximity (NYSE:DOCS)

Founded in 2010 and named for a combination of “docs” and “proximity”, Doximity (NYSE: DOCS) is the leading social network for U.S. medical professionals.

Doximity reported revenues of $126.7 million, up 16.8% year on year. This print surpassed analysts’ expectations by 5.7%. Aside from that, it was a decent quarter as it also recorded optimistic revenue guidance for the next quarter but a miss of analysts’ billings estimates.

The stock is up 43.4% since reporting and currently trades at $36.80.

Read our full, actionable report on Doximity here, it’s free.

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