Reflecting On Vertical Software Stocks' Q3 Earnings: Bentley Systems (NASDAQ:BSY)

Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Bentley Systems (NASDAQ:BSY) and the best and worst performers in the vertical software industry.

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 4 vertical software stocks we track reported a very strong Q3. As a group, revenues beat analysts’ consensus estimates by 2.5% while next quarter’s revenue guidance was in line.

Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 13.1% since the latest earnings results.

Bentley Systems (NASDAQ:BSY)

Pioneering the concept of "digital twins" for infrastructure projects long before it became an industry buzzword, Bentley Systems (NASDAQ:BSY) provides software solutions that help engineers design, build, and operate infrastructure projects across sectors including roads, bridges, utilities, mining, and industrial facilities.

Bentley Systems reported revenues of $375.5 million, up 12% year on year. This print exceeded analysts’ expectations by 1.6%. Overall, it was a strong quarter for the company with a solid beat of analysts’ EBITDA estimates and a decent beat of analysts’ billings estimates.

CEO Nicholas Cumins said, “AI was top of mind at our Year in Infrastructure conference, where we engaged with industry leaders on its potential to help close the engineering capacity gap and deliver the infrastructure the world needs. Our Going Digital Award submissions illustrated how users are already applying AI in meaningful ways, and we unveiled new AI capabilities across our portfolio—underscoring Bentley’s comprehensive and principled approach to Infrastructure AI. We are excited about the long-term opportunity AI represents for our users and for Bentley.

Bentley Systems delivered the weakest performance against analyst estimates of the whole group. Unsurprisingly, the stock is down 19.8% since reporting and currently trades at $39.24.

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

Best Q3: Alarm.com (NASDAQ:ALRM)

Processing over 325 billion data points annually from more than 150 million connected devices, Alarm.com (NASDAQ:ALRM) provides cloud-based platforms that enable residential and commercial property owners to remotely monitor and control their security, video, energy, and other connected devices.

Alarm.com reported revenues of $256.4 million, up 6.6% year on year, outperforming analysts’ expectations by 2.2%. The business had an exceptional quarter with a solid beat of analysts’ EBITDA estimates and full-year EPS guidance exceeding analysts’ expectations.

The market seems happy with the results as the stock is up 7.6% since reporting. It currently trades at $50.73.

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

Weakest Q3: Guidewire Software (NYSE:GWRE)

With its systems powering the operations of hundreds of insurance brands across 42 countries, Guidewire Software (NYSE:GWRE) provides a technology platform that helps property and casualty insurance companies manage their core operations, digital engagement, and analytics.

Guidewire Software reported revenues of $332.6 million, up 26.5% year on year, exceeding analysts’ expectations by 4.6%. It was a satisfactory quarter as it also posted an impressive beat of analysts’ EBITDA estimates but a significant miss of analysts’ billings estimates.

Guidewire Software delivered the weakest full-year guidance update in the group. As expected, the stock is down 24.7% since the results and currently trades at $163.38.

Read our full analysis of Guidewire Software’s results here.

Manhattan Associates (NASDAQ:MANH)

Built on a "versionless" cloud architecture that delivers quarterly updates to all customers, Manhattan Associates (NASDAQ:MANH) develops cloud-based software that helps retailers, wholesalers, and manufacturers manage their supply chains, inventory, and omnichannel operations.

Manhattan Associates reported revenues of $275.8 million, up 3.4% year on year. This number beat analysts’ expectations by 1.6%. It was a very strong quarter as it also put up an impressive beat of analysts’ EBITDA estimates and full-year EPS guidance exceeding analysts’ expectations.

Manhattan Associates achieved the highest full-year guidance raise but had the slowest revenue growth among its peers. The stock is down 15.4% since reporting and currently trades at $173.23.

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

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