Q1 Rundown: Bentley (NASDAQ:BSY) Vs Other Vertical Software Stocks

Earnings results often give us a good indication of what direction the company will take in the months ahead. With Q1 now behind us, let’s have a look at Bentley (NASDAQ:BSY) 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, there are industries that have very specific needs. Whether it is life-sciences, education or banking, the demand for so called vertical software, addressing industry specific workflows, is growing, fueled by the pressures on improving productivity and quality of offerings.

The 4 vertical software stocks we track reported a decent Q1; on average, revenues beat analyst consensus estimates by 3.4%, while on average next quarter revenue guidance was 0.53% above consensus. Tech stocks have been hit the hardest as investors start to value profits over growth, but vertical software stocks held their ground better than others, with the share prices up 11.6% since the previous earnings results, on average.

Bentley (NASDAQ:BSY)

Founded by brothers Keith and Barry Bentley, Bentley Systems (NASDAQ:BSY) offers a software-as-a-service platform that addresses the lifecycle of infrastructure projects such as road networks, tunnel systems, and wastewater facilities.

Bentley reported revenues of $314.4 million, up 14.1% year on year, beating analyst expectations by 5.28%. It was a strong quarter for the company, with a solid beat of analyst estimates. The company's outlook for 2023 was slightly above for ARR (annual recurring revenue) and revenue and nicely ahead for operating margin.

CEO Greg Bentley said, “Our robust operating results for 23Q1 continue to demonstrate the resilience of our end-markets, the predictability of our accretive business model, and the consistency of our execution. Most notably, ARR growth (year-over-year business performance, in constant currency) accelerated to 13%. Among infrastructure sectors, the trends were consistent with the previous quarter, with very strong growth in resources, strong growth in public works / utilities, solid growth in industrial, and commercial / facilities flat. Application consumption seasonally regained growth momentum, and our E365 and Virtuosity initiatives continue their upward inflection.

The stock is up 26.5% since the results and currently trades at $53.15.

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

Best Q1: Manhattan Associates (NASDAQ:MANH)

Boasting major consumer staples and pharmaceutical companies as clients, Manhattan Associates (NASDAQ:MANH) offers a software-as-service platform that helps customers manage their supply chains.

Manhattan Associates reported revenues of $221 million, up 23.5% year on year, beating analyst expectations by 10.2%. It was an impressive quarter for the company, with a solid beat of analyst estimates.  Revenue and EPS guidance for the current year were raised by 4% and 7.5%, respectively, and the updated guidance topped Consensus estimates.

Manhattan Associates delivered the strongest analyst estimates beat, fastest revenue growth, and highest full year guidance raise among its peers. The stock is up 27.3% since the results and currently trades at $194.35.

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

Weakest Q1: Guidewire Software (NYSE:GWRE)

Founded by two individuals involved in the development of leading procurement software Ariba, Guidewire (NYSE:GWRE) offers a software-as-a-service platform for insurance companies to manage, analyze and sell their products. to manage their workflows.

Guidewire Software reported revenues of $207.5 million, up 5.09% year on year, missing analyst expectations by 3.05%. It was a weak quarter for the company, with a miss of the top line analyst estimates and a decline in gross margin.

Guidewire Software had the weakest performance against analyst estimates and weakest full year guidance update in the group. The stock is down 9.86% since the results and currently trades at $74.67.

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

Alarm.com (NASDAQ:ALRM)

Founded in 2000 as a business unit within MicroStrategy, Alarm.com (NASDAQ:ALRM) is a software-as-a-service platform that enables users to control their security systems and smart home appliances from a single app.

Alarm.com reported revenues of $209.7 million, up 2.08% year on year, beating analyst expectations by 1.17%. It was a decent quarter for the company, with a significant improvement in gross margin. Guidance for revenue and adjusted EBITDA were raised for the full year, with both metrics in line with Consensus.

Alarm.com had the slowest revenue growth among the peers. The stock is up 2.57% since the results and currently trades at $49.09.

Read our full, actionable report on Alarm.com here, it's free.

The author has no position in any of the stocks mentioned