The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how vertical software stocks fared in Q3, starting with Manhattan Associates (NASDAQ: MANH).

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 strong Q3. As a group, revenues beat analysts’ consensus estimates by 1.8% while next quarter’s revenue guidance was 2% above.

Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 5.8% since the latest earnings results.

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 $266.7 million, up 11.8% year on year. This print exceeded analysts’ expectations by 1.3%. Overall, it was a very strong quarter for the company with a solid beat of analysts’ EBITDA estimates and full-year EPS guidance exceeding analysts’ expectations.

“Manhattan delivered record third quarter and year-to-date results. Our fundamentals are strong, and we continue to deliver a balanced financial performance across top-line growth and profitability and industry leading innovation each quarter,” said Manhattan Associates president and CEO Eddie Capel.

Manhattan Associates delivered the weakest full-year guidance update of the whole group. Unsurprisingly, the stock is down 6.6% since reporting and currently trades at $273.43.

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

Best Q3: 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 $240.5 million, up 8.4% year on year, outperforming analysts’ expectations by 3.9%. The business had an exceptional quarter with an impressive beat of analysts’ EBITDA estimates.

Alarm.com achieved the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 6.7% since reporting. It currently trades at $60.96.

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

Weakest Q3: 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 $335.2 million, up 9.3% year on year, falling short of analysts’ expectations by 1.7%. It was a slower quarter as it posted a slight miss of analysts’ billings estimates and EBITDA in line with analysts’ estimates.

Bentley delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 9.7% since the results and currently trades at $45.05.

Read our full analysis of Bentley’s results here.

Guidewire (NYSE: GWRE)

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

Guidewire reported revenues of $262.9 million, up 26.8% year on year. This number surpassed analysts’ expectations by 3.5%. Overall, it was a very strong quarter as it also logged an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ billings estimates.

Guidewire achieved the fastest revenue growth and highest full-year guidance raise among its peers. The stock is down 13.6% since reporting and currently trades at $178.58.

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

Market Update

Thanks to the Fed's series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% each in November and December), and a notable surge followed Donald Trump's presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by the pace and magnitude of future rate cuts as well as potential changes in trade policy and corporate taxes once the Trump administration takes over. The path forward is marked by uncertainty.

Want to invest in winners with rock-solid fundamentals? Check out our 9 Best Market-Beating Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

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.