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Editorial Advisory Board

  • Professor Andrea M. Armani, University of Southern California
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  • Mohan Wang, Ph.D., University of Oxford
  • Professor Xuchen Wang, Harbin Engineering University
  • Professor Stefan Witte, Delft University of Technology

Vertical Software Stocks Q4 Highlights: Toast (NYSE:TOST)

TOST Cover Image

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 Q4, starting with Toast (NYSE: TOST).

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 14 vertical software stocks we track reported a satisfactory Q4. As a group, revenues beat analysts’ consensus estimates by 3.3% 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 19.6% since the latest earnings results.

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 $1.34 billion, up 29.2% year on year. This print exceeded analysts’ expectations by 1.7%. Overall, it was a very strong quarter for the company with EBITDA guidance for next quarter exceeding analysts’ expectations.

“Toast had a strong close to 2024, capping off a transformational year where we added a record 28,000 net locations, grew our recurring gross profit streams1 34%, delivered Adjusted EBITDA of $373 million, and achieved our first year of GAAP profitability,” said Toast CEO and Co-Founder Aman Narang.

Toast Total Revenue

The stock is down 18.9% since reporting and currently trades at $32.45.

We think Toast is a good business, but is it a buy today? Read our full report here, it’s free.

Best Q4: Upstart (NASDAQ: UPST)

Founded by the former head of Google's enterprise business, Upstart (NASDAQ: UPST) is an AI-powered lending platform facilitating loans for banks and consumers.

Upstart reported revenues of $219 million, up 56.1% year on year, outperforming analysts’ expectations by 20.1%. The business had an exceptional quarter with EBITDA guidance for next quarter exceeding analysts’ expectations.

Upstart Total Revenue

Upstart delivered the biggest analyst estimates beat, fastest revenue growth, and highest full-year guidance raise among its peers. Although it had a fine quarter compared to its peers, the market seems unhappy with the results as the stock is down 43.9% since reporting. It currently trades at $37.80.

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

Weakest Q4: 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 $565.1 million, up 2.7% year on year, exceeding analysts’ expectations by 1.9%. Still, it was a softer quarter as it posted full-year EPS guidance missing analysts’ expectations.

As expected, the stock is down 21.4% since the results and currently trades at $149.

Read our full analysis of PTC’s results here.

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 $183 million, up 12.9% year on year. This number beat analysts’ expectations by 1.7%. Overall, it was a very strong quarter as it also recorded EBITDA guidance for next quarter exceeding analysts’ expectations.

The stock is down 19.5% since reporting and currently trades at $74.11.

Read our full, actionable report on Q2 Holdings here, it’s free.

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 $141.4 million, up 14.3% year on year. This print met analysts’ expectations. Taking a step back, it was a weaker quarter as it recorded full-year guidance of slowing revenue growth and full-year EPS guidance missing analysts’ expectations.

nCino had the weakest full-year guidance update among its peers. The stock is down 26.7% since reporting and currently trades at $20.62.

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


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