Third Quarter Vertical Software Stock Overview: Agilysys (NASDAQ:AGYS) vs. Peers

As third-quarter earnings season comes to a close, let’s take a look at this quarter’s best and worst performers in the software vertical, including Agilysys (NASDAQ:) and its peers.

Software (ETR 🙂 is eating the world, and while a wide range of solutions, such as project management or videoconferencing software, can be useful for a wide range of industries, some have very specific needs. As a result, the software vertical, which addresses industry-specific workflows, is growing, fueled by pressure to improve productivity, whether in a life sciences, education or banking company.

The fifteen vertical software stocks we track reported a strong third quarter. As a group, revenues exceeded analyst consensus expectations by 3.4%, while revenue expectations for the next quarter were 0.7% above.

Fortunately, the companies’ share prices have been resilient, having risen an average of 8.6% since the last earnings results.

Agilysys (NASDAQ:AGYS)

Agilysys (NASDAQ:AGYS), originally a subsidiary of Pioneer-Standard Electronics that distributed electronic components, offers a software-as-service platform that allows hotels, resorts, restaurants and other hospitality businesses to manage their operations and workflows.

Agilysys reported revenue of $68.28 million, up 16.5% year over year. This print exceeded analyst expectations by 1.1%. Overall, it was a very strong quarter for the company, with an impressive return on analyst EBITDA estimates and full-year revenue guidance that exceeded analyst expectations.

Ramesh Srinivasan, President and CEO of Agilysys, commented: “We are pleased to report another set of excellent results with record revenue for the 11th consecutive quarter of $68.3 million and 16.5% higher than the comparable quarter of last year, total subscription revenue growth of 36.6%. and an adjusted EBITDA of 17.9% of sales. Revenue in the second quarter of fiscal 2025, July through September, measured in annual contract value, was the second highest in the company’s history. We have also made good progress with the integration of Book4Time into the business and with the steps taken towards realizing expected synergies and added value.

Interestingly, the stock is up 25.7% since reporting and is currently trading at $139.99.

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Best Q3: Upstart (NASDAQ:

Upstart (NASDAQ:UPST), founded by the former head of Google’s (NASDAQ:) business operations, is an AI-powered lending platform that powers banking and consumer lending.

Upstart reported revenue of $162.1 million, up 20.5% year over year, and exceeded analyst expectations by 7.9%. The company had a stunning quarter with a solid improvement in analyst EBITDA estimates and revenue expectations for the next quarter exceeding analyst expectations.

The market seems pleased with the results, as the stock is up 21.3% since reporting. It is currently trading at $67.31.

Weakest third quarter: Adobe (NASDAQ:

Adobe (NASDAQ:ADBE), one of Silicon Valley’s best-known software companies, is a leading provider of software as a service in digital design and document management.

Adobe reported revenue of $5.61 billion, up 11.1% year over year, beating analyst expectations by 1.2%. Still, it was a slower quarter as revenue expectations for the following quarter fell slightly short of analyst expectations and analyst expectations were not met.

As expected, the stock has fallen 18.8% since the results and is currently trading at $446.37.

Toast (NYSE:NYSE:)

Founded by three MIT engineers in a local bar in Cambridge, Toast (NYSE:TOST) provides integrated point-of-sale (POS) hardware, software and payment solutions for restaurants.

Toast reported revenue of $1.31 billion, up 26.5% year over year. This result exceeded analyst expectations by 1.1%. It was a very strong quarter as EBITDA guidance for the next quarter also exceeded analyst expectations.

The stock is up 14.8% since reporting and is currently trading at $37.49.

Olo (NYSE:OLO)

Olo (NYSE:OLO), founded by Noah Glass, who wanted to grab a quick cup of coffee on the way to work, provides restaurants and food retailers with software to manage food orders and deliveries.

Olo reported revenue of $71.85 million, up 24.3% year over year. This figure exceeded analyst expectations by 1.3%. Zooming out, it was a satisfying quarter as it also showed a solid improvement in analyst EBITDA estimates, but gross trading volume in line with analyst estimates.

The stock is up 32% since reporting and is currently trading at $7.51.

Market update

Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs and is moving closer to the 2% target. This disinflation has occurred without serious consequences for economic growth, indicating a soft landing success. The stock market boomed in 2024, boosted by recent interest rate cuts (0.5% in September and 0.25% each in November and December), and a notable rally followed Donald Trump’s victory in the presidential election in November, pushing the indices were pushed to historic highs. Nevertheless, the outlook for 2025 remains clouded by the pace and magnitude of future rate cuts and by potential changes to trade policy and corporate taxes once the Trump administration takes over. The path forward is marked by uncertainty.

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This content was originally published on Stock Story