Looking back on vertical software stocks’ Q1 earnings, we examine this quarter’s best and worst performers, including Agilysys (NASDAQ: AGYS) 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, 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 Q1. As a group, revenues beat analysts’ consensus estimates by 2.2% while next quarter’s revenue guidance was in line.

While some vertical software stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 4.5% since the latest earnings results.

Agilysys (NASDAQ: AGYS)

With a tech stack that powers everything from check-in to checkout at some of the world's top hospitality venues, Agilysys (NASDAQ: AGYS) develops and provides cloud-based and on-premise software solutions for hotels, resorts, casinos, and restaurants to manage operations and enhance guest experiences.

Agilysys reported revenues of $82.95 million, up 11.7% year on year. This print exceeded analysts’ expectations by 1.7%. Overall, it was a very strong quarter for the company with a solid beat of analysts’ EBITDA estimates and full-year guidance of robust revenue growth.

Interestingly, the stock is up 28.2% since reporting and currently trades at $90.01.

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

Best Q1: Q2 Holdings (NYSE: QTWO)

With a platform powering digital services for approximately 25 million account holders across America, Q2 Holdings (NYSE: QTWO) provides cloud-based digital solutions that help financial institutions, fintechs, and alternative finance companies deliver modern banking experiences to their customers.

Q2 Holdings reported revenues of $216.5 million, up 14.1% year on year, outperforming analysts’ expectations by 0.9%. The business had a very strong quarter with an impressive beat of analysts’ billings estimates and EBITDA guidance for next quarter exceeding analysts’ expectations.

Although it had a fine quarter compared to its peers, the market seems unhappy with the results as the stock is down 15.5% since reporting. It currently trades at $44.37.

Is now the time to buy Q2 Holdings? Access our full analysis of the earnings results here, it’s free.

Weakest Q1: Upstart (NASDAQ: UPST)

Using over 2,500 data variables and trained on nearly 82 million repayment events, Upstart (NASDAQ: UPST) is an AI-powered lending platform that uses machine learning to help banks and credit unions more accurately assess borrower risk for personal loans, auto loans, and home equity lines of credit.

Upstart reported revenues of $308.2 million, up 44.4% year on year, exceeding analysts’ expectations by 1.7%. Still, it was a softer quarter as it posted a significant miss of analysts’ EBITDA estimates and full-year revenue guidance slightly missing analysts’ expectations.

Upstart delivered the fastest revenue growth but had the weakest full-year guidance update in the group. The stock is flat since the results and currently trades at $30.92.

Read our full analysis of Upstart’s results here.

Toast (NYSE: TOST)

Born from the frustrations of three friends waiting too long for their restaurant bill, Toast (NYSE: TOST) provides a cloud-based digital technology platform with software, payment processing, and hardware solutions built specifically for restaurants.

Toast reported revenues of $1.63 billion, up 21.9% year on year. This result was in line with analysts’ expectations. More broadly, it was a mixed quarter as it also recorded an impressive beat of analysts’ EBITDA estimates but EBITDA guidance for next quarter missing analysts’ expectations significantly.

Toast had the weakest performance against analyst estimates among its peers. The stock is down 15.6% since reporting and currently trades at $24.80.

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

nCino (NASDAQ: NCNO)

Born from the internal technology needs of a community bank in 2011, nCino (NASDAQ: NCNO) provides cloud-based software that helps financial institutions streamline client onboarding, loan origination, and account opening processes.

nCino reported revenues of $159.4 million, up 10.6% year on year. This print surpassed analysts’ expectations by 2.4%. It was a strong quarter as it also logged a solid beat of analysts’ billings and EBITDA estimates.

The stock is flat since reporting and currently trades at $15.25.

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

Market Update

Late in 2025 into early 2026, there was hand-wringing around artificial intelligence. For software companies, the fear was that AI would erode pricing power and compress margins as new tools made it easier to replicate what once required expensive enterprise platforms. Crypto investors had their own version of the same anxiety: if AI agents could trade, allocate capital, and manage wallets autonomously, what exactly was the long-term value of today’s crypto infrastructure?

These concerns triggered a noticeable rotation away from these sectors and into safer havens. But markets rarely dwell on one narrative for long. Spring 2026 came, and the focus shifted abruptly from technological disruption to geopolitical risk. The US’ conflict with Iran became the dominant driver of market psychology, and when geopolitics takes center stage, the script changes quickly. Investors stop debating growth rates and start worrying about oil supply, inflation, and global stability.

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