As the Q2 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the vertical software industry, including Veeva Systems (NYSE:VEEV) 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 15 vertical software stocks we track reported a mixed Q2. As a group, revenues beat analysts’ consensus estimates by 1.9% while next quarter’s revenue guidance was 1.1% above.

Inflation progressed towards the Fed's 2% goal recently, leading the Fed to reduce its policy rate by 50bps (half a percent or 0.5%) in September 2024. This is the first cut in four years. While CPI (inflation) readings have been supportive lately, employment measures have bordered on worrisome. The markets will be debating whether this rate cut's timing (and more potential ones in 2024 and 2025) is ideal for supporting the economy or a bit too late for a macro that has already cooled too much.

Luckily, vertical software stocks have performed well with share prices up 20.5% on average since the latest earnings results.

Veeva Systems (NYSE:VEEV)

Built on top of Salesforce as one of the first vertical-focused cloud platforms, Veeva (NYSE:VEEV) provides data and customer relationship management (CRM) software for organizations in the life sciences industry.

Veeva Systems reported revenues of $676.2 million, up 14.6% year on year. This print exceeded analysts’ expectations by 1.2%. Overall, it was a strong quarter for the company with full-year revenue guidance exceeding analysts’ expectations and a meaningful improvement in its gross margin.

"It was another quarter of great execution, with major product advances in clinical and CRM that position us well for the industry cloud opportunity we see ahead," said CEO Peter Gassner.

Interestingly, the stock is up 9% since reporting and currently trades at $217.33.

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

Best Q2: Olo (NYSE:OLO)

Founded by Noah Glass, who wanted to get a cup of coffee faster on his way to work, Olo (NYSE:OLO) provides restaurants and food retailers with software to manage food orders and delivery.

Olo reported revenues of $70.5 million, up 27.6% year on year, outperforming analysts’ expectations by 4.1%. The business had a very strong quarter with full-year revenue guidance exceeding analysts’ expectations and an impressive beat of analysts’ GMV (gross merchandise value) estimates.