Looking back on vertical software stocks’ Q1 earnings, we examine this quarter’s best and worst performers, including Q2 Holdings (NYSE: QTWO) 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 0.6% below.

Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 7.4% since the latest earnings results.

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. This print exceeded analysts’ expectations by 0.9%. Overall, it was a very strong quarter for the company with an impressive beat of analysts’ billings estimates and EBITDA guidance for next quarter exceeding analysts’ expectations.

Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 15.8% since reporting and currently trades at $44.21.

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

Best Q1: Adobe (NASDAQ: ADBE)

Originally named after Adobe Creek that ran behind co-founder John Warnock's house, Adobe (NASDAQ: ADBE) develops software products used for digital content creation, document management, and marketing solutions across desktop, mobile, and cloud platforms.

Adobe reported revenues of $6.62 billion, up 12.7% year on year, outperforming analysts’ expectations by 2.6%. The business had an exceptional quarter with a solid beat of analysts’ billings estimates and EPS guidance for next quarter exceeding analysts’ expectations.

Adobe pulled off the highest guidance raise 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 10.6% since reporting. It currently trades at $195.58.

Is now the time to buy Adobe? 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.

Interestingly, the stock is up 5.3% since the results and currently trades at $32.83.

Read our full analysis of Upstart’s results here.

Veeva Systems (NYSE: VEEV)

Originally named "Verticals onDemand" before rebranding in 2009, Veeva Systems (NYSE: VEEV) provides cloud software, data solutions, and consulting services that help life sciences companies develop and bring products to market more efficiently.

Veeva Systems reported revenues of $882.9 million, up 16.3% year on year. This number topped analysts’ expectations by 2.9%. It was a very strong quarter as it also logged an impressive beat of analysts’ billings estimates and full-year EPS guidance exceeding analysts’ expectations.

The stock is down 10.4% since reporting and currently trades at $160.18.

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

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 met analysts’ expectations. More broadly, it was a mixed quarter as it also produced a solid beat of analysts’ EBITDA estimates.

Toast had the weakest performance against analyst estimates among its peers. The stock is down 11.3% since reporting and currently trades at $26.05.

Read our full, actionable report on Toast 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 9 Best Market-Beating Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.