Q1 Vertical Software Earnings Review: First Prize Goes to Alarm.com (NASDAQ:ALRM)

Looking back on vertical software stocks’ Q1 earnings, we examine this quarter’s best and worst performers, including Alarm.com (NASDAQ:ALRM) 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 4 vertical software stocks we track reported a strong Q1. As a group, revenues beat analysts’ consensus estimates by 3.7% 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 6.7% since the latest earnings results.

Best Q1: Alarm.com (NASDAQ:ALRM)

Processing over 325 billion data points annually from more than 150 million connected devices, Alarm.com (NASDAQ:ALRM) provides cloud-based platforms that enable residential and commercial property owners to remotely monitor and control their security, video, energy, and other connected devices.

Alarm.com reported revenues of $265.2 million, up 11% year on year. This print exceeded analysts’ expectations by 5.6%. Overall, it was a very strong quarter for the company with a solid beat of analysts’ billings and EBITDA estimates.

Alarm.com pulled off the biggest analyst estimate beat and highest full-year guidance raise of the whole group. 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 2.2% since reporting and currently trades at $45.98.

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

Manhattan Associates (NASDAQ:MANH)

Built on a "versionless" cloud architecture that delivers quarterly updates to all customers, Manhattan Associates (NASDAQ:MANH) develops cloud-based software that helps retailers, wholesalers, and manufacturers manage their supply chains, inventory, and omnichannel operations.

Manhattan Associates reported revenues of $282.2 million, up 7.4% year on year, outperforming analysts’ expectations by 3.3%. The business had a strong quarter with full-year EPS guidance beating analysts’ expectations and a decent beat of analysts’ revenue estimates.

The market seems content with the results as the stock is up 3.2% since reporting. It currently trades at $139.24.

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

Bentley Systems (NASDAQ:BSY)

Pioneering the concept of "digital twins" for infrastructure projects long before it became an industry buzzword, Bentley Systems (NASDAQ:BSY) provides software solutions that help engineers design, build, and operate infrastructure projects across sectors including roads, bridges, utilities, mining, and industrial facilities.

Bentley Systems reported revenues of $424.2 million, up 14.5% year on year, exceeding analysts’ expectations by 1.2%. Still, it was a slower quarter as it posted a significant miss of analysts’ billings estimates.

Bentley Systems delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 5.3% since the results and currently trades at $30.37.

Read our full analysis of Bentley Systems’s results here.

Guidewire Software (NYSE:GWRE)

With its systems powering the operations of hundreds of insurance brands across 42 countries, Guidewire Software (NYSE:GWRE) provides a technology platform that helps property and casualty insurance companies manage their core operations, digital engagement, and analytics.

Guidewire Software reported revenues of $372.5 million, up 26.9% year on year. This number topped analysts’ expectations by 4.7%. It was a strong quarter as it also put up a solid beat of analysts’ billings estimates and an impressive beat of analysts’ revenue estimates.

Guidewire Software scored the fastest revenue growth but had the weakest full-year guidance update among its peers. The stock is down 22.4% since reporting and currently trades at $117.33.

Read our full, actionable report on Guidewire Software 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 Top 6 Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.