US Application Software: 2Q26 Fins Software Preview: Cautious Optimism; Prefer BL and WK

Research evidence excerpt

US Application Software: 2Q26 Fins Software Preview: Cautious Optimism; Prefer BL and WK

Viewpoint |

27 Jul 2026 05:22:49 ET │ 33 pages

US Application Software

2Q26 Fins Software Preview: Cautious Optimism; Prefer BL and WK

CITI'S TAKE

Steven Enders, CFA AC

We enter 2Q26 financial software earnings with a cautiously optimistic view +1-415-951-1745

following the sector's valuation reset. While our proprietary CIO and CFO steven.enders@citi.com

surveys show mixed budget growth outlooks, solid SAP results provide a

positive read-through, and our partner checks indicate stable demand with George Kurosawa, CFA

early Verity AI adoption for BL. Investor focus will center on 2H pipeline +1-415-658-4247

opportunities, AI monetization, and signs of accelerating growth. We see george.kurosawa@citi.com

the best setup for BL and WK, which benefit from demand stability and high

short interest. Conversely, we are slightly more cautious on INTA's

upcoming FY27 guide and see execution risk for VERX, which requires a

significant 2H acceleration to meet its outlook.

Cautiously Optimistic on Financial Software — We enter 2Q26 earnings with a

cautiously optimistic view based on recent earnings read-thrus and survey data,

seeing sufficient support for modest beats and raises. Survey data was more mixed

with our CIO survey indicating an improved budget environment, including Fins

software returning to a net positive investment priority, while our CFO survey found

finance software budget growth is expected to slow in 2026 yet some better growth

for BL. Web traffic analysis suggests slowing seat-based trends for BL amid the

transition to platform pricing, while INTA shows improvement but lags new AI-

native competitors.