As we reflect back on the just completed Q3 finance and hr software sector earnings season, we dig into the relative performance of BlackLine (NASDAQ:BL) and its peers.
Organizations are constantly looking to improve organizational efficiencies, whether it is financial planning, tax management or payroll. Finance and HR software benefit from the SaaS-ification of businesses, large and small, who much prefer the flexibility of cloud-based, web-browser delivered software paid for on a subscription basis than the hassle and expense of purchasing and managing on-premise enterprise software.
The 17 finance and HR software stocks we track reported a strong Q3; on average, revenues beat analyst consensus estimates by 6.37%, while on average next quarter revenue guidance was 4.1% above consensus. Tech stocks have had a rocky start in 2022 and finance and HR software stocks have not been spared, with share price down 24.8% since earnings, on average.
Started in 2001 by software engineer Therese Tucker, one of the very few women founders who took their companies public, BlackLine (NASDAQ:BL) provides software for organizations to automate accounting and finance tasks.
BlackLine reported revenues of $109.4 million, up 20.8% year on year, beating analyst expectations by 2.18%. It was a decent quarter for the company, with a meaningful improvement in net revenue retention rate.
Marc Huffman, CEO, commented, “Our momentum continued in the third quarter driven by broad-based demand for our solutions and strong execution, resulting in another quarter of solid financial performance. Companies are emerging from the pandemic with a greater sense of urgency to upgrade outdated back-office systems and to improve their financial processes. We believe this is the beginning of the next large and enduring investment cycle in financial and accounting systems.”
The stock is down 30.4% since the results and currently trades at $89.72.
Is now the time to buy BlackLine? Access our full analysis of the earnings results here, it's free.
Best Q3: Marqeta (NASDAQ:MQ)
Founded by CEO Jason Gardner in 2009, Marqeta (NASDAQ: MQ) is an innovative card issuer that provides companies with the ability to issue and process virtual, physical, and tokenized credit and debit cards.
Marqeta reported revenues of $131.5 million, up 56% year on year, beating analyst expectations by 10.3%. It was a strong quarter for the company, with a significant improvement in gross margin and an impressive beat of analyst estimates.
The stock is down 41% since the results and currently trades at $14.75.
Is now the time to buy Marqeta? Access our full analysis of the earnings results here, it's free.
Weakest Q3: Ceridian (NYSE:CDAY)
Founded in 1992 as an outsourced payroll processor and transformed after the 2012 acquisition of Dayforce, Ceridian (NYSE:CDAY) is a provider of cloud based payroll and HR software targeted at mid-sized businesses.
Ceridian reported revenues of $257.2 million, up 25.8% year on year, beating analyst expectations by 1.19%. It was a weaker quarter for the company, with a decline in gross margin and decelerating customer growth.
Ceridian had the weakest full year guidance update in the group. The company added 63 customers to a total of 5,227. The stock is down 30% since the results and currently trades at $89.70.
Asure Software (NASDAQ:ASUR)
Created from the merger of two small workforce management companies in 2007, Asure (NASDAQ:ASUR) provides cloud based payroll and HR software for small and medium-sized businesses (SMBs).
Asure Software reported revenues of $17.9 million, up 12.2% year on year, beating analyst expectations by 4.24%. It was a strong quarter for the company, with a very optimistic guidance for the next quarter.
Asure Software delivered the highest full year guidance raise but had the slowest revenue growth among the peers. The stock is down 24.6% since the results and currently trades at $7.32.
One of the oldest payroll service providers, Paychex provides payroll and human resource (HR) solutions.
Paychex reported revenues of $1.1 billion, up 12.6% year on year, beating analyst expectations by 4.61%. It was an OK quarter for the company, with a solid beat of analyst estimates and measured revenue growth.
The stock is up 1.93% since the results and currently trades at $128.89.
The author has no position in any of the stocks mentioned