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Paycor (NASDAQ:PYCR) Q3 Earnings: Leading The HR Software Pack


Adam Hejl /
2023/01/18 4:21 am EST
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Earnings results often give us a good indication of what direction the company will take in the months ahead. With Q3 now behind us, let’s have a look at Paycor (NASDAQ:PYCR) and its peers.

HR software benefits from dual trends around costs savings and ease of use. First is 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. Second is the consumerization of business software, whereby multiple standalone processes like payroll processing and compliance are aggregated into a single, easy to use platforms.

The 6 HR software stocks we track reported a decent Q3; on average, revenues beat analyst consensus estimates by 3.27%, while on average next quarter revenue guidance was 1.66% above consensus. There has been a stampede out of high valuation technology stocks as raising interest rates encourage investors to value profits over growth again, but HR software stocks held their ground better than others, with the share prices up 6.01% since the previous earnings results, on average.

Best Q3: Paycor (NASDAQ:PYCR)

Found in 1990 in Cincinnati, Ohio Paycor (NASDAQ: PYCR), provides software for small businesses to manage their payroll and HR needs in one place.

Paycor reported revenues of $118.3 million, up 27.5% year on year, beating analyst expectations by 4.42%. Despite the stock dropping on the results, it was a very strong quarter for the company, with full year guidance beating analysts' expectations.

“Paycor posted robust revenue growth of 28% year-over-year, driven by strong new client growth, cross-sales, and continued PEPM expansion,” said Raul Villar, Jr., Chief Executive Officer of Paycor.

Paycor Total Revenue

Paycor achieved the highest full year guidance raise of the whole group. The stock is down 12.9% since the results and currently trades at $24.02.

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

Paylocity (NASDAQ:PCTY)

Founded by payroll software veteran Steve Sarowitz in 1997, Paylocity (NASDAQ:PCTY) is a provider of payroll and human resources software for small and medium-sized enterprises.

Paylocity reported revenues of $253.2 million, up 39.3% year on year, beating analyst expectations by 5.65%. It was a very strong quarter for the company, with exceptional revenue growth and a solid beat of analyst estimates.

Paylocity Total Revenue

Paylocity scored the strongest analyst estimates beat and fastest revenue growth among its peers. The stock is down 5.88% since the results and currently trades at $198.54.

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

Slowest 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 $315.6 million, up 22.7% year on year, beating analyst expectations by 3.28%. It was a weaker quarter for the company, with a decline in gross margin and underwhelming revenue guidance for the next quarter.

Ceridian had the weakest full year guidance update in the group. The company added 120 customers to a total of 5,848. The stock is up 9.4% since the results and currently trades at $67.68.

Read our full analysis of Ceridian's results here.

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 $21.9 million, up 21.8% year on year, beating analyst expectations by 3.25%. It was a solid quarter for the company, with a significant improvement in gross margin.

The stock is up 51.7% since the results and currently trades at $9.94.

Read our full, actionable report on Asure Software here, it's free.

Paycom Software (NYSE:PAYC)

Founded in 1998 as one of the first online payroll companies. Today, Paycom (NYSE:PAYC) provides software for small and medium-sized businesses (SMBs) to manage their payroll and HR needs in one place.

Paycom Software reported revenues of $334.1 million, up 30.4% year on year, beating analyst expectations by 1.79%. It was a mixed quarter for the company, with very optimistic guidance for the next quarter but a decline in gross margin.

The stock is down 9.72% since the results and currently trades at $310.05.

Read our full, actionable report on Paycom Software here, it's free.

The author has no position in any of the stocks mentioned