As the craze of earnings season draws to a close, here's a look back at some of the most exciting (and some less so) results from Q2. Today we are looking at the HR software stocks, starting with Paycor (NASDAQ:PYCR).
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 mixed Q2; on average, revenues beat analyst consensus estimates by 4.68%, while on average next quarter revenue guidance was 0.12% above consensus. Technology stocks have been hit hard by fears of higher interest rates as investors search for near-term cash flows and HR software stocks have not been spared, with share prices down 12% since the previous earnings results, on average.
Weakest Q2: 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 $140 million, up 26.2% year on year, beating analyst expectations by 2.59%. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and full year. Additionally, next quarter's adjusted operating profit guide was also below expectations.
“Paycor delivered strong revenue growth of 26% for the quarter and 29% for the year, driven by continued robust demand for our open, modern HCM solution,” said Raul Villar, Jr., Chief Executive Officer of Paycor.
Paycor delivered the weakest full year guidance update of the whole group. The stock is down 1.09% since the results and currently trades at $22.62.Is now the time to buy Paycor? Read our full report on Paycor here.
Best Q2: 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 $30.4 million, up 49.9% year on year, beating analyst expectations by 19.4%. It was an exceptional quarter for the company, with an impressive beat of analysts' revenue estimates and full-year revenue guidance exceeding analysts' expectations.
Asure Software achieved the strongest analyst estimates beat, fastest revenue growth, and highest full year guidance raise among its peers. The stock is down 30.9% since the results and currently trades at $9.27.
Is now the time to buy Asure Software? Access our full analysis of the earnings results here, it's free.
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 $365.9 million, up 21.5% year on year, beating analyst expectations by 2.13%. It was a weaker quarter for the company, with a decline in its gross margin and decelerating customer growth.
The stock is up 0.04% since the results and currently trades at $67.03.
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 $308.5 million, up 34.7% year on year, beating analyst expectations by 2.29%. It was a mixed quarter for the company, with underwhelming revenue guidance for the next year and a decline in its gross margin. On the other hand, the company beat analysts' revenue expectations this quarter and raised its long-term adjusted EBITDA and free cash flow targets.
The stock is down 13% since the results and currently trades at $184.99.
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 $401.1 million, up 26.6% year on year, in line with analyst expectations. It was a slower quarter for the company, with a decline in its gross margin and underwhelming revenue guidance for the next quarter.
Paycom Software had the weakest performance against analyst estimates among the peers. The stock is down 30.7% since the results and currently trades at $257.11.
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The author has no position in any of the stocks mentioned