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Finance and HR Software Stocks Q2 Teardown: Workday (NASDAQ:WDAY) Vs The Rest


Jabin Bastian /
2022/10/06 3:20 am EDT

Earnings results often give us a good indication of what direction the company will take in the months ahead. With Q2 now behind us, let’s have a look at Workday (NASDAQ:WDAY) 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 16 finance and HR software stocks we track reported a decent Q2; on average, revenues beat analyst consensus estimates by 4.24%, while on average next quarter revenue guidance was 2.63% above consensus. Tech stocks have been under pressure as inflation makes their long-dated profits less valuable, but finance and HR software stocks held their ground better than others, with the share prices up 0.58% since the previous earnings results, on average.

Workday (NASDAQ:WDAY)

Founded by industry veterans Aneel Bushri and Dave Duffield after their former company PeopleSoft was acquired by Oracle in a hostile takeover, Workday (NASDAQ:WDAY) provides cloud-based software for organizations to manage and plan finance and human resources.

Workday reported revenues of $1.53 billion, up 21.8% year on year, beating analyst expectations by 1.11%. It was a decent quarter for the company, with topline results surpassing expectations. 

"We continue to see a strong global demand for our products, underscoring how organizations are continuing to drive digital transformation across finance and HR to support the changing world of work," said Aneel Bhusri, co-founder, co-CEO, and chairman, Workday.

Workday Total Revenue

The stock is down 0.69% since the results and currently trades at $161.28.

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

Best Q2: Flywire (NASDAQ:FLYW)

Originally created to process international tuition payments for universities, Flywire (NASDAQ:FLYW) is a cross border payments processor and software platform focusing on complex, high-value transactions like education, healthcare and B2B payments.

Flywire reported revenues of $56.5 million, up 52.9% year on year, beating analyst expectations by 18.7%. It was an exceptional quarter for the company, with an impressive beat of analyst estimates and a very optimistic guidance for the next quarter.

Flywire Total Revenue

Flywire pulled off the strongest analyst estimates beat and highest full year guidance raise among its peers. The stock is up 5.25% since the results and currently trades at $24.84.

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

Slowest Q2: Intuit (NASDAQ:INTU)

Created in 1983 when founder Scott Cook watched his wife struggle to reconcile the family's checkbook, Intuit provides tax and accounting software for small and medium-sized businesses.

Intuit reported revenues of $2.41 billion, down 5.74% year on year, beating analyst expectations by 3.61%. It was a weak quarter for the company, with an underwhelming guidance for the next year and a slow revenue growth.

Intuit had the slowest revenue growth in the group. The stock is down 7.83% since the results and currently trades at $414.16.

Read our full analysis of Intuit's results here.

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 $110.9 million, up 26.1% year on year, beating analyst expectations by 7.26%. It was a very strong quarter for the company, with a full year guidance beating analysts' expectations.

The stock is up 7.53% since the results and currently trades at $33.25.

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

Avalara (NYSE:AVLR)

Founded by Scott McFarlane in 2004, Avalara (NYSE:AVLR) offers software as a service that provides companies with real-time information on how much tax to charge and automates tax compliance.

Avalara reported revenues of $208.5 million, up 23.3% year on year, a slight miss on analyst expectations. It was a weaker quarter for the company, with a miss of the top line analyst estimates and a decline in net revenue retention rate.

Avalara had the weakest performance against analyst estimates among the peers. The company added 950 customers to a total of 20,110. The stock is down 3.37% since the results and currently trades at $92.50.

Avalara has agreed to be acquired by Vista Equity Partners in an all-cash transaction that values Avalara at $8.4 billion.

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

The author has no position in any of the stocks mentioned