As we reflect back on the just completed Q1 finance and HR software sector earnings season, we dig into the relative performance of 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 14 finance and HR software stocks we track reported a solid Q1; on average, revenues beat analyst consensus estimates by 3.78%, while on average next quarter revenue guidance was 2.5% above consensus. Technology stocks have been hit hard on fears of higher interest rates as investors search for near-term cash flows, but finance and HR software stocks held their ground better than others, with the share prices up 9.11% since the previous earnings results, on average.
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 $1.68 billion, up 17.4% year on year, in line with analyst expectations. It was a solid quarter for the company, with a significant improvement in gross margin and a narrow beat of the top line analyst estimates.
"Workday had a strong first quarter, underscoring the value proposition of the full Workday platform combined with our unique approach to artificial intelligence and machine learning," said Aneel Bhusri, co-founder, co-CEO, and chair, Workday.
The stock is up 12.7% since the results and currently trades at $221.5.
Is now the time to buy Workday? Access our full analysis of the earnings results here, it's free.
Best Q1: 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 $94.4 million, up 46.2% year on year, beating analyst expectations by 14%. It was an incredible quarter for the company, with a significant improvement in gross margin and an impressive beat of analyst estimates.
Flywire scored the strongest analyst estimates beat and highest full year guidance raise among its peers. The stock is up 8.88% since the results and currently trades at $31.52.
Is now the time to buy Flywire? Access our full analysis of the earnings results here, it's free.
Slowest Q1: BlackLine (NASDAQ:BL)
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 $139 million, up 15.6% year on year, in line with analyst expectations. It was a weaker quarter for the company, with decelerating customer growth and declining gross margin.
The stock is up 7.13% since the results and currently trades at $54.68.
Founded in 2007, Zuora (NYSE:ZUO) offers software as a service platform that allows companies to bill and accept payments for recurring subscription products.
Zuora reported revenues of $103.1 million, up 10.6% year on year, in line with analyst expectations. It was a strong quarter for the company, with accelerating growth in large customers. In addition, the company provided favorable guidance for the next quarter, surpassing Consensus estimates for revenue.
The company added nine enterprise customers paying more than $100,000 annually to a total of 782. The stock is up 33.8% since the results and currently trades at $11.39.
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 $339.9 million, up 38.2% year on year, beating analyst expectations by 2.03%. It was a decent quarter for the company, with a significant improvement in gross margin. Additionally, the revenue guidance for the full year was roughly inline with Consensus.
The stock is down 1.61% since the results and currently trades at $180.7.
The author has no position in any of the stocks mentioned