The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how the finance and HR software stocks have fared in Q3, starting with Bill.com (NYSE:BILL).
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 mixed Q3; on average, revenues beat analyst consensus estimates by 3% while next quarter's revenue guidance was 1.9% below consensus. Stocks have been under pressure as inflation (despite slowing) makes their long-dated profits less valuable, but finance and HR software stocks held their ground better than others, with share prices down 0.9% on average since the previous earnings results.
Started by René Lacerte in 2006 after selling his previous payroll and accounting software company PayCycle to Intuit, Bill.com (NYSE:BILL) is a software as a service platform that aims to make payments and billing processes easier for small and medium-sized businesses.
Bill.com reported revenues of $305 million, up 32.6% year on year, topping analyst expectations by 2.1%. It was a weak quarter for the company, with full-year revenue guidance missing analysts' expectations and underwhelming revenue guidance for the next quarter.
“We delivered strong first quarter results as we executed on our strategy to be the essential financial operations platform for SMBs,” said René Lacerte, BILL CEO and Founder.
Bill.com delivered the weakest full-year guidance update of the whole group. The stock is down 17.4% since the results and currently trades at $73.88.
Is now the time to buy Bill.com? 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 $108.9 million, down 43.2% year on year, outperforming analyst expectations by 14.1%. It was an incredible quarter for the company, with a significant improvement in its gross margin and an impressive beat of analysts' revenue estimates.
Marqeta pulled off the biggest analyst estimates beat but had the slowest revenue growth among its peers. The stock is up 14.6% since the results and currently trades at $6.13.
Is now the time to buy Marqeta? Access our full analysis of the earnings results here, it's free.
Weakest Q3: Paycom (NYSE:PAYC)
Founded in 1998 as one of the first online payroll companies, Paycom (NYSE:PAYC) provides software for small and medium-sized businesses (SMBs) to manage their payroll and HR needs in one place.
Paycom reported revenues of $406.3 million, up 21.6% year on year, falling short of analyst expectations by 1.2%. It was a weak quarter for the company, with full-year revenue guidance missing analysts' expectations.
Paycom had the weakest performance against analyst estimates in the group. The stock is down 20.5% since the results and currently trades at $194.74.
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 $1.87 billion, up 16.7% year on year, surpassing analyst expectations by 1.1%. It was a decent quarter for the company, with an improvement in its gross margin. A beat on non-GAAP operating income shows that expense control is solid and outperformance on the free cash flow line was also welcome. It was also encouraging that the company raised its full year outlook for both subscription revenue and non-GAAP operating margin.
The stock is up 18.1% since the results and currently trades at $280.49.
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 $2.98 billion, up 14.7% year on year, surpassing analyst expectations by 3.3%. It was a mixed quarter for the company, with a decent beat of analysts' revenue estimates but full-year revenue guidance missing analysts' expectations.
The stock is up 6.8% since the results and currently trades at $603.84.
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The author has no position in any of the stocks mentioned