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A Look Back at HR Software Stocks' Q2 Earnings: Ceridian (NYSE:CDAY) Vs The Rest Of The Pack


Radek Strnad /
2022/10/05 3:22 am EDT
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Looking back on HR software stocks' Q2 earnings, we examine this quarter’s best and worst performers, including Ceridian (NYSE:CDAY) 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 solid Q2; on average, revenues beat analyst consensus estimates by 3.51%, while on average next quarter revenue guidance was 2.8% above consensus. Increasing interest rates hurt growth companies as investors search for near-term cash flows, but HR software stocks held their ground better than others, with the share prices up 4.62% since the previous earnings results, on average.

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 $301.2 million, up 20.2% year on year, beating analyst expectations by 2.27%. It was a decent quarter for the company, with a significant improvement in gross margin but decelerating customer growth.

Ceridian Total Revenue

The stock is up 3.42% since the results and currently trades at $60.72.

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

Best 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 $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 and a solid beat of analyst estimates.

Paycor Total Revenue

Paycor scored the strongest analyst estimates beat among its peers. The stock is up 7.53% since the results and currently trades at $33.25.

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

Slowest 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 $20.3 million, up 18.2% year on year, in line with analyst expectations. It was a weaker quarter for the company, with a decline in gross margin and a full year guidance missing analysts' expectations.

Asure Software had the weakest performance against analyst estimates and weakest full year guidance update in the group. The stock is up 0.67% since the results and currently trades at $5.20.

Read our full analysis of Asure Software's results here.

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 $228.9 million, up 36.7% year on year, beating analyst expectations by 5.04%. It was a strong quarter for the company, with a very optimistic guidance for the next quarter.

Paylocity pulled off the fastest revenue growth and highest full year guidance raise among the peers. The stock is up 10.6% since the results and currently trades at $250.47.

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

Paychex (NASDAQ:PAYX)

One of the oldest payroll service providers, Paychex provides payroll and human resource (HR) solutions.

Paychex reported revenues of $1.2 billion, up 11.3% year on year, beating analyst expectations by 3.5%. It was a solid quarter for the company, with a significant improvement in gross margin.

Paychex had the slowest revenue growth among the peers. The stock is up 2.13% since the results and currently trades at $115.68.

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

The author has no position in any of the stocks mentioned