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 have a look at how the HR software stocks have fared in Q1, starting with Ceridian (NYSE:CDAY).
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 decent Q1; on average, revenues beat analyst consensus estimates by 2.82%, while on average next quarter revenue guidance was 1.31% above consensus. Tech stocks have had a rocky start in 2022, but HR software stocks held their ground better than others, with share price down 5.66% since earnings, on average.
Weakest Q1: 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 $293.3 million, up 25% year on year, beating analyst expectations by 1.33%. It was a slower quarter for the company, with a decline in gross margin and decelerating customer growth.
"I am very pleased with our strong start to the year. In the first quarter, Dayforce recurring revenue excluding float grew 31% year-over-year. And, Adjusted EBITDA of $57.4 million exceeded the high end of our guidance," said David Ossip, Chair and Co-CEO of Ceridian.
Ceridian delivered the weakest performance against analyst estimates and weakest full year guidance update of the whole group. The company added 175 customers to a total of 5,609. The stock is down 21.7% since the results and currently trades at $47.60.
Read our full report on Ceridian here, it's free.
Best Q1: 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 $245.9 million, up 32.2% year on year, beating analyst expectations by 1.79%. It was a very strong quarter for the company, with a significant improvement in gross margin and a solid top line growth.
Paylocity pulled off the fastest revenue growth among its peers. The stock is down 8.38% since the results and currently trades at $173.19.
Is now the time to buy Paylocity? Access our full analysis of the earnings results here, it's free.
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 $24.3 million, up 22.8% year on year, beating analyst expectations by 3.26%. It was a mixed quarter for the company, with a decent beat of analyst estimates but an underwhelming revenue guidance for the next quarter.
The stock is down 6.6% since the results and currently trades at $5.66.
Read our full analysis of Asure Software's results here.
Paychex (NASDAQ:PAYX)
One of the oldest payroll service providers, Paychex provides payroll and human resource (HR) solutions.
Paychex reported revenues of $1.14 billion, up 11.1% year on year, beating analyst expectations by 3.34%. It was a weak quarter for the company, with a decline in gross margin and a slow revenue growth.
Paychex had the slowest revenue growth among the peers. The stock is down 1.51% since the results and currently trades at $118.01.
Read our full, actionable report on Paychex here, it's free.
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 $122.5 million, up 22.7% year on year, beating analyst expectations by 4.21%. It was a strong quarter for the company, with a very optimistic guidance for the next quarter.
Paycor pulled off the strongest analyst estimates beat and highest full year guidance raise among the peers. The stock is down 1.05% since the results and currently trades at $26.16.
Read our full, actionable report on Paycor here, it's free.
The author has no position in any of the stocks mentioned