As we reflect back on the just completed Q2 finance and HR software sector earnings season, we dig into the relative performance of Workiva (NYSE:WK) 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 mixed Q2; on average, revenues beat analyst consensus estimates by 4.09%, while on average next quarter revenue guidance was 0.15% above consensus. Increasing interest rates hurt growth companies 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 3.7% since the previous earnings results, on average.
Founded in 2010, Workiva (NYSE:WK) offers software as a service product that makes financial and compliance reporting easier, especially for publicly traded corporations.
Workiva reported revenues of $155 million, up 17.8% year on year, beating analyst expectations by 1.05%. It was a mixed quarter for the company, with a meaningful improvement in its net revenue retention rate but underwhelming revenue guidance for the next quarter.
The stock is up 9.78% since the results and currently trades at $112.83.
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 $84.9 million, up 50.1% year on year, beating analyst expectations by 15.5%. It was an exceptional quarter for the company, with an impressive beat of analysts' revenue estimates and full-year revenue guidance exceeding analysts' expectations.
Flywire delivered the fastest revenue growth and highest full year guidance raise among its peers. The stock is up 0.16% since the results and currently trades at $32.22.
Is now the time to buy Flywire? Access our full analysis of the earnings results here, it's free.
Weakest Q2: Zuora (NYSE:ZUO)
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 $108 million, up 9.39% year on year, missing analyst expectations by 0.69%. It was a weak quarter for the company, with full-year revenue guidance missing analysts' expectations.
Zuora had the weakest performance against analyst estimates and weakest full year guidance update in the group. The stock is down 2.48% since the results and currently trades at $9.44.
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 $144.6 million, up 12.5% year on year, in line with analyst expectations. It was a slower quarter for the company, with declining revenue retention rate.
The company added 43 customers to a total of 4,279. The stock is up 6.15% since the results and currently trades at $55.68.
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 $140 million, up 26.2% year on year, beating analyst expectations by 2.59%. It was a weak quarter for the company, with revenue guidance for next year suggesting a significant slowdown in demand. Its revenue guidance for next quarter also missed Wall Street's estimates.
The stock is down 0.83% since the results and currently trades at $22.72.
The author has no position in any of the stocks mentioned