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 finance and HR software stocks have fared in Q1, starting with Workiva (NYSE:WK).
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 16 finance and HR software stocks we track reported a decent Q1; on average, revenues beat analyst consensus estimates by 3.22%, while on average next quarter revenue guidance was 2.1% above consensus. Technology stocks have been hit hard on fears of higher interest rates, but finance and HR software stocks held their ground better than others, with share price down 5.23% since earnings, 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 $129.6 million, up 24.4% year on year, beating analyst expectations by 1.76%. It was a weaker quarter for the company, with an underwhelming revenue guidance for the next quarter and decelerating customer growth.
"The Workiva team generated strong revenue for the first quarter which resulted in growth of 26.1% in subscription & support revenue and 24.4% in total revenue," said Marty Vanderploeg, Chief Executive Officer.
The stock is down 33.7% since the results and currently trades at $62.49.
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 $64.5 million, up 43.4% year on year, beating analyst expectations by 13.5%. It was an exceptional quarter for the company, with an impressive beat of analyst estimates and a very optimistic guidance for the next quarter.
Flywire scored the strongest analyst estimates beat and highest full year guidance raise among its peers. The stock is down 0.52% since the results and currently trades at $21.01.
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Slowest Q1: 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 $93.1 million, up 16% year on year, beating analyst expectations by 1.03%. It was a weaker quarter for the company, with an underwhelming revenue guidance for the next quarter and decelerating growth in large customers.
The stock is down 6.5% since the results and currently trades at $8.91.
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.
The stock is down 4.31% since the results and currently trades at $25.30.
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.
The stock is down 6.83% since the results and currently trades at $176.13.
The author has no position in any of the stocks mentioned