Looking back on finance and HR software stocks' Q3 earnings, we examine this quarter's best and worst performers, including Zuora (NYSE:ZUO) 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 15 finance and HR software stocks we track reported a mixed Q3; on average, revenues beat analyst consensus estimates by 3.13%, while on average next quarter revenue guidance was 1.54% above consensus. Tech stocks have been under pressure as inflation makes their long-dated profits less valuable, but finance and HR software stocks held their ground better than others, with the share prices up 12.8% since the previous earnings results, on average.
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 $101 million, up 13.2% year on year, in line with analyst expectations. It was a weaker quarter for the company, with underwhelming revenue guidance for the next quarter and slow revenue growth.
“We delivered third quarter results at the high end of guidance as companies across industries continue to lean into recurring revenue models. At the same time we’re making adjustments to our business to deliver meaningful profitability improvement in fiscal 2024,” said Tien Tzuo, founder and CEO of Zuora.
The stock is down 11.1% since the results and currently trades at $6.39.
Read our full report on Zuora here, it's free.
Best Q3: 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 $95.2 million, up 40.4% year on year, beating analyst expectations by 8.39%. It was a stunning quarter for the company, with a significant improvement in gross margin and very optimistic guidance for the next quarter.
Flywire pulled off the highest full year guidance raise among its peers. The stock is up 45.1% since the results and currently trades at $26.26.
Is now the time to buy Flywire? Access our full analysis of the earnings results here, it's free.
Workday (NASDAQ:WDAY)
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 $1.59 billion, up 16.2% year on year, beating analyst expectations by 0.85%. It was a weak quarter for the company, with slow revenue growth.
Workday had the weakest performance against analyst estimates in the group. The stock is up 13.5% since the results and currently trades at $162.81.
Read our full analysis of Workday'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 $1.19 billion, up 7.37% year on year, beating analyst expectations by 1.21%. It was a weaker quarter for the company, with slow revenue growth and a decline in gross margin.
Paychex had the slowest revenue growth among the peers. The stock is up 4.47% since the results and currently trades at $119.41.
Read our full, actionable report on Paychex here, it's free.
BlackLine (NASDAQ:BL)
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 $134.2 million, up 22.7% year on year, in line with analyst expectations. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and decelerating customer growth.
The company added 57 customers to a total of 4,060. The stock is up 48.4% since the results and currently trades at $72.79.
Read our full, actionable report on BlackLine here, it's free.
The author has no position in any of the stocks mentioned