Finance and HR Software Stocks Q3 Highlights: Workday (NASDAQ:WDAY)
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 take a look at how the finance and HR software stocks have fared in Q3, starting with Workday (NASDAQ:WDAY).
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 Q3; on average, revenues beat analyst consensus estimates by 3% while next quarter's revenue guidance was 1.9% below consensus. Valuation multiples for growth stocks have reverted to their historical means after reaching highs in early 2021, but finance and HR software stocks held their ground better than others, with the share prices up 0.1% on average since the previous earnings results.
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 $1.87 billion, up 16.7% year on year, topping analyst expectations by 1.1%. It was a decent quarter for the company, with an improvement in its gross margin. A beat on non-GAAP operating income shows that expense control is solid and outperformance on the free cash flow line was also welcome. It was also encouraging that the company raised its full year outlook for both subscription revenue and non-GAAP operating margin.
"Workday delivered a strong quarter, demonstrating how organizations across industries and geographies are continuing to place their trust in Workday," said Carl Eschenbach, co-CEO, Workday.
The stock is up 14% since the results and currently trades at $270.93.
Is now the time to buy Workday? Access our full analysis of the earnings results here, it's free.
Best Q3: Marqeta (NASDAQ:MQ)
Founded by CEO Jason Gardner in 2009, Marqeta (NASDAQ: MQ) is an innovative card issuer that provides companies with the ability to issue and process virtual, physical, and tokenized credit and debit cards.
Marqeta reported revenues of $108.9 million, down 43.2% year on year, outperforming analyst expectations by 14.1%. It was an incredible quarter for the company, with a significant improvement in its gross margin and an impressive beat of analysts' revenue estimates.
Marqeta scored the biggest analyst estimates beat but had the slowest revenue growth among its peers. The stock is up 18.2% since the results and currently trades at $6.33.
Is now the time to buy Marqeta? Access our full analysis of the earnings results here, it's free.
Weakest Q3: Paycom (NYSE:PAYC)
Founded in 1998 as one of the first online payroll companies, Paycom (NYSE:PAYC) provides software for small and medium-sized businesses (SMBs) to manage their payroll and HR needs in one place.
Paycom reported revenues of $406.3 million, up 21.6% year on year, falling short of analyst expectations by 1.2%. It was a weak quarter for the company, with full-year revenue guidance missing analysts' expectations and underwhelming revenue guidance for the next quarter.
Paycom had the weakest performance against analyst estimates in the group. The stock is down 18.5% since the results and currently trades at $199.45.
Read our full analysis of Paycom's results here.
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 $123.3 million, up 29.5% year on year, surpassing analyst expectations by 2.9%. It was an exceptional quarter for the company, with a significant improvement in its gross margin and optimistic revenue guidance for the next quarter.
Flywire pulled off the highest full-year guidance raise among its peers. The stock is down 18% since the results and currently trades at $22.71.
Read our full, actionable report on Flywire 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 $143.6 million, up 21.4% year on year, surpassing analyst expectations by 2.9%. It was a mixed quarter for the company, with a beat of analysts' revenue expectations, but underwhelming revenue guidance for the next quarter and a decline in its gross margin.
The stock is up 12.1% since the results and currently trades at $20.02.
Read our full, actionable report on Paycor here, it's free.
Join Paid Stock Investor Research
Help us make StockStory more helpful to investors like yourself. Join our paid user research session and receive a $50 Amazon gift card for your opinions. Sign up here.
The author has no position in any of the stocks mentioned
