Q2 Earnings Roundup: Paylocity (NASDAQ:PCTY) And The Rest Of The HR Software Segment
The end of an earnings season can be a great time to assess how companies are handling the current business environment and discover new stocks. Let’s take a look at how Paylocity (NASDAQ:PCTY) and the rest of the HR software stocks fared in Q2.
Modern HR software has two powerful benefits: cost savings and ease of use. For cost savings, businesses large and small much prefer the flexibility of cloud-based, web-browser-delivered software paid for on a subscription basis rather than the hassle and complexity of purchasing and managing on-premise enterprise software. On the usability side, the consumerization of business software creates seamless experiences whereby multiple standalone processes like payroll processing and compliance are aggregated into a single, easy-to-use platform.
The 6 HR software stocks we track reported a mixed Q2; on average, revenues beat analyst consensus estimates by 4.68% while next quarter's revenue guidance was 0.12% above consensus. Higher interest rates have hurt growth companies as investors search for near-term cash flows, and while some of the HR software stocks have fared somewhat better than others, they have not been spared, with share prices declining 6.88% on average since the previous earnings results.
Paylocity (NASDAQ:PCTY)
Founded by payroll software veteran Steve Sarowitz in 1997, Paylocity (NASDAQ:PCTY) is a provider of payroll and HR software for small and medium-sized enterprises.
Paylocity reported revenues of $308.5 million, up 34.7% year on year, topping analyst expectations by 2.29%. It was a mixed quarter for the company, with a decent beat of analysts' revenue estimates but underwhelming revenue guidance for the next year.
“Recurring & other revenue grew 30% in fiscal 23 as we continue to provide the most modern software in the industry. Our sustained investment in product development allows us to continue to expand our product suite, evidenced by the recent announcement of several new premium offerings and feature enhancements including Advanced Scheduling, Learning Management, and Market Pay. We’re also proud to see our commitment to ongoing product innovation recognized in the marketplace with Paylocity recently being named as a Leader in NelsonHall’s 2023 Next-Generation HCM Technology NEAT report for both the Small / Medium and Mid / Large market segments,” said Steve Beauchamp, Co-Chief Executive Officer of Paylocity.
The stock is down 4.19% since the results and currently trades at $203.79.
Is now the time to buy Paylocity? Access our full analysis of the earnings results here, it's free.
Best Q2: Asure (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 reported revenues of $30.4 million, up 49.9% year on year, outperforming analyst expectations by 19.4%. It was an exceptional quarter for the company, with an impressive beat of analysts' revenue estimates and full-year revenue guidance exceeding analysts' expectations.
Asure delivered the biggest analyst estimates beat, fastest revenue growth, and highest full-year guidance raise among its peers. The stock is down 33.3% since the results and currently trades at $8.94.
Is now the time to buy Asure? Access our full analysis of the earnings results here, it's free.
Weakest Q2: 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 $140 million, up 26.2% year on year, exceeding analyst expectations by 2.59%. It was a weak quarter for the company, with underwhelming revenue guidance for the next year and underwhelming revenue guidance for the next quarter.
Paycor had the weakest full-year guidance update in the group. The stock is up 7.26% since the results and currently trades at $24.53.
Read our full analysis of Paycor's results here.
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 $401.1 million, up 26.6% year on year, in line with analyst expectations. It was a slower quarter for the company, with a decline in its gross margin and underwhelming revenue guidance for the next quarter.
Paycom had the weakest performance against analyst estimates among its peers. The stock is down 26.3% since the results and currently trades at $273.33.
Read our full, actionable report on Paycom here, it's free.
Paychex (NASDAQ:PAYX)
One of the oldest service providers in the industry, Paychex (NASDAQ:PAYX) offers its customers payroll and HR software solutions.
Paychex reported revenues of $1.29 billion, up 6.62% year on year, in line with analyst expectations. It was a decent quarter for the company, with a meaningful improvement in its gross margin.
Paychex had the slowest revenue growth among its peers. The stock is up 5.42% since the results and currently trades at $119.23.
Read our full, actionable report on Paychex 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
