Q3 Earnings Highlights: Zuora (NYSE:ZUO) Vs The Rest Of The Finance and HR Software Stocks
As the craze of earnings season draws to a close, here's a look back at some of the most exciting (and some less so) results from Q3. Today we are looking at the finance and HR software stocks, starting with Zuora (NYSE:ZUO).
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. Stocks have been under pressure as inflation (despite slowing) makes their long-dated profits less valuable, but finance and HR software stocks held their ground better than others, with share prices down 0.1% on average since the previous earnings results.
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 $109.8 million, up 8.7% year on year, topping analyst expectations by 1.1%. It was a decent quarter for the company, with a significant improvement in its gross margin. Non-GAAP operating profit and free cash flow exceeded expectations. While revenue guidance for next quarter narrowly missed analysts' expectations, full year guidance was raised for key line items like revenue, non-GAAP operating profit, and free cash flow.
“We continued to execute on our strategy in the third quarter, exceeding guidance on subscription revenue, total revenue and operating income,” said Tien Tzuo, Founder and CEO of Zuora.
The stock is up 2.8% since the results and currently trades at $8.57.
Is now the time to buy Zuora? 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 11.8% since the results and currently trades at $5.98.
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 and adjusted EBITDA guidance below estimates.
Paycom had the weakest performance against analyst estimates in the group. The stock is down 20.9% since the results and currently trades at $193.59.
Read our full analysis of Paycom's results here.
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 $317.6 million, up 25.4% 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 full-year revenue guidance missing analysts' expectations.
The stock is down 11.2% since the results and currently trades at $152.49.
Read our full, actionable report on Paylocity 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 $1.26 billion, up 5.7% year on year, falling short of analyst expectations by 0.7%. It was a weak quarter for the company, with a miss of analysts' revenue estimates and a decline in its gross margin.
The stock is down 4.3% since the results and currently trades at $122.3.
Read our full, actionable report on Paychex here, it's free.
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The author has no position in any of the stocks mentioned
