As the Q2 earnings season wraps, let’s dig into this quarter’s best and worst performers in the finance and hr software industry, including BILL (NYSE: BILL) 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 13 finance and hr software stocks we track reported a mixed Q2. As a group, revenues beat analysts’ consensus estimates by 1.8% while next quarter’s revenue guidance was 1% below.
Thankfully, share prices of the companies have been resilient as they are up 8.5% on average since the latest earnings results.
BILL (NYSE: BILL)
Transforming the messy back-office financial operations that plague small business owners, BILL (NYSE: BILL) provides a cloud-based platform that automates accounts payable, accounts receivable, and expense management for small and midsize businesses.
BILL reported revenues of $383.3 million, up 11.5% year on year. This print exceeded analysts’ expectations by 2%. Despite the top-line beat, it was still a slower quarter for the company with full-year EPS guidance missing analysts’ expectations and EPS guidance for next quarter missing analysts’ expectations significantly.
Interestingly, the stock is up 29.9% since reporting and currently trades at $54.16.
Is now the time to buy BILL? Access our full analysis of the earnings results here, it’s free.
Best Q2: Marqeta (NASDAQ: MQ)
Powering the cards behind innovative fintech services like Block's Cash App, Marqeta (NASDAQ: MQ) provides a cloud-based platform that allows businesses to create customized payment card programs and process card transactions.
Marqeta reported revenues of $150.4 million, up 20.1% year on year, outperforming analysts’ expectations by 6.9%. The business had a very strong quarter with a solid beat of analysts’ EBITDA and total payment volume estimates.
Marqeta pulled off the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 6.1% since reporting. It currently trades at $6.04.
Is now the time to buy Marqeta? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: Paychex (NASDAQ: PAYX)
Once known as the go-to service for small business payroll needs, Paychex (NASDAQ: PAYX) provides payroll processing, HR services, employee benefits administration, and insurance solutions to small and medium-sized businesses.
Paychex reported revenues of $1.43 billion, up 10.2% year on year, falling short of analysts’ expectations by 1.1%. It was a disappointing quarter as it posted a miss of analysts’ EBITDA estimates.
As expected, the stock is down 12% since the results and currently trades at $133.93.
Read our full analysis of Paychex’s results here.
Intuit (NASDAQ: INTU)
Originally named after its founding product "Intuitive for the first-time user," Intuit (NASDAQ: INTU) provides financial management software and services including TurboTax, QuickBooks, Credit Karma, and Mailchimp to help consumers and small businesses manage their finances.
Intuit reported revenues of $3.83 billion, up 20.3% year on year. This print topped analysts’ expectations by 2.1%. Aside from that, it was a satisfactory quarter as it also recorded an impressive beat of analysts’ billings estimates but full-year guidance of slowing revenue growth.
The stock is down 4.3% since reporting and currently trades at $668.05.
Read our full, actionable report on Intuit here, it’s free.
Paylocity (NASDAQ: PCTY)
Operating in a field where companies traditionally juggled multiple disconnected systems, Paylocity (NASDAQ: PCTY) provides cloud-based human capital management and payroll software solutions that help businesses manage their workforce and HR processes.
Paylocity reported revenues of $400.7 million, up 12.2% year on year. This number beat analysts’ expectations by 3.1%. Taking a step back, it was a satisfactory quarter as it also produced an impressive beat of analysts’ EBITDA estimates but full-year guidance of slowing revenue growth.
The stock is down 5.3% since reporting and currently trades at $172.04.
Read our full, actionable report on Paylocity here, it’s free.
Market Update
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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