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 finance and HR software stocks fared in Q3, starting with Flywire (NASDAQ:FLYW).
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. As a group, revenues beat analysts’ consensus estimates by 1.4% while next quarter’s revenue guidance was 1% below.
Thankfully, share prices of the companies have been resilient as they are up 9.4% on average since the latest earnings results.
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 $156.8 million, up 27.2% year on year. This print exceeded analysts’ expectations by 7.1%. Overall, it was a very strong quarter for the company with full-year EBITDA guidance exceeding analysts’ expectations.
“Our third quarter results highlight our ability to capture higher payment volumes with new and existing clients, signaling the growth potential within our accounts and verticals.” said Mike Massaro, CEO of Flywire.
Flywire pulled off the biggest analyst estimates beat, fastest revenue growth, and highest full-year guidance raise of the whole group. Unsurprisingly, the stock is up 13.3% since reporting and currently trades at $20.73.
Is now the time to buy Flywire? Access our full analysis of the earnings results here, it’s free.
Best Q3: Bill.com (NYSE:BILL)
Started by René Lacerte in 2006 after selling his previous payroll and accounting software company PayCycle to Intuit, Bill.com (NYSE:BILL) is a software as a service platform that aims to make payments and billing processes easier for small and medium-sized businesses.
Bill.com reported revenues of $358.5 million, up 17.5% year on year, outperforming analysts’ expectations by 3.3%. The business had a very strong quarter with EPS guidance for next quarter exceeding analysts’ expectations and a solid beat of analysts’ EBITDA estimates.
The market seems happy with the results as the stock is up 35.3% since reporting. It currently trades at $89.10.
Is now the time to buy Bill.com? Access our full analysis of the earnings results here, it’s free.
Weakest Q3: 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 $29.3 million, flat year on year, falling short of analysts’ expectations by 6.5%. It was a disappointing quarter as it posted revenue guidance for next quarter missing analysts’ expectations significantly and a significant miss of analysts’ EBITDA estimates.
Asure delivered the weakest performance against analyst estimates, slowest revenue growth, and weakest full-year guidance update in the group. As expected, the stock is down 14.4% since the results and currently trades at $8.50.
Read our full analysis of Asure’s results here.
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 $167.5 million, up 16.6% year on year. This number beat analysts’ expectations by 3.3%. Overall, it was a strong quarter as it also recorded an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ billings estimates.
The stock is up 17.5% since reporting and currently trades at $19.58.
Read our full, actionable report on Paycor 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 $2.16 billion, up 15.8% year on year. This number beat analysts’ expectations by 1.4%. It was a strong quarter as it also logged a solid beat of analysts’ annual recurring revenue estimates and an impressive beat of analysts’ EBITDA estimates.
The stock is up 1.1% since reporting and currently trades at $273.50.
Read our full, actionable report on Workday here, it’s free.
Market Update
Thanks to the Fed's series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market has thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.
Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Growth Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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