To wrap up the first quarter results, we look at the numbers and key takeaways for the HR software stocks, including Dayforce (NYSE:DAY) and peers.
Modern HR software has two powerful benefits: cost savings and ease of use. To save costs, businesses of all sizes much prefer the flexibility of cloud-based software delivered through a web browser and paid for on a subscription basis, rather than the hassle and complexity of purchasing and managing business software on-premises. In terms of usability, the consumerization of enterprise software creates seamless experiences that merge multiple standalone processes, such as payroll and compliance, into a single, easy-to-use platform.
The six HR software stocks we track reported a slower first quarter; on average, revenues exceeded analyst consensus estimates by 0.7%. while revenue expectations for the next quarter were 0.5% below consensus. Stocks, especially growth stocks whose cash flows are more important to the story further into the future, had a good end to 2023. But the start of 2024 saw a more volatile stock performance due to mixed inflation data, and while some of the HR software stocks have done slightly better than others; they have collectively fallen, with share prices down an average of 1.4% since the previous earnings results.
Best First Quarter: Dayforce (NYSE:DAY)
Dayforce (NYSE:DAY), founded in 1992 as Ceridian, an outsourced payroll processor and transformed following the acquisition of Dayforce in 2012, is a provider of cloud-based payroll and HR software aimed at mid-market companies.
Dayforce reported revenue of $431.5 million, up 16.4% year over year, beating analyst expectations by 1.3%. It was a solid quarter for the company, with accelerating customer growth.
“I am pleased to report another strong quarter for Dayforce. We grew both revenue and operating profit, and we exceeded expectations on all key revenue and profitability measures,” said David Ossip, Chairman and CEO of Dayforce.
The stock is up 2.7% since the results and is currently trading at $63.04.
Is this the time to buy Dayforce? See our full analysis of earnings results here. It is free.
Payment Location (NASDAQ:PCTY)
Founded in 1997 by payroll software veteran Steve Sarowitz, Paylocity (NASDAQ:PCTY) is a provider of payroll and HR software for small and medium-sized businesses.
Paylocity reported revenue of $401.3 million, up 18.1% year over year, beating analyst expectations by 1%. It was a solid quarter for the company, with strong sales expectations for the next quarter.
Paylocity achieved the fastest revenue growth among its peers. The stock is up 10.4% since the results and is currently trading at $165.
Is Now the Time to Buy Paylocity? See our full analysis of earnings results here. It is free.
Weakest Quarter 1: Paychex (NASDAQ:PAYX)
Paychex (NASDAQ:PAYX), one of the oldest service providers in the industry, offers payroll and HR software solutions to its customers.
Paychex reported revenue of $1.44 billion, up 4.2% year over year, falling 1.2% short of analyst expectations. It was a weak quarter for the company, as analyst revenue expectations were not met.
Paychex had the weakest performance compared to analyst estimates in the group. The stock is up 4.8% since the results and is currently trading at $127.48.
Read our full analysis of Paychex’s results here.
Asure (NASDAQ:ASUR)
Asure (NASDAQ:ASUR), formed from the merger of two small workforce management companies in 2007, offers cloud-based payroll and HR software for small and medium-sized businesses (SMBs).
Asure reported revenue of $31.65 million, down 4.3% year over year, beating analyst expectations by 2%. It was a slower quarter for the company, with a miss in analyst expectations and disappointing revenue expectations for the next quarter.
Asure achieved the highest analyst expectations and the highest full-year guidance increase, but had the slowest revenue growth among its peers. The stock is down 3.7% since the results and is currently trading at $7.65.
Read our full, actionable report on Asure here. It is free.
Betaalcom (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 revenue of $499.9 million, up 10.7% year over year, in line with analyst expectations. It was a slower quarter for the company, with disappointing revenue expectations for the next quarter and a decline in gross margin.
The stock is down 2.7% since the results and is currently trading at $181.26.
Read our full, actionable report on Paycom here. It is free.
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