As the earnings season craze comes to a close, here’s a look back at some of the most exciting (and some not so) results from the second quarter. Today we’ll look at financial and HR software stocks, starting with Zuora (NYSE:).
Organizations are constantly looking for ways to improve organizational efficiency, whether it is financial planning, tax management or payroll. Financial and HR software are benefiting from the SaaSification of businesses large and small, who much prefer the flexibility of cloud-based, web browser-delivered, subscription-based software to the hassle and expense of purchasing and managing on a subscription basis. location business software.
The fifteen financial and HR software stocks we track reported a satisfactory second quarter. As a group, revenues exceeded analyst consensus expectations by 1.5%, while revenue expectations for the next quarter were 0.8% below that.
Fortunately, financial and HR software stocks have performed well, with share prices up an average of 11.7% since the last earnings results.
Best Second Quarter: Zuora (NYSE:ZUO)
Founded in 2007, Zuora (NYSE:ZUO) provides a software as a service platform that allows businesses to bill and accept payments for recurring subscription products.
Zuora reported revenue of $115.4 million, up 6.8% year over year. This print exceeded analyst expectations by 2.5%. Overall, it was a very strong quarter for the company, with a solid increase in analyst expectations and next quarter earnings per share expectations exceeding analyst expectations.
“I am proud of our ZEOs for delivering a solid second quarter,” said Tien Tzuo, Founder and CEO of Zuora.
Interestingly, the stock is up 16.3% since reporting and is currently trading at $9.90.
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Bill.com (NYSE:BILL)
Bill.com (NYSE:BILL), founded by René Lacerte in 2006 after selling his previous payroll and accounting software company PayCycle to Intuit (NASDAQ:), is a software-as-a-service platform that aims to make payments and billing processes simpler for small and medium-sized companies.
Bill.com reported revenue of $358.5 million, up 17.5% year over year, and beat analyst expectations by 3.3%. The company had a very strong quarter, with earnings per share expectations for next quarter exceeding analyst expectations and an impressive improvement in analyst EBITDA estimates.
The market seems pleased with the results, as the stock is up 35.7% since reporting. It is currently trading at $89.35.
Weakest second quarter: Asure (NASDAQ:)
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 $29.3 million, flat year-over-year, falling 6.5% short of analyst expectations. It was a disappointing quarter, as revenue expectations for the following quarter did not match analyst expectations.
Asure delivered the weakest performance against analyst estimates, the slowest revenue growth and the weakest full-year forecast update in the group. As expected, the stock has fallen 6.1% since the results and is currently trading at $9.32.
BlackLine (NASDAQ:BL)
Founded in 2001 by software engineer Therese Tucker, one of the few female founders to take their company public, BlackLine (NASDAQ:BL) provides software for organizations to automate accounting and financial tasks.
BlackLine reported revenue of $165.9 million, up 10.1% year over year. This result exceeded analyst expectations by 1.7%. Zooming out, it was a mixed quarter as it also showed impressive profit versus analyst EBITDA estimates, but customer growth slowed.
The company lost 2 customers for a total of 4,433. The stock is up 7.9% since reporting and is currently trading at $64.21.
Business Day (NASDAQ:)
Workday (NASDAQ:WDAY), founded by industry veterans Aneel Bushri and Dave Duffield after their former company PeopleSoft was acquired by Oracle (NYSE:) in a hostile takeover, provides cloud-based software for organizations to manage and plan finances and human resources.
Workday reported revenue of $2.16 billion, up 15.8% year over year. This figure exceeded analyst expectations by 1.4%. It was a strong quarter as it also delivered a solid gain from analyst annual recurring revenue estimates and an impressive gain from analyst EBITDA estimates.
The stock is flat since reporting and is currently trading at $272.76.
Market update
The Fed’s rate hikes in 2022 and 2023 successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without the economy entering a recession, pointing to a soft landing. This stability, combined with recent interest rate cuts (0.5% in September 2024 and 0.25% in November 2024), has led to a strong year for the stock market in 2024. Markets continued to rise following Donald Trump’s presidential victory in November , with major indices reaching equity market levels. record highs in the days after the election. Still, questions remain about the direction of economic policy as potential corporate tax rates and changes increase uncertainty heading into 2025.
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This content was originally published on Stock Story
