Earnings results often indicate the direction a company will take in the coming months. Now that the second quarter is behind us, let’s take a look at Zuora (NYSE:) and its peers.
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 slower second quarter. As a group, revenues exceeded analyst consensus expectations by 1.5%, while revenue expectations for the next quarter were 0.5% below that.
After much tension, the Federal Reserve lowered its policy interest rate by 50 basis points (half a percent) in September 2024. This marks the central bank’s first easing of monetary policy since 2020 and the end of its most targeted anti-inflation campaign since the 1980s. Inflation started to spike in 2021 following the COVID-19 crisis due to a confluence of factors such as supply chain disruptions, labor shortages and stimulus spending. While CPI (inflation) numbers have been positive recently, employment measures have raised some concerns. Going forward, markets will debate whether this rate cut (and more potential rate cuts in 2024 and 2025) is the perfect timing to support the economy, or whether it’s a bit too late for a macro that’s already too much cooled down.
Fortunately, finance and HR software stocks have been resilient, with share prices up an average of 5.9% 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 strong quarter for the company with an impressive performance of analyst expectations and projected revenue figures for the next quarter.
“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 1.3% since reporting and is currently trading at $8.62.
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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 $160.5 million, up 11% year over year, and beat analyst expectations by 1.4%. The company had a strong quarter with accelerating customer growth and a decent improvement in analysts’ ARR (annual recurring revenue) estimates.
The market seems pleased with the results, as the stock is up 24.8% since reporting. It is currently trading at $55.05.
Slowest Second Quarter: Global Business Travel (NYSE:GBTG)
Global Business Travel (NYSE:GBTG) has close ties with American Express (NYSE:) and is a comprehensive travel and expense management provider to companies worldwide.
Global Business Travel reported revenue of $625 million, up 5.6% year over year and falling 1.1% short of analyst expectations. It was a disappointing quarter as full-year revenue expectations did not match analyst expectations.
Interestingly, the stock is up 27.5% since the results and is currently trading at $7.69.
Flywire (NASDAQ:)
Originally created to process international tuition payments for universities, Flywire (NASDAQ:FLYW) is a cross-border payments processor and software platform focused on complex, high-value transactions such as education, healthcare and B2B payments.
Flywire reported revenue of $103.7 million, up 22.2% year over year. This print exceeded analyst expectations by 3.3%. Zooming out, it was a strong quarter as it also delivered full-year revenue expectations that exceeded analyst expectations, but a decline in gross margin.
Flywire scored the fastest revenue growth among its competitors. The stock is down 7.9% since reporting and is currently trading at $16.39.
Paylocity (NASDAQ:)
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 $357.3 million, up 15.8% year over year. This figure exceeded analyst expectations by 2.1%. Apart from that, it was a weak quarter with disappointing revenue expectations for the next quarter.
Paylocity had the weakest full-year guidance update among its peers. The stock is up 9.3% since reporting and is currently trading at $161.99.
This content was originally published on Stock Story