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 Q1, starting with Bill.com (NYSE:BILL).
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 satisfactory Q1. As a group, revenues beat analysts’ consensus estimates by 1.4% while next quarter’s revenue guidance was 1.2% below.
Thankfully, share prices of the companies have been resilient as they are up 5.7% on average since the latest earnings results.
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 $358.2 million, up 10.9% year on year. This print exceeded analysts’ expectations by 0.8%. Overall, it was a strong quarter for the company with EPS guidance for next quarter exceeding analysts’ expectations and a solid beat of analysts’ EBITDA estimates.
The stock is down 4.1% since reporting and currently trades at $45.59.
We think Bill.com is a good business, but is it a buy today? Read our full report here, it’s free.
Best Q1: 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 $133.5 million, up 17% year on year, outperforming analysts’ expectations by 5%. The business had a very strong quarter with a solid beat of analysts’ EBITDA estimates.
Flywire delivered the biggest analyst estimates beat among its peers. The market seems content with the results as the stock is up 2% since reporting. It currently trades at $10.25.
Is now the time to buy Flywire? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: Global Business Travel (NYSE:GBTG)
Holding close ties to American Express, Global Business Travel (NYSE:GBTG) is a comprehensive travel and expense management services provider to corporations worldwide.
Global Business Travel reported revenues of $621 million, up 1.8% year on year, falling short of analysts’ expectations by 1.9%. It was a disappointing quarter as it posted full-year EBITDA guidance missing analysts’ expectations.
Global Business Travel delivered the weakest performance against analyst estimates and slowest revenue growth in the group. As expected, the stock is down 3.6% since the results and currently trades at $6.64.
Read our full analysis of Global Business Travel’s results here.
Paylocity (NASDAQ:PCTY)
Founded by payroll software veteran Steve Sarowitz in 1997, Paylocity (NASDAQ:PCTY) is a provider of payroll and HR software for small and medium-sized enterprises.
Paylocity reported revenues of $454.5 million, up 13.3% year on year. This print beat analysts’ expectations by 2.9%. It was a very strong quarter as it also put up an impressive beat of analysts’ EBITDA estimates.
The stock is down 4.2% since reporting and currently trades at $186.12.
Read our full, actionable report on Paylocity here, it’s free.
Workiva (NYSE:WK)
Founded in 2010, Workiva (NYSE:WK) offers software as a service product that makes financial and compliance reporting easier, especially for publicly traded corporations.
Workiva reported revenues of $206.3 million, up 17.4% year on year. This result surpassed analysts’ expectations by 1.1%. Taking a step back, it was a satisfactory quarter as it also logged an impressive beat of analysts’ EBITDA estimates but EPS guidance for next quarter missing analysts’ expectations.
The company added 24 enterprise customers paying more than $100,000 annually to reach a total of 2,079. The stock is down 6.4% since reporting and currently trades at $69.55.
Read our full, actionable report on Workiva 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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