The end of an earnings season can be a great time to assess how companies are handling the current business environment and discover new stocks. Let’s have a look at how Intuit (NASDAQ:INTU) and the rest of the finance and HR software stocks fared in Q2.
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 Q2; on average, revenues beat analyst consensus estimates by 4.11%, while on average next quarter revenue guidance was 0.15% above consensus. Tech stocks have been hit the hardest as investors start to value profits over growth and while some of the finance and HR software stocks have fared somewhat better that others, they have not been spared, with share prices declining 5.58% since the previous earnings results, on average.
Intuit
Created in 1983 when founder Scott Cook watched his wife struggle to reconcile the family's checkbook, Intuit provides tax and accounting software for small and medium-sized businesses.
Intuit reported revenues of $2.71 billion, up 12.3% year on year, beating analyst expectations by 2.63%. It was a mixed quarter for the company, with a decent beat of analysts' revenue estimates but a decline in its gross margin, and revenue guidance for next year suggesting that growth will slow.
The stock is up 3.93% since the results and currently trades at $517.61.
Best Q2: Flywire
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 $84.9 million, up 50.1% year on year, beating analyst expectations by 15.5%. It was an exceptional quarter for the company, with an impressive beat of analysts' revenue estimates and full-year revenue guidance exceeding analysts' expectations.
Flywire scored the fastest revenue growth and highest full year guidance raise among its peers. The stock is down 7.24% since the results and currently trades at $29.84.
Weakest Q2: Zuora
Founded in 2007, Zuora (NYSE:ZUO) offers software as a service platform that allows companies to bill and accept payments for recurring subscription products.
Zuora reported revenues of $108 million, up 9.39% year on year, missing analyst expectations by 0.69%. It was a weak quarter for the company, with full-year revenue guidance missing analysts' expectations and underwhelming revenue guidance for the next quarter.
Zuora had the weakest performance against analyst estimates and weakest full year guidance update in the group. The stock is down 17.6% since the results and currently trades at $7.98.
Workiva
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 $155 million, up 17.8% year on year, beating analyst expectations by 1.05%. It was a mixed quarter for the company, with underwhelming revenue guidance for the next quarter. On the other hand, the net revenue retention rate improved, and customer growth accelerated.
The company added 107 enterprise customers paying more than $100,000 annually to a total of 1,470. The stock is down 4.48% since the results and currently trades at $98.06.
Bill.com
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 $296 million, up 47.8% year on year, beating analyst expectations by 4.75%. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and full year. Regardless, this was a milestone year for Bill.com as its transacted payment volume accounted for approximately 1% of U.S. GDP.
The company added 3,100 customers to a total of 201,000. The stock is up 2.93% since the results and currently trades at $104.59.