As the Q2 earnings season wraps, let’s dig into this quarter’s best and worst performers in the finance and HR software industry, including Intuit (NASDAQ:INTU) and its peers.
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 15 finance and HR software stocks we track reported a slower Q2. As a group, revenues beat analysts’ consensus estimates by 1.6% while next quarter’s revenue guidance was 0.5% below.
After much suspense, the Federal Reserve cut its policy rate by 50bps (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 pointed inflation-busting campaign since the 1980s. Inflation had begun to run hot in 2021 post-COVID due to a confluence of factors such as supply chain disruptions, labor shortages, and stimulus spending. While CPI (inflation) readings have been supportive lately, employment measures have prompted some concern. Going forward, the markets will debate whether this rate cut (and more potential ones in 2024 and 2025) is perfect timing to support the economy or a bit too late for a macro that has already cooled too much.
In light of this news, finance and HR software stocks have held steady with share prices up 4.1% on average since the latest earnings results.
Intuit (NASDAQ:INTU)
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 $3.18 billion, up 17.4% year on year. This print exceeded analysts’ expectations by 3.1%. Despite the top-line beat, it was still a mixed quarter for the company with management forecasting healthy growth but a decline in its gross margin.
“We delivered very strong results for the fourth quarter and full year, and made meaningful progress with our AI-driven expert platform strategy that positions the company for durable growth in the future,” said Sasan Goodarzi, Intuit's chief executive officer.
Unsurprisingly, the stock is down 9.4% since reporting and currently trades at $603.16.
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Best Q2: Zuora (NYSE:NYSE:ZUO)
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 $115.4 million, up 6.8% year on year, outperforming analysts’ expectations by 2.5%. The business had a strong quarter with an impressive beat of analysts’ billings estimates and in-line revenue guidance for the next quarter.
However, the results were likely priced into the stock as it’s traded sideways since reporting. Shares currently sit at $8.45.
Slowest Q2: Global Business Travel (NYSE:GBTG)
Holding close ties to American Express (NYSE:AXP), Global Business Travel (NYSE:GBTG) is a comprehensive travel and expense management services provider to corporations worldwide.Global Business Travel reported revenues of $625 million, up 5.6% year on year, falling short of analysts’ expectations by 1.1%. It was a disappointing quarter as it posted full-year revenue guidance missing analysts’ expectations.
Interestingly, the stock is up 22.1% since the results and currently trades at $7.36.
Workiva (NYSE: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 $177.5 million, up 14.5% year on year. This result surpassed analysts’ expectations by 1.3%. Aside from that, it was a satisfactory quarter as it also logged accelerating customer growth but a miss of analysts’ billings estimates.
Workiva achieved the highest full-year guidance raise among its peers. The company added 72 enterprise customers paying more than $100,000 annually to reach a total of 1,768. The stock is up 7.1% since reporting and currently trades at $77.64.
Marqeta (NASDAQ:MQ)
Founded by CEO Jason Gardner in 2009, Marqeta (NASDAQ: MQ) is an innovative card issuer that provides companies with the ability to issue and process virtual, physical, and tokenized credit and debit cards.Marqeta reported revenues of $125.3 million, down 45.8% year on year. This result surpassed analysts’ expectations by 3.1%. Zooming out, it was a mixed quarter as it also logged a decent beat of analysts’ total payment volume estimates but a decline in its gross margin.
Marqeta had the slowest revenue growth among its peers. The stock is down 2.6% since reporting and currently trades at $4.80.
This content was originally published on Stock Story
