The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Paychex (NASDAQ: PAYX) and the rest of the HR software stocks fared in Q4.
Modern HR software has two powerful benefits: cost savings and ease of use. For cost savings, businesses large and small much prefer the flexibility of cloud-based, web-browser-delivered software paid for on a subscription basis rather than the hassle and complexity of purchasing and managing on-premise enterprise software. On the usability side, the consumerization of business software creates seamless experiences whereby multiple standalone processes like payroll processing and compliance are aggregated into a single, easy-to-use platform.
The 6 HR software stocks we track reported a satisfactory Q4. As a group, revenues beat analysts’ consensus estimates by 1.5% while next quarter’s revenue guidance was 4% below.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 5.9% since the latest earnings results.
Paychex (NASDAQ: PAYX)
One of the oldest service providers in the industry, Paychex (NASDAQ: PAYX) offers its customers payroll and HR software solutions.
Paychex reported revenues of $1.32 billion, up 4.7% year on year. This print was in line with analysts’ expectations, but overall, it was a mixed quarter for the company with a narrow beat of analysts’ EBITDA estimates.
President and Chief Executive Officer , John Gibson commented, "We are pleased to report strong financial results for the second quarter of fiscal 2025 with a 5% increase in total revenue. Excluding the impact of the expiration of the Employee Retention Tax Credit ("ERTC") program, revenue growth was 7% for the quarter."
Paychex delivered the slowest revenue growth of the whole group. The stock is up 6.2% since reporting and currently trades at $144.46.
Is now the time to buy Paychex? Access our full analysis of the earnings results here, it’s free.
Best Q4: Paycor (NASDAQ: PYCR)
Founded in 1990 in Cincinnati, Ohio, Paycor (NASDAQ: PYCR) provides software for small businesses to manage their payroll and HR needs in one place.
Paycor reported revenues of $180.4 million, up 13.1% year on year, outperforming analysts’ expectations by 1.9%. The business had a very strong quarter with a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ billings estimates.
The market seems content with the results as the stock is up 1.2% since reporting. It currently trades at $22.41.
Is now the time to buy Paycor? Access our full analysis of the earnings results here, it’s free.
Weakest Q4: Dayforce (NYSE: DAY)
Founded in 1992 as Ceridian, an outsourced payroll processor and transformed after the 2012 acquisition of Dayforce, Dayforce (NYSE: DAY) is a provider of cloud based payroll and HR software targeted at mid-sized businesses.
Dayforce reported revenues of $465.2 million, up 16.4% year on year, exceeding analysts’ expectations by 2%. Still, it was a slower quarter as it posted full-year guidance of slowing revenue growth and revenue guidance for next quarter missing analysts’ expectations.
Dayforce delivered the weakest full-year guidance update in the group. As expected, the stock is down 25.4% since the results and currently trades at $53.53.
Read our full analysis of Dayforce’s results here.
Paycom (NYSE: PAYC)
Founded in 1998 as one of the first online payroll companies, Paycom (NYSE: PAYC) provides software for small and medium-sized businesses (SMBs) to manage their payroll and HR needs in one place.
Paycom reported revenues of $493.8 million, up 13.6% year on year. This print surpassed analysts’ expectations by 2.6%. Overall, it was a strong quarter as it also logged a solid beat of analysts’ EBITDA estimates.
The stock is flat since reporting and currently trades at $206.19.
Read our full, actionable report on Paycom here, it’s free.
Asure (NASDAQ: ASUR)
Created from the merger of two small workforce management companies in 2007, Asure (NASDAQ: ASUR) provides cloud based payroll and HR software for small and medium-sized businesses (SMBs).
Asure reported revenues of $30.79 million, up 17.2% year on year. This number was in line with analysts’ expectations. Zooming out, it was a slower quarter as it produced EBITDA guidance for next quarter missing analysts’ expectations.
Asure pulled off the fastest revenue growth but had the weakest performance against analyst estimates among its peers. The stock is down 4.4% since reporting and currently trades at $9.26.
Read our full, actionable report on Asure here, it’s free.
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