Earnings results often indicate what direction a company will take in the months ahead. With Q2 behind us, let’s have a look at Dayforce (NYSE: DAY) and its peers.

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 5 HR software stocks we track reported a slower Q2. As a group, revenues beat analysts’ consensus estimates by 0.5% while next quarter’s revenue guidance was 2.7% below.

In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.

Dayforce (NYSE: DAY)

Rebranded from Ceridian in January 2024 to highlight its flagship product, Dayforce (NYSE: DAY) provides cloud-based software that helps organizations manage their entire employee lifecycle, including HR, payroll, workforce management, benefits, and talent development.

Dayforce reported revenues of $464.7 million, up 9.8% year on year. This print exceeded analysts’ expectations by 1.5%. Despite the top-line beat, it was still a slower quarter for the company with revenue guidance for next quarter missing analysts’ expectations significantly.

“Dayforce’s momentum remained strong through the second quarter, with year-to-date bookings growing over 40% year-over-year,” said David Ossip, Chair and CEO of Dayforce.

Dayforce delivered the weakest full-year guidance update of the whole group. Interestingly, the stock is up 31.1% since reporting and currently trades at $69.55.

Read our full report on Dayforce here, it’s free.

Best Q2: Paycom (NYSE: PAYC)

Pioneering the concept of employees doing their own payroll with its "Beti" technology, Paycom (NYSE: PAYC) provides cloud-based human capital management software that helps businesses manage the entire employment lifecycle from recruitment to retirement.

Paycom reported revenues of $483.6 million, up 10.5% year on year, outperforming analysts’ expectations by 2.5%. The business had a very strong quarter with a solid beat of analysts’ EBITDA estimates and full-year EBITDA guidance exceeding analysts’ expectations.

However, the results were likely priced into the stock as it’s traded sideways since reporting. Shares currently sit at $224.50.

Is now the time to buy Paycom? Access our full analysis of the earnings results here, it’s free.

Weakest Q2: Paychex (NASDAQ: PAYX)

Once known as the go-to service for small business payroll needs, Paychex (NASDAQ: PAYX) provides payroll processing, HR services, employee benefits administration, and insurance solutions to small and medium-sized businesses.

Paychex reported revenues of $1.43 billion, up 10.2% year on year, falling short of analysts’ expectations by 1.1%. It was a disappointing quarter as it posted a miss of analysts’ EBITDA estimates.

As expected, the stock is down 9.8% since the results and currently trades at $137.29.

Read our full analysis of Paychex’s results here.

Asure Software (NASDAQ: ASUR)

Operating in the often-overlooked smaller metropolitan markets where HR expertise can be scarce, Asure Software (NASDAQ: ASUR) provides cloud-based human capital management software and services that help small and medium-sized businesses manage payroll, taxes, time tracking, and HR compliance.

Asure Software reported revenues of $30.12 million, up 7.4% year on year. This number lagged analysts' expectations by 3.2%. Overall, it was a softer quarter as it also produced EBITDA guidance for next quarter missing analysts’ expectations significantly and a significant miss of analysts’ billings estimates.

Asure Software pulled off the highest full-year guidance raise but had the weakest performance against analyst estimates and weakest performance against analyst estimates among its peers. The stock is down 16.9% since reporting and currently trades at $8.07.

Read our full, actionable report on Asure Software here, it’s free.

Paylocity (NASDAQ: PCTY)

Operating in a field where companies traditionally juggled multiple disconnected systems, Paylocity (NASDAQ: PCTY) provides cloud-based human capital management and payroll software solutions that help businesses manage their workforce and HR processes.

Paylocity reported revenues of $400.7 million, up 12.2% year on year. This result surpassed analysts’ expectations by 3.1%. Aside from that, it was a satisfactory quarter as it also logged an impressive beat of analysts’ EBITDA estimates but full-year guidance of slowing revenue growth.

Paylocity achieved the biggest analyst estimates beat and fastest revenue growth among its peers. The stock is down 3.3% since reporting and currently trades at $175.55.

Read our full, actionable report on Paylocity 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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