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 Marqeta (NASDAQ:MQ) 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 1.5% while next quarter’s revenue guidance was 0.5% below.
The Fed cut its policy rate by 50bps (half a percent) in September 2024, the first in roughly four years. This marks the end of its most pointed inflation-busting campaign since the 1980s. While CPI (inflation) readings have been supportive lately, employment measures have bordered on worrisome. The markets will be assessing whether this rate cut's timing (and more potential ones in 2024 and 2025) is ideal for supporting the economy or a bit too late for a macro that has already cooled too much.
Thankfully, finance and HR software stocks have been resilient with share prices up 6.2% on average since the latest earnings results.
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 print exceeded analysts’ expectations by 3.1%. Overall, it was a satisfactory quarter for the company with a decent beat of analysts’ total payment volume estimates but a decline in its gross margin.
"The second quarter demonstrates the great returns on our reinvigorated go-to-market approach combined with our ability to deliver innovation at scale. We signed a pioneering techbank, launched a new payment innovation that reimagines what a card can be, and deepened the array of services we can offer globally, all while continuing to grow our TPV and operate with focused efficiency,” said Simon Khalaf, CEO at Marqeta.
Marqeta Total Revenue
Marqeta delivered the slowest revenue growth of the whole group. Interestingly, the stock is up 3.4% since reporting and currently trades at $5.10.
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.
Zuora Total Revenue
The market seems content with the results as the stock is up 1.5% since reporting. It currently trades at $8.64.
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 $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 25.7% since the results and currently trades at $7.58.
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 print 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 delivered 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 7.3% since reporting and currently trades at $77.80.
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 $103.7 million, up 22.2% year on year. This number beat analysts’ expectations by 3.3%. Aside from that, it was a mixed quarter as it also produced full-year revenue guidance topping analysts’ expectations but a decline in its gross margin.
Flywire delivered the fastest revenue growth among its peers. The stock is down 7.9% since reporting and currently trades at $16.38.
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