The second quarter of 2022 earnings season is largely in the books, as we prepare the enter the final month of the third quarter. According to StreetInsider, the Q2 2022 earnings season has seen a 60% beat rate, as 2,402 companies outperformed their estimates and 1,633 underperformed, as of August 23, 2022. Considering the economic environment and its recessionary and inflationary worries, Q2 2022 earnings were not as bad as some experts had guessed.
However, as the Fed continues its tightening cycle to tackle inflation, leading to increasing worries about tipping the economy into a recession, investors must sift through the markets to find companies with strong relative strength.
Technology is one area of the market that has been overall hit hard by the current economic conditions. However, even in technology, there continue to be pockets of relative strength that are being overlooked by investors. Here are three technology stocks that reported stronger-than-anticipated second quarter 2022 earnings and remain upbeat on upcoming guidance:
Asure Software (NASDAQ: ASUR)
Asure Software is a provider of cloud-based human capital management solutions across the United States. The company’s services and solutions are geared to help small and medium-sized businesses with building and managing a workforce with everything from payroll & taxes to compliance, time & attendance, and other human resources functions.
Despite overall economic uncertainties, Asure reported strong Q2 2022 financial results, which saw meaningful revenue growth, strengthened balance sheet, reaffirmed guidance for the rest of 2022, and more. During the quarter, Asure reported an 18% year-over-year increase in revenue to $20.3 million. Non-GAAP EBITDA came in at $1.3 million, which was an impressive 23% growth y/y. The company increased its cash and equivalents position to $14.6 million, giving Asure the ability to continue its operational goals and progress.
“Our second quarter performance showed strong current sales momentum which gives me confidence that our solutions are resonating with clients, said Chairman and CEO, Pat Goepel. “We have continued to invest in our sales force, introduced innovative solutions, and have improved the experience of our existing offerings. These efforts produced an 87% increase in new sales bookings in the quarter and shows our strategy is on the right track.”
For Q3, Q4, and full-year 2022, Asure’s management reiterated its revenue, non-GAAP EBITDA, and non-GAAP EPS guidance, which takes into account the current state of the economy. For the full-year 2022, Asure Software estimates revenue between $88 million and $90 million. The non-GAAP EBITDA range for the full year comes between $8.5 million and $10 million. Non-GAAP EPS is estimated to come between $(0.05) and $0.02 per share.
Outside of its Q2 financial results, Asure Software has been busy with the release of its new Tax Portal and integration of its FlexTax payroll tax filing engine with PrismHR’s payroll system. Asure CEO Pat Goepel recently filed two SEC Form 4s showing the executive purchased shares of ASUR on the open market on August 12th and August 15th. Mr. Goepel purchased a total of 100,000 shares at an average price of around $5.77 per share, giving the total purchase value of over $577,320.
Atlassian Corporation (NASDAQ: TEAM)
Atlassian is an Australia-based software company, which is focused on developing workflow management systems, enterprise planning, team collaboration & communication, and more. During the company’s fiscal fourth quarter for the period ended June 30, 2022, Atlassian reported revenues of $759.84 million on a net loss of $105.5 million. Revenues were up 36% year-over-year and net losses improved from $213.1 million for the fiscal Q4 2021.
For its fiscal year 2022, Atlassian reported total revenue of $2.8 billion, which is up 34% from fiscal 2021. Net losses for the year came in at $614.1 million, compared to a net loss of $696.3 million for last year.
Looking forward to its fiscal 2023, Atlassian sees continued growth in the year ahead. Total revenue is estimated to be in the range of $795 million to $810 million. Net losses per diluted share are estimated to come between $1.17 and $1.16 per share.
According to Zacks Research, the company has beaten its consensus estimates for earnings per share now for four straight quarters.
“Management continues to expect 50% growth in Cloud in fiscal 2023 and 2024, which we think was in line with buyside expectations,” said Cowen analyst Derrick Wood in a report. “It also continues to expect mid-teens operating margins for 2023. It was impressive to see TEAM face minimal macro pressures considering its high small- and medium-sized business exposure, which we think speaks to the health of the developer market.”
MeridianLink, Inc. (NYSE: MLNK)
MeridianLink is engaged as a software solutions and services provider to banks, credit unions, mortgage lenders, other lenders, and more. The company’s solutions allow financial institutions to offer consumer lending, account opening, loan origination decisions, automated lending, debt collection, and more. MeridianLink offers different software programs for the different functions that are standard in the consumer lending industry.
The company reported its second quarter 2022 financial results in early August. Revenues grew 7% year-over-year to $73 million, with an adjusted EBITDA of $28.2 million. Under the highlights for the second quarter for the company was the migration of its MeridianLink Mortgage lending module to the cloud. The company’s home equity lending software solutions were selected by a top-15 national mortgage lending company to use in their lending offerings.
As a result of the strong Q2 2022 financial results, management issued positive guidance for its third quarter and full-year 2022 financial results. For Q3, MeridianLink estimates revenue to come between $73 million and $75 million, with an adjusted EBITDA range of $25 million to $27 million. For full-year 2022, revenue results are estimated between $289 million and $293 million, with an adjusted EBITDA range of $112 million to $116 million.
“We saw a strong second quarter of 2022, once again exceeding market expectations, with GAAP revenue up 7% year-over-year to $73.0 million, lending software solutions revenue up 14% year-over-year to $51.7 million and 39% adjusted EBITDA margins,” said Nicolaas Vlok, chief executive officer of MeridianLink. “I remain confident in the ability of our business to continue delivering growth with strong profitability.”
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