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Highlights
- The technology wave amid COVID-19 has compelled businesses to outsource HR functions for enhanced business efficiencies.
- ASX-listed HR tech companies like PYM and IHR have witnessed record financial numbers with significant growth across the business.
- PYG and IHR remain optimistic about maintaining growth momentum in the future on the back of tailwinds offered during COVID-19.
Among the many things that have gained pace during the COVID-19-led disruption, one is software development and services for the HR industry. The trend has been gaining traction on the back of the increased adoption of the remote working setup.
Cashing in on these tailwinds, HR tech companies have benefitted significantly and have been celebrating robust performance over the past couple of years.
Let us look at the way some of the ASX-listed HR tech stocks have navigated through COVID-19 and assess their future stance.
PayGroup’s record quarterly sales
PayGroup Limited (ASX:PYG) witnessed record quarterly sales during the December 2021 quarter (3QFY22) as the Company signed AU$5.6 million worth of new contracts. This indicates a 100% growth over AU$2.8 million reported during 3QFY21.
PYG believes that it has successfully executed its strategy for expansion of the franchise and retail payroll solutions internationally, leveraging PYG’s current global customer base, present infrastructure, and expertise in complex cross-border payroll.
Source: © Wrightstudio | Megapixl.com
PYG remains focused on delivering growth as well as margin expansion. The company also remains optimistic about continuing its momentum into the final quarter of FY22 on the back of the strong results seen in recent quarters.
PYG stock closed at AU$0.420 on 25 March 2022 and has a market capitalisation of AU$50.28 million. PYG stock has delivered a YTD return of 23.53%, as of 25 March 2022.
iHR’s growth track
intelliHR Limited (ASX:IHR) has delivered record Annual Recurring Revenue (ARR) growth for three consecutive quarters. This growth indicates a robust response to market demand with expanding customer size and record enterprise customer conversions steering the growth.
During the half-year, IHR recorded 117% Y-o-Y invoiced subscription revenue growth. Moreover, IHR’s contracted ARR stood at AU$6.5 million during Q3 till 17 March 2022, indicating a record Q3 growth of 162% YoY.
Source: © Wrightstudio | Megapixl.com
IHR has continued to build its best-of-breed partner ecosystem with more than 90% revenue growth involving an ecosystem element. The Company continues to actively expand its best-of-breed partnerships through the new Integration Marketplace.
IHR has also been actively engaged in product development for large-scale data management and core HR record keeping enablement projects.
IHR stock last traded at AU$0.155, up by 3.333% on 25 March 2022. IHR stock has delivered a whopping 400% return over the past two years.
Outlook amid COVID-19 scenario
PYG continues to experience an encouraging increase in payslips as the world eases back to normality with COVID-19 apparently transitioning into endemic. Due to enhanced regulatory requirements, there remains strong demand for specialised payroll services and Cloud HCM.
With the continuing increase in vaccination rates and additional easing of restrictions and travel in Australia as well as globally, PYG expects operational tailwinds for growth to return more strongly in the remaining part of the year.
Source: © BiancoBlue | Megapixl.com
Similarly, IHR has experienced spiralling growth since the onset of COVID-19 and has remained productive and engaged during the pandemic. Moreover, IHR seems to be suitably poised to support the global shift to hybrid and remote work arrangements.
Over the past year, IHR has strongly established a robust platform for international SaaS HR success. Moreover, the Company remains optimistic about building upon its accomplishments in 2022 and will continue with the development of emerging reseller technology partnerships delivering a new scalable distribution channel.
Bottom Line
Overall, we have seen how PHY and IHR have managed to ride out the COVID-19 storm and have witnessed strong growth. These stocks have remained on top during times which were tough for many companies.
