Stocks in the news
Paylocity, a cloud-based human capital management and payroll software provider, exceeded earnings and revenue expectations in the third quarter of 2023. However, the company's rich valuation and slowing growth rates have caused its stock to sell off sharply. The recurring and other revenue growth rate, a crucial demand metric for Paylocity, has decreased consistently since the fourth quarter of 2022. Even Paylocity's guidance for the fourth quarter of 2023 did not meet market expectations. The company's investments in artificial intelligence technology, however, could be a growth catalyst in the future.
Expedia Group recorded record lodging levels in the first quarter of 2023, as travel demand remained robust despite economic hurdles. Despite missing double-digit earnings, the company experienced an acceleration in gross bookings in the quarter. Expedia Group also took advantage of the rising popularity of AI by integrating ChatGPT into its iOS application. Rival Booking Holdings' Q1 numbers were better than Expedia Group's, but its high valuation and outperformance in the market made it more susceptible to profit-taking. International demand contributed significantly to Expedia Group's revenue growth, with hotel demand increasing due to the reopening of international cities. Additionally, the company's B2B business experienced significant growth in Q1 2023.
Lyft's earnings report for Q1 2023 showed adjusted EBITDA of $22.7 million, exceeding its $5-$15 million guidance range. However, its guidance for Q2 revenue and adjusted EBITDA fell short of estimates, and concerns are arising about its strategy to cut rideshare prices to be more competitive with Uber. The acceleration in growth has led to some much-needed share gains against Uber, but the cost of this strategy is denting margins. The company's restructuring plan to eliminate more than 1,000 positions will result in $330 million in annual savings, but these savings will not flow through to adjusted EBITDA because it intends to invest the cost savings in service improvements.
Apple's Q2 results exceeded expectations with a nice EPS beat and upside revenue, particularly driven by the iPhone, which reported a record $51.33 billion revenue. Despite macro and FX challenges, Apple also announced a $90 billion share repurchase program and a 4% dividend hike. The disappointing performance of the quarter came from Mac sales, which fell 31% year-over-year. The company also conceded that Mac faced macroeconomic and FX headwinds, similarly to the iPad, which reported a 13% year-over-year revenue fall. However, Apple had a solid quarter in emerging markets, setting records in several countries. The company also announced that the AR/VR headset launch at the WWDC in June would be an exciting product category for Apple.
The DoorDash Q1 report revealed that the food and grocery delivery company's solid numbers were bolstered by robust demand within its U.S. grocery and convenience categories alongside its acquisition of Finnish food delivery company Wolt, which closed last year. However, shares pulled back due to general economic concerns across the company's major markets, and the risk of profit-taking. Despite these issues, DoorDash grew its top line by 39.8% year-over-year to $2.04 billion, and the company anticipates adjusted EBITDA to possibly more than double year-over-year in FY23, projecting $600-900 million compared to $361 million generated last year.