Paylocity Holding (PCTY - Free Report) recorded first-quarter fiscal 2021 non-GAAP earnings of 38 cents per share, outpacing the Zacks Consensus Estimate of 15 cents. Moreover, the bottom-line figure comes in a couple of cents higher than the year-ago quarter’s earnings of 36 cents per share.
Paylocity’s revenues of $135.8 million improved 7% year over year and also trumped the Zacks Consensus Estimate of $133.9 million. The top line was driven by an 11% rise in recurring revenues (99% of total revenues), which totaled $134.9 million. However, interest income on funds held for clients slumped 81% to $919 million.
The company is benefiting from the growing adoption of its solutions among clients with less than 50 employees. Further, healthy momentum in the firm’s core and upper end of the market is a tailwind. However, lower interest rates have been negatively impacting the company’s interest income on funds held for clients.
Quarter in Detail
The company’s non-GAAP gross profit came in at $94.2 million, up 4.3% year over year. Nonetheless, non-GAAP gross margin contracted 180 basis points (bps) year over year to 69.4%.
Adjusted EBITDA inched up 1.3% from the year-ago quarter to $30.8 million. Yet, adjusted EBITDA margin of 22.7% shrunk 140 bps.
Non-GAAP operating income marginally declined to $21.4 million from the $21.5 million reported in the year-ago quarter. Also, non-GAAP operating margin contracted 120 bps to 15.8%.
Paylocity exited the reported quarter with cash, cash equivalents and corporate investments of $240 million compared with the $285.4 million witnessed in the prior quarter. Additionally, as of Sep 30, 2020, the company had a long-term debt of $100 million.
During the fiscal first quarter, the company used $1.6 million of cash for operational activities.
Guidance
For second-quarter fiscal 2021, Paylocity expects revenues of $141-$145 million, indicating 7-10% growth from the year-ago period. Adjusted EBITDA is projected in the band of $26.5-$29.5 million.
Zacks Rank & Other Stocks to Consider
Paylocity currently carries a Zacks Rank #2 (Buy).
Other top-ranked stocks in the broader technology sector include NVIDIA Corporation (NVDA - Free Report) , Mimecast Limited and Covetrus, Inc. , all carrying a Zacks Rank #2, at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The long-term earnings growth rate for NVIDIA, Mimecast and Covetrus is currently pegged at 20.1%, 31.7%, and 31.6%, respectively.
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Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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Zacks Names "Single Best Pick to Double"
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It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
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Paylocity Holding (PCTY - Free Report) recorded first-quarter fiscal 2021 non-GAAP earnings of 38 cents per share, outpacing the Zacks Consensus Estimate of 15 cents. Moreover, the bottom-line figure comes in a couple of cents higher than the year-ago quarter’s earnings of 36 cents per share.
Paylocity’s revenues of $135.8 million improved 7% year over year and also trumped the Zacks Consensus Estimate of $133.9 million. The top line was driven by an 11% rise in recurring revenues (99% of total revenues), which totaled $134.9 million. However, interest income on funds held for clients slumped 81% to $919 million.
The company is benefiting from the growing adoption of its solutions among clients with less than 50 employees. Further, healthy momentum in the firm’s core and upper end of the market is a tailwind. However, lower interest rates have been negatively impacting the company’s interest income on funds held for clients.
Quarter in Detail
The company’s non-GAAP gross profit came in at $94.2 million, up 4.3% year over year. Nonetheless, non-GAAP gross margin contracted 180 basis points (bps) year over year to 69.4%.
Adjusted EBITDA inched up 1.3% from the year-ago quarter to $30.8 million. Yet, adjusted EBITDA margin of 22.7% shrunk 140 bps.
Non-GAAP operating income marginally declined to $21.4 million from the $21.5 million reported in the year-ago quarter. Also, non-GAAP operating margin contracted 120 bps to 15.8%.
Paylocity exited the reported quarter with cash, cash equivalents and corporate investments of $240 million compared with the $285.4 million witnessed in the prior quarter. Additionally, as of Sep 30, 2020, the company had a long-term debt of $100 million.
During the fiscal first quarter, the company used $1.6 million of cash for operational activities.
Guidance
For second-quarter fiscal 2021, Paylocity expects revenues of $141-$145 million, indicating 7-10% growth from the year-ago period. Adjusted EBITDA is projected in the band of $26.5-$29.5 million.
Zacks Rank & Other Stocks to Consider
Paylocity currently carries a Zacks Rank #2 (Buy).
Other top-ranked stocks in the broader technology sector include NVIDIA Corporation (NVDA - Free Report) , Mimecast Limited and Covetrus, Inc. , all carrying a Zacks Rank #2, at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The long-term earnings growth rate for NVIDIA, Mimecast and Covetrus is currently pegged at 20.1%, 31.7%, and 31.6%, respectively.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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