Paylocity Holding Corporation (PCTY - Free Report) reported third-quarter fiscal 2024 non-GAAP earnings of $2.21 per share, beating the Zacks Consensus Estimate by 13.92%. The bottom line improved 27% year over year, driven by higher revenues and an increase in the operating and EBITDA margins.
Paylocity’s revenues climbed 18% year over year to $401.3 million and surpassed the Zacks Consensus Estimate by 1.1%. The robust increase in the top line was mainly driven by a continued focus on scaling operational costs while maintaining industry-leading service levels.
The top-line growth can be attributed to a 17% increase in Recurring revenues (91.4% of the total revenues), which totaled $366.8 million. Moreover, the Interest Income on Funds Held for Clients (8.6% of total revenues) jumped 34% year over year to $34.4 million.
Quarterly Details
Paylocity’s adjusted gross profit was $304.65 million, up 17.9% year over year. The adjusted gross margin remained unchanged year over year at 75.9%.
The non-GAAP operating income rose 25% year over year to $145.9 million. The non-GAAP operating margin expanded 200 basis points (bps) to 36.3%.
Adjusted EBITDA jumped 28.5% from the year-ago quarter to $167.9 million. The adjusted EBITDA margin of 41.8% expanded 340 bps.
Balance Sheet & Other Details
Paylocity exited the fiscal third quarter with cash and cash equivalents of $492.7 million compared with the previous quarter’s $366.9 million. As of Mar 31, 2024, the company had no long-term debt and it had not drawn on its credit facility.
During the reported quarter, PCTY generated an operating cash flow of $304.7 million and a free cash flow of $248.5 million.
Fourth-Quarter and Fiscal 2024 Guidance
For the fourth quarter of fiscal 2024, the company expects revenues in the band of $347.8-$351.8 million, indicating approximately 13% growth from the year-ago period. Adjusted EBITDA is projected in the range of $104.1-$107.1 million.
For fiscal 2024, Paylocity projects revenues between $1.393 billion and $1.397 billion, suggesting approximately 19% growth from the year-ago quarter. Adjusted EBITDA is expected in the band of $489.5-$492.5 million.
Zacks Rank & Stocks to Consider
Currently, Paylocity carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader Computer and Technology sector are Arista Networks (ANET - Free Report) , NVIDIA (NVDA - Free Report) and Dell Technologies (DELL - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of Arista Networks have risen 11.6% year to date. ANET is set to report first-quarter 2024 results on May 7.
Shares of NVIDIA have surged 74.5% year to date. NVDA is slated to report first-quarter 2024 results on May 22.
Shares of Dell Technologies have rallied 62.1% year to date. DELL is set to report first-quarter fiscal 2025 results on May 30.
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Paylocity Holding Corporation (PCTY - Free Report) reported third-quarter fiscal 2024 non-GAAP earnings of $2.21 per share, beating the Zacks Consensus Estimate by 13.92%. The bottom line improved 27% year over year, driven by higher revenues and an increase in the operating and EBITDA margins.
Paylocity’s revenues climbed 18% year over year to $401.3 million and surpassed the Zacks Consensus Estimate by 1.1%. The robust increase in the top line was mainly driven by a continued focus on scaling operational costs while maintaining industry-leading service levels.
The top-line growth can be attributed to a 17% increase in Recurring revenues (91.4% of the total revenues), which totaled $366.8 million. Moreover, the Interest Income on Funds Held for Clients (8.6% of total revenues) jumped 34% year over year to $34.4 million.
Quarterly Details
Paylocity’s adjusted gross profit was $304.65 million, up 17.9% year over year. The adjusted gross margin remained unchanged year over year at 75.9%.
The non-GAAP operating income rose 25% year over year to $145.9 million. The non-GAAP operating margin expanded 200 basis points (bps) to 36.3%.
Adjusted EBITDA jumped 28.5% from the year-ago quarter to $167.9 million. The adjusted EBITDA margin of 41.8% expanded 340 bps.
Balance Sheet & Other Details
Paylocity exited the fiscal third quarter with cash and cash equivalents of $492.7 million compared with the previous quarter’s $366.9 million. As of Mar 31, 2024, the company had no long-term debt and it had not drawn on its credit facility.
During the reported quarter, PCTY generated an operating cash flow of $304.7 million and a free cash flow of $248.5 million.
Fourth-Quarter and Fiscal 2024 Guidance
For the fourth quarter of fiscal 2024, the company expects revenues in the band of $347.8-$351.8 million, indicating approximately 13% growth from the year-ago period. Adjusted EBITDA is projected in the range of $104.1-$107.1 million.
For fiscal 2024, Paylocity projects revenues between $1.393 billion and $1.397 billion, suggesting approximately 19% growth from the year-ago quarter. Adjusted EBITDA is expected in the band of $489.5-$492.5 million.
Zacks Rank & Stocks to Consider
Currently, Paylocity carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader Computer and Technology sector are Arista Networks (ANET - Free Report) , NVIDIA (NVDA - Free Report) and Dell Technologies (DELL - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of Arista Networks have risen 11.6% year to date. ANET is set to report first-quarter 2024 results on May 7.
Shares of NVIDIA have surged 74.5% year to date. NVDA is slated to report first-quarter 2024 results on May 22.
Shares of Dell Technologies have rallied 62.1% year to date. DELL is set to report first-quarter fiscal 2025 results on May 30.
Highest Returns for Any Asset Class
It’s not even close. Despite ups and downs, Bitcoin has been more profitable for investors than any other decentralized, borderless form of money.
No guarantees for the future, but in the past three presidential election years, Bitcoin’s returns were as follows: 2012 +272.4%, 2016 +161.1%, and 2020 +302.8%. Zacks predicts another significant surge in months to come.
Hurry, Download Special Report – It’s FREE >>
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