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Paylocity Holding Corporation

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Paylocity reported mixed Q1 results, wherein revenues exceeded expectation but earnings missed the same. However, both the top- and bottom-line results showed year-over-year improvement. The company is benefiting from client wins and a rise in ARPU from clients adopting new products. For the last few quarters, clients moving from traditional payroll service providers to the company’s SaaS based services contributed significantly to its revenues. Shares have outperformed the industry in the year-to-date period. However, SaaS network infrastructure, which Paylocity mainly operates on, is prone to cyber threats and security breaches. Also, competition in the payroll processing sector from new entrants as well as existing players remains a concern.

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