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Paylocity (PAYC) Earnings & Revenues Top Estimates in Q3

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Paylocity (PAYC - Free Report) reported third-quarter fiscal 2022 non-GAAP earnings of $1.22 per share, outpacing the Zacks Consensus Estimate of 91 cents. The bottom line improved 38.6% from the year-ago quarter’s earnings of 88 cents per share.

Paylocity’s revenues increased 32% year over year to $246 million and surpassed the Zacks Consensus Estimate of $241.6 million. The top-line growth can be attributed to a 32% increase in recurring revenues (99.6% of total revenues), which totaled $245 million. However, interest income on funds held for clients declined 10.5% to $1 million.

Quarterly Details

Paylocity’s adjusted gross profit was $179.8 million, up 31.5% year over year. Adjusted gross margin contracted 40 basis points (bps) year over year to 73.1%.

Adjusted EBITDA increased 28% from the year-ago quarter to $85.7 million. However, adjusted EBITDA margin of 34.8% contracted 120 bps.

Paycom Software, Inc. Price, Consensus and EPS Surprise

Paycom Software, Inc. Price, Consensus and EPS Surprise

Paycom Software, Inc. price-consensus-eps-surprise-chart | Paycom Software, Inc. Quote

Non-GAAP operating income increased to $75.5 million from $57 million reported in the year-ago period. Non-GAAP operating margin expanded 10 bps to 30.7%.

Balance Sheet & Other Details

Paylocity exited the fiscal third quarter with cash and cash equivalents of $96.5 million compared with the previous quarter’s $84.1 million. As of Mar 31, 2022, the company had no long-term debt.

During the third quarter of fiscal 2022, the company generated $78.5 million of cash through operating activities. During the first nine months of fiscal 2022, Paylocity generated $105.4 million of cash through operating activities.

Outlook Update

For the fiscal fourth quarter, Paylocity expects revenues of $215.5-$219.5 million, indicating approximately 30% growth from the year-ago period. Adjusted EBITDA is projected to be $49.5-$52.5 million.

The company raised its fiscal 2022 guidance. It is now expecting revenues of $839.2-$843.2 million, suggesting approximately 32% growth from fiscal 2021, compared with the prior estimate of $829-$834 million.

Adjusted EBITDA is now expected in the band of $228-$231 million compared with the prior estimate of $220-$224 million for fiscal 2022.

Zacks Rank & Key Picks

Paylocity currently carries a Zacks Rank #3 (Hold). Shares of PAYC have climbed 10.4% in the past year.

Some better-ranked stocks from the broader Computer and Technology sector include Avnet (AVT - Free Report) , Gogo (GOGO - Free Report) and Analog Devices (ADI - Free Report) . While Avnet sports a Zacks Rank #1 (Strong Buy), Gogo and Analog Devices carry a Zacks Rank of 2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Avnet's fourth-quarter fiscal 2022 earnings has been revised 55 cents northward to $1.96 per share over the past seven days. For 2022, earnings estimates have moved up by 20.5% to $6.83 per share in the past seven days.

Avnet's earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 21.2%. Shares of AVT have increased 8.2% in the past year.

The Zacks Consensus Estimate for Gogo's first-quarter 2022 earnings has been revised downward by a penny to 13 cents per share over the past 30 days. For 2022, Gogo's earnings estimates have moved a couple of cents south to 63 cents per share in the past seven days.

Gogo's earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 65%. Shares of GOGO have soared 69.4% in the past year.

The Zacks Consensus Estimate for Analog Devices' second-quarter fiscal 2022 earnings has been revised upward by 4 cents to $2.12 per share over the past 30 days. For fiscal 2022, earnings estimates have moved north by 11 cents to $8.43 per share in the past 30 days.

Analog Devices' earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 6%. Shares of ADI have increased 1.8% in the past year.


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