Back to top

Image: Bigstock

Paylocity (PCTY) Earnings & Revenues Beat Estimates in Q4

Read MoreHide Full Article

Paylocity (PCTY - Free Report) reported fourth-quarter fiscal 2022 non-GAAP earnings of 80 cents per share, outpacing the Zacks Consensus Estimate of 52 cents. The bottom line improved 73.9% from the year-ago quarter’s earnings of 46 cents per share.

Paylocity’s revenues increased 37% year over year to $228.9 million and surpassed the Zacks Consensus Estimate of $217.7 million. The top-line growth can be attributed to a 36% increase in recurring revenues (99% of total revenues), which totaled $226.9 million. Moreover, the interest income on funds held for clients increased to $2.1 million from $0.9 million in the year-ago quarter.

Quarterly Details

Paylocity’s adjusted gross profit was $163 million, up 40% year over year. The adjusted gross margin expanded 160 basis points (bps) year over year to 71.1%.

Adjusted EBITDA increased 59.3% from the year-ago quarter to $59.3 million. The adjusted EBITDA margin of 25.9% expanded 370 bps.

The non-GAAP operating income increased to $48.4 million from the $27.4 million reported in the year-ago period. The non-GAAP operating margin expanded 480 bps to 21.1%.

Balance Sheet & Other Details

Paylocity exited the fiscal fourth quarter with cash and cash equivalents of $139.8 million compared with the previous quarter’s $96.5 million. As of Jun 30, 2022, the company had long-term debt (long-term operating lease liabilities plus other long-term liabilities) of $72.8 million.

In the fourth quarter of fiscal 2022, the company generated $78.5 million of cash through operating activities. During fiscal 2022, Paylocity generated $155.1 million of cash through operating activities.

Outlook Update

For the first quarter of fiscal 2023, Paylocity expects revenues in the band of $237.3-$241.3 million, indicating approximately 32% growth from the year-ago period. Adjusted EBITDA is projected in the band $55-$58 million.

For fiscal 2023, it is expecting revenues in the range of $1.087-$1.092 billion, suggesting approximately 28% growth from fiscal 2022.

Adjusted EBITDA is expected in the band of $314.5-$318.5 million.

Zacks Rank & Key Picks

Paylocity currently carries a Zacks Rank #4 (Sell). Shares of PCTY have declined 4.1% year to date (“YTD”).

Some better-ranked stocks worth considering from the broader technology sector are Cadence Design Systems (CDNS - Free Report) , Manhattan Associates (MANH - Free Report) and 8x8, Inc. (EGHT - Free Report) . Cadence Design Systems and Manhattan Associates each sport a Zacks Rank #1 (Strong Buy), while 8x8 carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Cadence Design Systems' third-quarter 2022 earnings has been revised upward by nine cents to 97 cents per share over the past 30 days. For 2022, earnings estimates have moved north by 5.7% to $4.11 per share in the past 30 days.

Cadence Design Systems' earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 9.8%. Shares of CDNS have decreased 2.3% YTD.

The Zacks Consensus Estimate for Manhattan Associates' third-quarter 2022 earnings has been revised upward by a penny to 57 cents per share in the past 30 days. For 2022, earnings estimates have moved south by 18 cents to $2.38 per share in the past 30 days.

Manhattan Associates' earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 30.3%. Shares of MANH have plunged 6.7% YTD.

The Zacks Consensus Estimate for 8x8's second-quarter fiscal 2023 earnings has been revised upward by a penny to four cents per share over the past seven days. For fiscal 2023, the Zacks Consensus Estimate for 8x8's earnings has moved north by 13 cents to 26 cents per share in the past seven days.

8x8's earnings beat the Zacks Consensus Estimate thrice in the preceding four quarters while matching the same in one, the average surprise being 175%. Shares of EGHT have plunged 66.5% YTD.