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Paylocity Shares Rise on Q1 Earnings Beat & Strong FY25 View

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Paylocity Holding Corporation (PCTY - Free Report) shares gained 3.6% to close at $184.57 following impressive first-quarter fiscal 2025 results.

PCTY reported first-quarter fiscal 2025 non-GAAP earnings of $1.66 per share, beating the Zacks Consensus Estimate by 19.42%. The bottom line increased 18.6% year over year, driven by higher revenues and a rise in the operating income.

PCTY’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 18.26%.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Paylocity’s revenues rose 14.3% year over year to $363 million and surpassed the Zacks Consensus Estimate by 1.81%. 

The top-line growth can be attributed to a 14.2% increase in Recurring revenues (91.7% of the total revenues), which totaled $333 million. Moreover, the Interest Income on Funds Held for Clients (8.21% of total revenues) rose 15.4% year over year to $29.9 million.

 

Paylocity Holding Corporation Price, Consensus and EPS Surprise

 

Quarterly Details

Paylocity’s adjusted gross profit was $268.7 million, up 15.4% from the year-ago period. The adjusted gross margin expanded 66 basis points (bps) to 74.02%.

The non-GAAP operating income rose 17.2% year over year to $104.9 million. The non-GAAP operating margin expanded 153 bps to 28.9%.

Adjusted EBITDA jumped 22.97% from the year-ago quarter to $129 million. The adjusted EBITDA margin for the first quarter of fiscal 2025 expanded 251 bps to 35.5%.

Balance Sheet & Cash Flow Details

As of Sept. 30, 2024, Paylocity’s cash and cash equivalents were $778.5 million, which includes $325 million in proceeds from its credit facility compared with the previous quarter’s $401.8 million. Long-term debt totaled $325 million as of the first quarter of fiscal 2025.

Cash flow from operations for the first quarter of fiscal 2025 was $91.5 million compared with $62.1 million from the year-ago period. Free cash flow was $73.9 million for the first quarter of fiscal 2025.

PCTY Raises Q2 and Fiscal 2025 Guidance

For the second quarter of fiscal 2025, the company expects total revenues in the range of $364-$369 million, indicating 12% growth from the year-ago period. Adjusted EBITDA is projected in the range of $116-$120 million.

For fiscal 2025, Paylocity projects total revenues between $1.535 billion and $1.550 billion, implying 10% growth from the year-ago quarter. Adjusted EBITDA is expected in the range of $530-$540 million.

Zacks Rank & Other Stocks to Consider

Currently, Paylocity carries a Zacks Rank #2 (Buy).

Arista Networks (ANET - Free Report) , Autodesk (ADSK - Free Report) and Lyft (LYFT - Free Report) are some other top-ranked stocks that investors can consider in the broader Zacks Computer & Technology sector. 

Arista Networks, Autodesk and Lyft each carries a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Arista Networks’ shares have gained 64.1% year to date. ANET is set to report its third-quarter 2024 results on Nov. 7.

Autodesk shares have risen 16.6% year to date. ADSK is set to report its third-quarter fiscal 2025 results on Nov. 19.

LYFT shares have lost 13.4% year to date. LYFT is set to report its third-quarter 2024 results on Nov. 6.

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