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Why Is Paylocity (PCTY) Up 13.7% Since Last Earnings Report?
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It has been about a month since the last earnings report for Paylocity (PCTY - Free Report) . Shares have added about 13.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Paylocity due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Paylocity Holding Corporation 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%.
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.
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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -7.26% due to these changes.
VGM Scores
Currently, Paylocity has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions has been net zero. Notably, Paylocity has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Paylocity is part of the Zacks Internet - Software industry. Over the past month, Paypal (PYPL - Free Report) , a stock from the same industry, has gained 9.2%. The company reported its results for the quarter ended September 2024 more than a month ago.
Paypal reported revenues of $7.85 billion in the last reported quarter, representing a year-over-year change of +5.8%. EPS of $1.20 for the same period compares with $1.30 a year ago.
Paypal is expected to post earnings of $1.10 per share for the current quarter, representing a year-over-year change of -25.7%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.5%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Paypal. Also, the stock has a VGM Score of C.
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Why Is Paylocity (PCTY) Up 13.7% Since Last Earnings Report?
It has been about a month since the last earnings report for Paylocity (PCTY - Free Report) . Shares have added about 13.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Paylocity due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Paylocity Shares Rise on Q1 Earnings Beat & Strong FY25 View
Paylocity Holding Corporation 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%.
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.
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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -7.26% due to these changes.
VGM Scores
Currently, Paylocity has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions has been net zero. Notably, Paylocity has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Paylocity is part of the Zacks Internet - Software industry. Over the past month, Paypal (PYPL - Free Report) , a stock from the same industry, has gained 9.2%. The company reported its results for the quarter ended September 2024 more than a month ago.
Paypal reported revenues of $7.85 billion in the last reported quarter, representing a year-over-year change of +5.8%. EPS of $1.20 for the same period compares with $1.30 a year ago.
Paypal is expected to post earnings of $1.10 per share for the current quarter, representing a year-over-year change of -25.7%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.5%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Paypal. Also, the stock has a VGM Score of C.