Paylocity Holding Corporation (Nasdaq: PCTY), a leading provider of
cloud-based HCM and payroll software solutions, today announced
financial results for the second quarter of fiscal year 2024, which
ended December 31, 2023.
“Our differentiated value proposition of providing the most
modern software in the industry continues to resonate in the
marketplace as we saw total revenue growth of 20% and recurring
revenue growth of 16% in Q2 of fiscal 24. We continue to receive
positive client feedback on our modern product suite, including
newer products such as Advanced Scheduling, Learning Management,
Rewards & Recognition, and Employee Voice. We also extended our
AI leadership in the HCM industry with the launch of AI-driven
personalized learning plans, optimized workforce schedules, and
embedded generative AI within Rewards & Recognition and
Performance Management to improve communication between employees
and their managers. Paylocity’s commitment to product innovation
was also recently recognized with the Bronze Brandon Hall Group
Excellence in Technology Award in the Best Advance in Employee
Engagement Technology category, and we were named an overall leader
in 10 HCM product categories in G2’s Winter 2023 Grid Reports,
marking the 21st consecutive quarter in which Paylocity achieved
leader ranking,” said Steve Beauchamp, Co-Chief Executive Officer
of Paylocity.
Second Quarter Fiscal 2024 Financial
Highlights
Revenue:
- Total revenue was $326.4 million, an
increase of 20% from the second quarter of fiscal year 2023.
- Recurring & other revenue was
$298.4 million, an increase of 16% from the second quarter of
fiscal year 2023.
Operating Income:
- GAAP operating income was $49.7
million and non-GAAP operating income was $92.8 million in the
second quarter of fiscal year 2024.
Net Income:
- GAAP net income was $38.1 million or
$0.67 per share in the second quarter of fiscal year 2024 based on
56.9 million diluted weighted average common shares
outstanding.
Adjusted EBITDA:
- Adjusted EBITDA, a non-GAAP measure,
was $112.6 million in the second quarter of fiscal year 2024.
Balance Sheet and Cash Flow:
- Cash and cash equivalents totaled
$366.9 million as of the second quarter of fiscal year
2024.
- Cash flow from operations for the
first six months of fiscal year 2024 was $137.2 million compared to
$78.8 million for the first six months of fiscal year
2023.
- As of December 31, 2023,
Paylocity had no long-term debt and had not drawn on its credit
facility.
A reconciliation of GAAP to non-GAAP financial measures has been
provided in this press release, including the accompanying tables.
An explanation of these measures is also included below under the
heading “Non-GAAP Financial Measures.”
Business Outlook
Based on information available as of February 8, 2024,
Paylocity is issuing guidance for the third quarter and full fiscal
year 2024 as indicated below.
Third Quarter
2024:
- Total revenue is expected to be in the
range of $395.0 million to $399.0 million, which represents
approximately 17% growth over fiscal year 2023 third quarter total
revenue.
- Adjusted EBITDA, a non-GAAP measure,
is expected to be in the range of $153.5 million to $156.5
million.
Fiscal Year
2024:
- Total revenue is expected to be in the
range of $1.384 billion to $1.389 billion, which represents
approximately 18% growth over fiscal year 2023 total revenue.
- Adjusted EBITDA, a non-GAAP measure,
is expected to be in the range of $474.0 million to $478.0
million.
We are unable to reconcile forward-looking non-GAAP Adjusted
EBITDA to its directly comparable GAAP financial measure because
the information which is needed to complete a reconciliation is
unavailable at this time without unreasonable effort.
Conference Call DetailsPaylocity will host a
conference call to discuss its second quarter fiscal year 2024
results at 4:30 p.m. Central Time today (5:30 p.m. Eastern Time). A
live audio webcast of the conference call along with detailed
financial information can be accessed through
https://investors.paylocity.com/events-and-presentations where dial
in details are provided. A replay of the call will be available and
archived via webcast at https://investors.paylocity.com/.
About Paylocity
Paylocity is a leading provider of cloud-based HCM and payroll
software solutions headquartered in Schaumburg, IL. Founded in 1997
and publicly traded since 2014, Paylocity offers an intuitive,
easy-to-use product suite that helps businesses tackle today’s
challenges while moving them toward the promise of tomorrow. Known
for its unique culture and consistently recognized as one of the
best places to work, Paylocity accompanies its clients on the
journey to create great workplaces and help people achieve their
best through automation, data-driven insights, and engagement. For
more information, visit www.paylocity.com.
Non-GAAP Financial Measures
The company uses certain non-GAAP financial measures when
reporting its financial results, including Adjusted EBITDA,
Adjusted EBITDA margin, adjusted gross profit, adjusted gross
profit margin, non-GAAP operating income, non-GAAP net income,
non-GAAP net income per share, non-GAAP sales and marketing and
non-GAAP sales and marketing margin, non-GAAP total research and
development and non-GAAP total research and development margin,
non-GAAP general and administrative and non-GAAP general and
administrative margin, free cash flow and free cash flow margin,
certain of which are included in this release. Generally, a
non-GAAP financial measure is a numerical measure of a company’s
performance, financial position or cash flow that either excludes
or includes amounts that are not normally excluded or included in
the most directly comparable measure calculated and presented in
accordance with GAAP. We define Adjusted EBITDA as net income
(loss) before interest expense, income tax expense (benefit), and
depreciation and amortization expense, adjusted to eliminate
stock-based compensation expense and employer payroll taxes related
to stock releases and option exercises and other items as described
later in this release. We calculate Adjusted EBITDA margin as
adjusted EBITDA as described in the preceding sentence divided by
total revenues. Adjusted gross profit is adjusted to eliminate
stock-based compensation expense and employer payroll taxes related
to stock releases and option exercises and amortization of
capitalized internal-use software costs and certain acquired
intangibles. Adjusted gross profit margin is calculated as adjusted
gross profit as described in the preceding sentence divided by
total revenues. Non-GAAP operating income is adjusted to eliminate
stock-based compensation expense and employer payroll taxes related
to stock releases and option exercises, the amortization of
acquired intangibles and other items as described later in this
release. Non-GAAP sales and marketing expense is adjusted to
eliminate stock-based compensation expense and employer payroll
taxes related to stock releases and option exercises and other
items as described later in this release. Non-GAAP sales and
marketing margin is calculated by dividing non-GAAP sales and
marketing by total revenues. Non-GAAP general and administrative
expense is adjusted to eliminate stock-based compensation expense
and employer payroll taxes related to stock releases and option
exercises, the amortization of certain acquired intangibles and
other items as described later in this release. Non-GAAP general
and administrative margin is calculated by dividing non-GAAP
general and administrative margin by total revenues. Non-GAAP net
income and non-GAAP net income per share are adjusted to eliminate
stock-based compensation expense and employer payroll taxes related
to stock releases and option exercises, the amortization of
acquired intangibles and other items as described later in this
release, including the income tax effect on these items. Non-GAAP
total research and development is adjusted for capitalized
internal-use software costs paid and to eliminate stock-based
compensation expense and employer payroll taxes related to stock
releases and option exercises and other items as described later in
this release. Non-GAAP total research and development margin is
calculated by dividing non-GAAP total research and development by
total revenues. Free cash flow is defined as net cash provided by
operating activities less capitalized internal-use software costs,
purchase of property and equipment and lease allowances used for
tenant improvements. Free cash flow margin is calculated by
dividing free cash flow as defined in the preceding sentence
divided by total revenues. Please note that other companies may
define their non-GAAP financial measures differently than we do.
Management presents certain non-GAAP financial measures in this
release because it considers them to be important supplemental
measures of performance. Management uses these non-GAAP financial
measures for planning purposes, including analysis of the company's
performance against prior periods, the preparation of operating
budgets and to determine appropriate levels of operating and
capital investments. Management believes that these non-GAAP
financial measures provide additional insight for analysts and
investors in evaluating the company's financial and operational
performance. Management also intends to provide these non-GAAP
financial measures as part of the company’s future earnings
discussions and, therefore, the inclusion of the non-GAAP financial
measures should provide consistency in the company’s financial
reporting. Non-GAAP financial measures have limitations as an
analytical tool. Investors are encouraged to review the
reconciliation of the non-GAAP measures to their most directly
comparable GAAP measures provided in this release.
Safe Harbor/Forward Looking
StatementsThis press release contains
forward-looking statements that involve substantial risks and
uncertainties. All statements, other than statements of historical
facts, included herein regarding Paylocity’s future operations,
ability to scale its business, future financial position and
performance, future revenues, projected costs, prospects, plans and
objectives of management are forward-looking statements. The words
“anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,”
“plan,” “will,” “would,” “seek” and similar expressions (or the
negative of these terms) are intended to identify forward-looking
statements, although not all forward-looking statements contain
these identifying words. These forward-looking statements include,
among other things, statements about management's estimates
regarding future revenues and financial performance, long-term
financial targets and other statements about management’s beliefs,
intentions or goals. Paylocity may not actually achieve the
expectations disclosed in the forward-looking statements, and you
should not place undue reliance on Paylocity’s forward-looking
statements. These forward-looking statements involve risks and
uncertainties that could cause actual results or events to differ
materially from the expectations disclosed in the forward-looking
statements, including, but not limited to the general economic
conditions in regions in which Paylocity does business, changes in
interest rates, business disruptions, reductions in employment and
an increase in business failures that have occurred or may occur in
the future; Paylocity’s ability to leverage AI Assist and other
forms of artificial intelligence and machine learning in its
technology, which may be constrained by current and future laws,
regulations, interpretive positions or standards governing new and
evolving technologies and ethical considerations that could
restrict or impose burdensome and costly requirements on its
ability to continue to leverage data in innovative ways;
Paylocity’s ability to retain existing clients and to attract new
clients to enter into subscriptions for its services; the
challenges associated with a growing company’s ability to
effectively service clients in a dynamic and competitive market;
challenges associated with expanding and evolving a sales
organization to effectively address new geographies and products
and services; challenges related to cybersecurity threats and
evolving cybersecurity regulations; Paylocity’s reliance on and
ability to expand its referral network of third parties;
Paylocity’s reliance on third party payroll partners in foreign
jurisdictions in its Blue Marble business; difficulties associated
with accurately forecasting revenue and appropriately planning
expenses; challenges with managing growth effectively; risks
related to regulatory, legislative and judicial uncertainty in
Paylocity’s markets; Paylocity’s ability to protect and defend its
intellectual property; the risk that Paylocity’s security measures
are compromised or a threat actor gains unauthorized access to
customer data; unexpected events in the market for Paylocity’s
solutions; changes in the competitive environment in Paylocity’s
industry and the markets in which it operates; adverse changes in
general economic or market conditions; changes in the employment
rates of Paylocity’s clients and the resultant impact on revenue;
the possibility that Paylocity may be adversely affected by other
economic, business, and/or competitive factors; and other risks and
potential factors that could affect Paylocity’s business and
financial results identified in Paylocity’s filings with the
Securities and Exchange Commission (the “SEC”), including its 10-K
filed with the SEC on August 4, 2023. Additional information will
also be set forth in Paylocity’s future quarterly reports on Form
10-Q, annual reports on Form 10-K and other filings that Paylocity
makes with the SEC. These forward-looking statements represent
Paylocity’s expectations as of the date of this press release.
Subsequent events may cause these expectations to change, and
Paylocity disclaims any obligations to update or alter these
forward-looking statements in the future, whether as a result of
new information, future events or otherwise.
PAYLOCITY HOLDING
CORPORATIONUnaudited Consolidated Balance
Sheets(in thousands, except per share
data) |
|
June 30,2023 |
|
December 31,2023 |
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
288,767 |
|
|
$ |
366,904 |
|
Accounts receivable, net |
|
25,085 |
|
|
|
32,476 |
|
Deferred contract costs |
|
78,109 |
|
|
|
87,065 |
|
Prepaid expenses and other |
|
35,061 |
|
|
|
48,517 |
|
Total current assets before funds held for clients |
|
427,022 |
|
|
|
534,962 |
|
Funds held for clients |
|
2,621,415 |
|
|
|
3,271,736 |
|
Total current assets |
|
3,048,437 |
|
|
|
3,806,698 |
|
Capitalized internal-use
software, net |
|
86,127 |
|
|
|
103,281 |
|
Property and equipment,
net |
|
64,069 |
|
|
|
63,150 |
|
Operating lease right-of-use
assets |
|
44,067 |
|
|
|
37,441 |
|
Intangible assets, net |
|
34,527 |
|
|
|
32,466 |
|
Goodwill |
|
102,054 |
|
|
|
109,558 |
|
Long-term deferred contract
costs |
|
294,222 |
|
|
|
317,915 |
|
Long‑term prepaid expenses and
other |
|
6,331 |
|
|
|
5,567 |
|
Deferred income tax
assets |
|
15,846 |
|
|
|
16,644 |
|
Total assets |
$ |
3,695,680 |
|
|
$ |
4,492,720 |
|
|
|
|
|
Liabilities and
Stockholders’ Equity |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
6,153 |
|
|
$ |
7,973 |
|
Accrued expenses |
|
143,287 |
|
|
|
147,121 |
|
Total current liabilities before client fund obligations |
|
149,440 |
|
|
|
155,094 |
|
Client fund obligations |
|
2,625,355 |
|
|
|
3,267,771 |
|
Total current liabilities |
|
2,774,795 |
|
|
|
3,422,865 |
|
Long-term operating lease
liabilities |
|
62,471 |
|
|
|
50,963 |
|
Other long-term
liabilities |
|
3,731 |
|
|
|
4,177 |
|
Deferred income tax
liabilities |
|
11,820 |
|
|
|
27,942 |
|
Total liabilities |
$ |
2,852,817 |
|
|
$ |
3,505,947 |
|
Stockholders’ equity: |
|
|
|
Preferred stock, $0.001 par value, 5,000 authorized, no shares
issued and outstanding at June 30, 2023 and December 31,
2023 |
$ |
— |
|
|
$ |
— |
|
Common stock, $0.001 par value, 155,000 shares authorized at
June 30, 2023 and December 31, 2023; 55,912 shares issued
and outstanding at June 30, 2023 and 56,313 shares issued and
outstanding at December 31, 2023 |
|
56 |
|
|
|
56 |
|
Additional paid-in capital |
|
380,632 |
|
|
|
446,860 |
|
Retained earnings |
|
466,690 |
|
|
|
539,323 |
|
Accumulated other comprehensive income (loss) |
|
(4,515 |
) |
|
|
534 |
|
Total stockholders' equity |
$ |
842,863 |
|
|
$ |
986,773 |
|
Total liabilities and stockholders’ equity |
$ |
3,695,680 |
|
|
$ |
4,492,720 |
|
PAYLOCITY HOLDING
CORPORATIONUnaudited Consolidated Statements of
Operations and Comprehensive Income(in thousands,
except per share data) |
|
Three Months EndedDecember
31, |
|
Six Months EndedDecember 31, |
|
2022 |
|
2023 |
|
2022 |
|
2023 |
Revenues: |
|
|
|
|
|
|
|
Recurring and other revenue |
$ |
256,434 |
|
|
$ |
298,416 |
|
|
$ |
501,840 |
|
|
$ |
590,101 |
|
Interest income on funds held for clients |
|
16,574 |
|
|
|
27,945 |
|
|
|
24,448 |
|
|
|
53,846 |
|
Total revenues |
|
273,008 |
|
|
|
326,361 |
|
|
|
526,288 |
|
|
|
643,947 |
|
Cost of revenues |
|
90,076 |
|
|
|
107,399 |
|
|
|
174,619 |
|
|
|
208,866 |
|
Gross profit |
|
182,932 |
|
|
|
218,962 |
|
|
|
351,669 |
|
|
|
435,081 |
|
Operating expenses: |
|
|
|
|
|
|
|
Sales and marketing |
|
75,694 |
|
|
|
79,777 |
|
|
|
146,757 |
|
|
|
160,180 |
|
Research and development |
|
41,029 |
|
|
|
46,139 |
|
|
|
81,122 |
|
|
|
90,744 |
|
General and administrative |
|
48,001 |
|
|
|
43,340 |
|
|
|
98,493 |
|
|
|
93,262 |
|
Total operating expenses |
|
164,724 |
|
|
|
169,256 |
|
|
|
326,372 |
|
|
|
344,186 |
|
Operating income |
|
18,208 |
|
|
|
49,706 |
|
|
|
25,297 |
|
|
|
90,895 |
|
Other income (expense) |
|
(5 |
) |
|
|
3,800 |
|
|
|
(168 |
) |
|
|
7,025 |
|
Income before income taxes |
|
18,203 |
|
|
|
53,506 |
|
|
|
25,129 |
|
|
|
97,920 |
|
Income tax expense
(benefit) |
|
2,603 |
|
|
|
15,390 |
|
|
|
(20,823 |
) |
|
|
25,287 |
|
Net income |
$ |
15,600 |
|
|
$ |
38,116 |
|
|
$ |
45,952 |
|
|
$ |
72,633 |
|
Other comprehensive income
(loss), net of tax |
|
516 |
|
|
|
4,929 |
|
|
|
(1,856 |
) |
|
|
5,049 |
|
Comprehensive income |
$ |
16,116 |
|
|
$ |
43,045 |
|
|
$ |
44,096 |
|
|
$ |
77,682 |
|
|
|
|
|
|
|
|
|
Net income per share: |
|
|
|
|
|
|
|
Basic |
$ |
0.28 |
|
|
$ |
0.68 |
|
|
$ |
0.83 |
|
|
$ |
1.29 |
|
Diluted |
$ |
0.28 |
|
|
$ |
0.67 |
|
|
$ |
0.81 |
|
|
$ |
1.28 |
|
|
|
|
|
|
|
|
|
Weighted-average shares used
in computing net income per share: |
|
|
|
|
|
|
|
Basic |
|
55,721 |
|
|
|
56,244 |
|
|
|
55,587 |
|
|
|
56,140 |
|
Diluted |
|
56,474 |
|
|
|
56,855 |
|
|
|
56,559 |
|
|
|
56,906 |
|
Stock-based compensation expense and employer payroll taxes
related to stock releases and option exercises for each of the
three and six months ended December 31, are included in the above
line items:
|
Three Months EndedDecember
31, |
|
Six Months EndedDecember 31, |
|
2022 |
|
2023 |
|
2022 |
|
2023 |
Cost of revenues |
$ |
5,310 |
|
|
$ |
5,639 |
|
|
$ |
10,355 |
|
|
$ |
11,241 |
|
Sales and marketing |
|
10,871 |
|
|
|
10,156 |
|
|
|
21,371 |
|
|
|
20,027 |
|
Research and development |
|
11,472 |
|
|
|
11,565 |
|
|
|
21,706 |
|
|
|
22,435 |
|
General and
administrative |
|
16,328 |
|
|
|
16,502 |
|
|
|
35,527 |
|
|
|
32,135 |
|
Total stock-based compensation
expense and employer payroll taxes related to stock releases and
option exercises |
$ |
43,981 |
|
|
$ |
43,862 |
|
|
$ |
88,959 |
|
|
$ |
85,838 |
|
PAYLOCITY HOLDING
CORPORATIONUnaudited Consolidated Statements of
Cash Flows(in thousands) |
|
Six Months EndedDecember 31, |
|
|
2022 |
|
|
|
2023 |
|
Cash flows from operating
activities: |
|
|
|
Net income |
$ |
45,952 |
|
|
$ |
72,633 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
Stock-based compensation expense |
|
83,364 |
|
|
|
82,213 |
|
Depreciation and amortization expense |
|
29,094 |
|
|
|
35,501 |
|
Deferred income tax expense (benefit) |
|
(20,856 |
) |
|
|
15,225 |
|
Provision for credit losses |
|
602 |
|
|
|
463 |
|
Net accretion of discounts on available-for-sale securities |
|
(2,039 |
) |
|
|
(2,683 |
) |
Other |
|
1,410 |
|
|
|
(3,870 |
) |
Changes in operating assets and liabilities: |
|
|
|
Accounts receivable |
|
(9,377 |
) |
|
|
(7,052 |
) |
Deferred contract costs |
|
(40,638 |
) |
|
|
(30,743 |
) |
Prepaid expenses and other |
|
616 |
|
|
|
(11,328 |
) |
Accounts payable |
|
(392 |
) |
|
|
1,131 |
|
Accrued expenses and other |
|
(8,979 |
) |
|
|
(14,278 |
) |
Net cash provided by operating activities |
|
78,757 |
|
|
|
137,212 |
|
Cash flows from investing
activities: |
|
|
|
Purchases of available-for-sale securities |
|
(296,060 |
) |
|
|
(164,815 |
) |
Proceeds from sales and maturities of available-for-sale
securities |
|
190,253 |
|
|
|
150,851 |
|
Capitalized internal-use software costs |
|
(19,740 |
) |
|
|
(29,483 |
) |
Purchases of property and equipment |
|
(6,663 |
) |
|
|
(6,142 |
) |
Acquisitions of businesses, net of cash acquired |
|
— |
|
|
|
(12,015 |
) |
Other investing activities |
|
29 |
|
|
|
(583 |
) |
Net cash used in investing activities |
|
(132,181 |
) |
|
|
(62,187 |
) |
Cash flows from financing
activities: |
|
|
|
Net change in client fund obligations |
|
(922,079 |
) |
|
|
642,416 |
|
Proceeds from employee stock purchase plan |
|
8,450 |
|
|
|
9,534 |
|
Taxes paid related to net share settlement of equity awards |
|
(79,369 |
) |
|
|
(35,390 |
) |
Other financing activities |
|
(864 |
) |
|
|
13,356 |
|
Net cash provided by (used in) financing activities |
|
(993,862 |
) |
|
|
629,916 |
|
Net change in cash, cash
equivalents and funds held for clients' cash and cash
equivalents |
|
(1,047,286 |
) |
|
|
704,941 |
|
Cash, cash equivalents and
funds held for clients' cash and cash equivalents—beginning of
period |
|
3,793,453 |
|
|
|
2,421,312 |
|
Cash, cash equivalents and
funds held for clients' cash and cash equivalents—end of
period |
$ |
2,746,167 |
|
|
$ |
3,126,253 |
|
Supplemental Disclosure of
Non-Cash Investing and Financing Activities |
|
|
|
Purchases of property and equipment, accrued but not paid |
$ |
— |
|
|
$ |
3,422 |
|
Liabilities assumed for acquisitions |
$ |
117 |
|
|
$ |
382 |
|
Supplemental Disclosure of
Cash Flow Information |
|
|
|
Cash paid for interest |
$ |
157 |
|
|
$ |
247 |
|
Cash paid (refunds received) for income taxes |
$ |
(158 |
) |
|
$ |
25,561 |
|
Reconciliation of cash, cash
equivalents and funds held for clients' cash and cash equivalents
to the Consolidated Balance Sheets |
|
|
|
Cash and cash equivalents |
$ |
120,053 |
|
|
$ |
366,904 |
|
Funds held for clients' cash
and cash equivalents |
|
2,626,114 |
|
|
|
2,759,349 |
|
Total cash, cash equivalents
and funds held for clients' cash and cash equivalents |
$ |
2,746,167 |
|
|
$ |
3,126,253 |
|
Paylocity Holding
CorporationReconciliation of GAAP to non-GAAP
Financial Measures(In thousands except per share
data) |
|
Three Months EndedDecember
31, |
|
Six Months EndedDecember 31, |
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
Reconciliation from
Gross profit to Adjusted gross profit: |
|
|
|
|
|
|
|
Gross profit |
$ |
182,932 |
|
|
$ |
218,962 |
|
|
$ |
351,669 |
|
|
$ |
435,081 |
|
Amortization of capitalized
internal-use software costs |
|
7,478 |
|
|
|
10,676 |
|
|
|
14,520 |
|
|
|
20,211 |
|
Amortization of certain
acquired intangibles |
|
1,853 |
|
|
|
1,853 |
|
|
|
3,707 |
|
|
|
3,707 |
|
Stock-based compensation
expense and employer payroll taxes related to stock releases and
option exercises |
|
5,310 |
|
|
|
5,639 |
|
|
|
10,355 |
|
|
|
11,241 |
|
Other items (1) |
|
— |
|
|
|
— |
|
|
|
19 |
|
|
|
— |
|
Adjusted gross profit |
$ |
197,573 |
|
|
$ |
237,130 |
|
|
$ |
380,270 |
|
|
$ |
470,240 |
|
|
Three Months EndedDecember
31, |
|
Six Months EndedDecember 31, |
|
2022 |
|
2023 |
|
2022 |
|
2023 |
Reconciliation from
Operating income to Non-GAAP Operating income: |
|
|
|
|
|
|
|
Operating income |
$ |
18,208 |
|
|
$ |
49,706 |
|
|
$ |
25,297 |
|
|
$ |
90,895 |
|
Stock-based compensation
expense and employer payroll taxes related to stock releases and
option exercises |
|
43,981 |
|
|
|
43,862 |
|
|
|
88,959 |
|
|
|
85,838 |
|
Amortization of acquired
intangibles |
|
2,770 |
|
|
|
2,525 |
|
|
|
5,541 |
|
|
|
5,061 |
|
Other items (2) |
|
151 |
|
|
|
(3,328 |
) |
|
|
416 |
|
|
|
(2,143 |
) |
Non-GAAP Operating income |
$ |
65,110 |
|
|
$ |
92,765 |
|
|
$ |
120,213 |
|
|
$ |
179,651 |
|
|
Three Months EndedDecember
31, |
|
Six Months EndedDecember 31, |
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
Reconciliation from
Net income to Non-GAAP Net income: |
|
|
|
|
|
|
|
Net income |
$ |
15,600 |
|
|
$ |
38,116 |
|
|
$ |
45,952 |
|
|
$ |
72,633 |
|
Stock-based compensation
expense and employer payroll taxes related to stock releases and
option exercises |
|
43,981 |
|
|
|
43,862 |
|
|
|
88,959 |
|
|
|
85,838 |
|
Amortization of acquired
intangibles |
|
2,770 |
|
|
|
2,525 |
|
|
|
5,541 |
|
|
|
5,061 |
|
Other items (2) |
|
151 |
|
|
|
(3,328 |
) |
|
|
416 |
|
|
|
(2,143 |
) |
Income tax effect on
adjustments (3) |
|
496 |
|
|
|
3,294 |
|
|
|
(22,439 |
) |
|
|
2,464 |
|
Non-GAAP Net income |
$ |
62,998 |
|
|
$ |
84,469 |
|
|
$ |
118,429 |
|
|
$ |
163,853 |
|
|
Three Months EndedDecember
31, |
|
Six Months EndedDecember 31, |
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
Calculation of
Non-GAAP Net income per share: |
|
|
|
|
|
|
|
Non-GAAP Net income |
$ |
62,998 |
|
|
$ |
84,469 |
|
|
$ |
118,429 |
|
|
$ |
163,853 |
|
Diluted weighted-average
number of common shares |
|
56,474 |
|
|
|
56,855 |
|
|
|
56,559 |
|
|
|
56,906 |
|
Non-GAAP Net income per
share |
$ |
1.12 |
|
|
$ |
1.49 |
|
|
$ |
2.09 |
|
|
$ |
2.88 |
|
|
Three Months EndedDecember
31, |
|
Six Months EndedDecember 31, |
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
Reconciliation from
Net income to Adjusted EBITDA: |
|
|
|
|
|
|
|
Net income |
$ |
15,600 |
|
|
$ |
38,116 |
|
|
$ |
45,952 |
|
|
$ |
72,633 |
|
Interest expense |
|
190 |
|
|
|
189 |
|
|
|
377 |
|
|
|
379 |
|
Income tax expense
(benefit) |
|
2,603 |
|
|
|
15,390 |
|
|
|
(20,823 |
) |
|
|
25,287 |
|
Depreciation and amortization
expense |
|
14,827 |
|
|
|
18,380 |
|
|
|
29,094 |
|
|
|
35,501 |
|
EBITDA |
|
33,220 |
|
|
|
72,075 |
|
|
|
54,600 |
|
|
|
133,800 |
|
Stock-based compensation
expense and employer payroll taxes related to stock releases and
option exercises |
|
43,981 |
|
|
|
43,862 |
|
|
|
88,959 |
|
|
|
85,838 |
|
Other items (2) |
|
151 |
|
|
|
(3,328 |
) |
|
|
416 |
|
|
|
(2,143 |
) |
Adjusted EBITDA |
$ |
77,352 |
|
|
$ |
112,609 |
|
|
$ |
143,975 |
|
|
$ |
217,495 |
|
|
Three Months EndedDecember
31, |
|
Six Months EndedDecember 31, |
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
Reconciliation of
Non-GAAP sales and marketing: |
|
|
|
|
|
|
|
Sales and marketing |
$ |
75,694 |
|
|
$ |
79,777 |
|
|
$ |
146,757 |
|
|
$ |
160,180 |
|
Less: Stock-based compensation
expense and employer payroll taxes related to stock releases and
option exercises |
|
10,871 |
|
|
|
10,156 |
|
|
|
21,371 |
|
|
|
20,027 |
|
Less: Other items (1) |
|
— |
|
|
|
— |
|
|
|
22 |
|
|
|
— |
|
Non-GAAP sales and
marketing |
$ |
64,823 |
|
|
$ |
69,621 |
|
|
$ |
125,364 |
|
|
$ |
140,153 |
|
|
Three Months EndedDecember
31, |
|
Six Months EndedDecember 31, |
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
Reconciliation of
Non-GAAP total research and development: |
|
|
|
|
|
|
|
Research and development |
$ |
41,029 |
|
|
$ |
46,139 |
|
|
$ |
81,122 |
|
|
$ |
90,744 |
|
Add: Capitalized internal-use
software costs |
|
9,787 |
|
|
|
15,290 |
|
|
|
19,740 |
|
|
|
29,483 |
|
Less: Stock-based compensation
expense and employer payroll taxes related to stock releases and
option exercises |
|
11,472 |
|
|
|
11,565 |
|
|
|
21,706 |
|
|
|
22,435 |
|
Less: Other items (4) |
|
151 |
|
|
|
138 |
|
|
|
369 |
|
|
|
360 |
|
Non-GAAP total research and
development |
$ |
39,193 |
|
|
$ |
49,726 |
|
|
$ |
78,787 |
|
|
$ |
97,432 |
|
|
Three Months EndedDecember
31, |
|
Six Months EndedDecember 31, |
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
Reconciliation of
Non-GAAP general and administrative: |
|
|
|
|
|
|
|
General and
administrative |
$ |
48,001 |
|
|
$ |
43,340 |
|
|
$ |
98,493 |
|
|
$ |
93,262 |
|
Less: Stock-based compensation
expense and employer payroll taxes related to stock releases and
option exercises |
|
16,328 |
|
|
|
16,502 |
|
|
|
35,527 |
|
|
|
32,135 |
|
Less: Amortization of certain
acquired intangibles |
|
917 |
|
|
|
672 |
|
|
|
1,834 |
|
|
|
1,354 |
|
Less: Other items (2) |
|
— |
|
|
|
(3,466 |
) |
|
|
6 |
|
|
|
(2,503 |
) |
Non-GAAP general and
administrative |
$ |
30,756 |
|
|
$ |
29,632 |
|
|
$ |
61,126 |
|
|
$ |
62,276 |
|
|
Six Months EndedDecember 31, |
|
|
2022 |
|
|
|
2023 |
|
Reconciliation of Free
Cash Flow: |
|
|
|
Net cash provided by operating
activities |
$ |
78,757 |
|
|
$ |
137,212 |
|
Capitalized internal-use
software costs |
|
(19,740 |
) |
|
|
(29,483 |
) |
Purchases of property and
equipment |
|
(6,663 |
) |
|
|
(6,142 |
) |
Free Cash Flow |
$ |
52,354 |
|
|
$ |
101,587 |
|
(1) Represents acquisition-related costs.
(2) Represents acquisition and other nonrecurring
transaction-related costs and lease exit activity.
(3) Includes the income tax effect on non-GAAP net income
adjustments related to stock-based compensation expense and
employer payroll taxes related to stock releases and option
exercises, amortization of acquired intangibles and other items,
which include acquisition and other nonrecurring
transaction-related costs and lease exit activity.
(4) Represents acquisition and other nonrecurring
transaction-related costs.
Contact:Ryan
Glenninvestors@paylocity.comwww.paylocity.com
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