Company Performance - Paylocity (PCTY) reported quarterly earnings of $1.56 per share, exceeding the Zacks Consensus Estimate of $1.38 per share, and up from $1.48 per share a year ago [1] - The earnings surprise for this quarter was +13.04%, and the company has surpassed consensus EPS estimates in all four of the last quarters [2] - Revenues for the quarter ended June 2025 were $400.74 million, surpassing the Zacks Consensus Estimate by 3.10%, and up from $357.29 million year-over-year [3] Market Performance - Paylocity shares have declined approximately 8% since the beginning of the year, while the S&P 500 has gained 7.6% [4] - The current Zacks Rank for Paylocity is 4 (Sell), indicating expectations of underperformance in the near future [7] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $1.48 on revenues of $391.24 million, and for the current fiscal year, it is $7.03 on revenues of $1.71 billion [8] - The Internet - Software industry, to which Paylocity belongs, is currently ranked in the top 32% of over 250 Zacks industries, suggesting a favorable industry outlook [9]

Financial Data and Key Metrics Changes - Recurring revenue for Q4 was $369.9 million, an increase of 14%, with total revenue up 12% year-over-year [15] - For fiscal year 2025, recurring revenue grew 15% and total revenue grew 14%, ending the year with $1.6 billion in revenue [8][15] - Adjusted EBITDA for Q4 was $130.7 million, representing a 32.6% margin, exceeding guidance by $8 million [15] - Fiscal year 2025 adjusted EBITDA was $583 million, a 36.5% margin, reflecting a 15% increase from fiscal year 2024 [15] - Free cash flow margin for fiscal year 2025 was 21.5%, a 12% increase year-over-year [16] Business Line Data and Key Metrics Changes - Average revenue per client reached over $35,300 in fiscal year 2025, up approximately 8% from $32,800 in fiscal year 2024 [9] - The client base grew by 7% to 41,650 existing clients [9] Market Data and Key Metrics Changes - The broker channel represented more than 25% of new business in fiscal year 2025, indicating strong channel performance [12] - Revenue retention remained consistent at greater than 92% in fiscal year 2025 [12] Company Strategy and Development Direction - The launch of Paylocity for Finance aims to unify finance and HR functions, enhancing product offerings and driving future growth [9][12] - Continued investment in R&D is seen as crucial for product differentiation and future growth, with R&D investments at 14.3% of revenue for fiscal year 2025 [16][17] - The company is focused on expanding its sales force and enhancing productivity to drive recurring revenue growth [11] Management's Comments on Operating Environment and Future Outlook - Management noted a stable demand environment throughout fiscal year 2025, with consistent year-over-year growth in units and ARPU [30] - The company expressed confidence in its differentiated value proposition and operational strength, setting a positive outlook for fiscal year 2026 [21][22] Other Important Information - The company repurchased approximately 315,000 shares in Q4 at an average price of $178.21 per share, totaling $56 million [19] - The board increased the share repurchase authorization by an additional $500 million [20] Q&A Session Summary Question: How do we think about the demand environment right now? - Management observed a stable demand environment with consistent growth in units and ARPU throughout fiscal year 2025 [30] Question: Can you help us understand the significant jump in sales and marketing expenses? - The increase was attributed to typical year-end timing, including bonus payments and hiring in Q4 [32] Question: Does the integration of Airbase mean it's complete? - The first phase of integration is complete, with ongoing opportunities for further integration and enhancements [38] Question: What are the expectations for Paylocity for Finance? - Early feedback is positive, with expectations for gradual adoption and higher revenue per client compared to typical HCM modules [50][52] Question: What is the current stage of AI investments for internal operations? - The company is in the early stages of AI integration, with ongoing investments expected to enhance client experience and operational efficiency [67][68] Question: What is the retention rate for fiscal year 2025? - Retention remained strong at over 92%, with no significant changes noted [69]

Financial Data and Key Metrics Changes - Recurring revenue for Q4 was $369.9 million, an increase of 14%, with total revenue up 12% year-over-year [14] - For fiscal year 2025, recurring revenue grew 15% and total revenue grew 14%, ending the year with $1.6 billion in revenue [6][14] - Adjusted EBITDA for Q4 was $130.7 million, representing a 32.6% margin, exceeding guidance by $8 million [14] - Free cash flow margin for fiscal 2025 was 21.5%, a 12% increase year-over-year [15] Business Line Data and Key Metrics Changes - Average revenue per client reached approximately $35,300 in fiscal 2025, an increase of about 8% from $32,800 in fiscal 2024 [8] - The client base grew by 7% to 41,650 existing clients [8] Market Data and Key Metrics Changes - The broker channel represented more than 25% of new business in fiscal 2025, indicating strong channel performance [10] - Revenue retention remained consistent at over 92% in fiscal 2025 [11] Company Strategy and Development Direction - The launch of Paylocity for Finance aims to unify finance and HR functions, enhancing product offerings and driving future growth [6][11] - Continued investment in R&D, with total R&D investments at 14.3% of revenue for fiscal 2025, reflecting a 14% year-over-year increase [15] - The company is focused on integrating Airbase into its platform, with ongoing enhancements expected quarterly [38] Management's Comments on Operating Environment and Future Outlook - Management noted a stable demand environment throughout fiscal 2025, with strong execution from the sales team contributing to results [29][106] - The company remains confident in its differentiated value proposition and operational strength as it enters fiscal 2026 [19][20] Other Important Information - The company repurchased approximately 315,000 shares in Q4 at an average price of $178.21 per share, totaling $56 million [17] - The board increased the share repurchase authorization by an additional $500 million [18] Q&A Session Summary Question: How do we think about the demand environment right now? - Management observed a stable demand environment throughout fiscal 2025, with consistent year-over-year growth in units and ARPU [29] Question: Can you help us understand the significant jump in sales and marketing expenses? - The increase was attributed to typical year-end timing, including bonus payments and hiring in Q4 [31] Question: Does the integration of Airbase mean it's complete? - The first phase of integration is complete, with opportunities for further integration and enhancements expected [38] Question: Any insights on free cash flow outlook for fiscal 2026? - Management indicated potential tailwinds from new tax legislation that could reduce federal taxes and positively impact free cash flow [40] Question: What are the expectations for Paylocity for Finance? - Early feedback from customers has been positive, with expectations for gradual penetration into the existing client base [50] Question: How does the launch of Paylocity for Finance change the competitive landscape? - The integrated platform offers significant value, differentiating the company from competitors in the HCM space [80]

Financial Performance & Growth - Total revenue has grown consistently, with FY25 reaching $1595 million and a projected $1715 million for FY26 [9] - The company anticipates a 12% year-over-year (YoY) growth in total revenue [9] - Adjusted EBITDA shows increasing profitability, reaching $583 million in FY25 and a projected $614 million in FY26 [9] - The company has successfully driven approximately 400 basis points of Adjusted EBITDA margin leverage since FY23 [57] - Free Cash Flow (FCF) also demonstrates leverage, reaching $219 million in FY25 [59] Market & Product Strategy - The company estimates a Realized HCM Total Addressable Market (TAM) of approximately $22 billion [12] - The company has penetrated approximately 3% of its addressable market [13] - Over 25% of new client revenue comes from referrals from channels [46] - The company has over 92% net revenue retention as a public company [47] - Total Non-GAAP R&D investment has increased to $227 million in FY25 [24]

Press Release Overview [Executive Summary](index=1&type=section&id=Executive_Summary) Paylocity announced strong financial results for the fourth quarter and full fiscal year 2025, driven by solid sales, operational execution, and continued expansion of average revenue per client, alongside a 7% increase in its client base. The company also launched 'Paylocity for Finance' and returned capital to shareholders through share repurchases - Fiscal Year 2025 saw strong performance with **15% recurring and other revenue growth** and **14% total revenue growth**[2](index=2&type=chunk) - Growth was driven by continued expansion of average revenue per client and a **7% increase in the client base**[2](index=2&type=chunk) - Launched 'Paylocity for Finance,' expanding the modern workforce platform into the Office of the CFO to unify finance and HR teams[2](index=2&type=chunk) - Returned capital to shareholders by repurchasing **$150 million** (approximately **800,000 shares**) of stock during FY25[2](index=2&type=chunk) [Key Recent Achievements](index=1&type=section&id=Key_Recent_Achievements) Paylocity achieved significant financial growth in FY25, including double-digit revenue increases and substantial share repurchases, alongside the strategic launch of Paylocity for Finance to expand its platform capabilities Key Revenue Highlights (Q4 & FY 2025) | Metric | Q4 2025 | YoY Change | FY 2025 | YoY Change | | :-------------------------- | :---------- | :--------- | :---------- | :--------- | | Recurring & Other Revenue | $369.9 million | +14% | $1,471.8 million | +15% | | Total Revenue | $400.7 million | +12% | $1,595.2 million | +14% | - Repurchased **800,000 shares** of common stock for **$150 million** during FY 2025[5](index=5&type=chunk) - Increased share repurchase authorization by **$500 million**[5](index=5&type=chunk) - Announced the launch of Paylocity for Finance, expanding the platform's reach into the Office of the CFO, unifying HR and Finance through a single system of record[5](index=5&type=chunk) Financial Performance [Fourth Quarter Fiscal 2025 Financial Highlights](index=1&type=section&id=Fourth_Quarter_Fiscal_2025_Financial_Highlights) Paylocity reported solid fourth-quarter growth with recurring and total revenue increasing by 14% and 12% respectively. GAAP operating income saw a modest increase, while GAAP net income remained stable year-over-year. Adjusted EBITDA also showed healthy growth [Revenue](index=1&type=section&id=Q4_Revenue) Q4 2025 Revenue Performance | Metric | Q4 2025 | Q4 2024 | YoY Change | | :-------------------------- | :---------- | :---------- | :--------- | | Recurring & Other Revenue | $369.9 million | $324.7 million | +14% | | Total Revenue | $400.7 million | $357.3 million | +12% | [Operating Income](index=2&type=section&id=Q4_Operating_Income) Q4 2025 Operating Income | Metric | Q4 2025 | Q4 2024 | | :-------------------- | :---------- | :---------- | | GAAP Operating Income | $66.2 million | $62.9 million | | Non-GAAP Operating Income | $105.6 million | $96.3 million | [Net Income](index=2&type=section&id=Q4_Net_Income) Q4 2025 Net Income | Metric | Q4 2025 | Q4 2024 | | :-------------------- | :---------- | :---------- | | GAAP Net Income | $48.6 million | $48.8 million | | GAAP Diluted EPS | $0.86 | $0.86 | | Diluted Shares Outstanding | 56.3 million | 56.9 million | [Adjusted EBITDA](index=2&type=section&id=Q4_Adjusted_EBITDA) Q4 2025 Adjusted EBITDA | Metric | Q4 2025 | Q4 2024 | | :------------------------------------------------ | :---------- | :---------- | | Adjusted EBITDA | $130.7 million | $120.2 million | | Adjusted EBITDA (excl. interest income on client funds) | $99.9 million | $87.6 million | [Fiscal Year 2025 Financial Highlights](index=1&type=section&id=Fiscal_Year_2025_Financial_Highlights) Paylocity delivered strong full fiscal year 2025 results, with total revenue growing 14% and GAAP net income increasing 10%. Adjusted EBITDA also saw a significant 15% rise, demonstrating robust profitability and operational efficiency. The company also strengthened its balance sheet and generated substantial free cash flow [Revenue](index=1&type=section&id=FY25_Revenue) FY 2025 Revenue Performance | Metric | FY 2025 | FY 2024 | YoY Change | | :-------------------------- | :---------- | :---------- | :--------- | | Recurring & Other Revenue | $1,471.8 million | $1,281.7 million | +15% | | Total Revenue | $1,595.2 million | $1,402.5 million | +14% | [Operating Income](index=2&type=section&id=FY25_Operating_Income) FY 2025 Operating Income | Metric | FY 2025 | FY 2024 | | :-------------------- | :---------- | :---------- | | GAAP Operating Income | $304.0 million | $260.1 million | | Non-GAAP Operating Income | $484.4 million | $421.9 million | [Net Income](index=1&type=section&id=FY25_Net_Income) FY 2025 Net Income | Metric | FY 2025 | FY 2024 | YoY Change | | :-------------------- | :---------- | :---------- | :--------- | | GAAP Net Income | $227.1 million | $206.8 million | +10% | | GAAP Diluted EPS | $4.02 | $3.63 | +10.7% | | Diluted Shares Outstanding | 56.6 million | 57.0 million | | [Adjusted EBITDA](index=1&type=section&id=FY25_Adjusted_EBITDA) FY 2025 Adjusted EBITDA | Metric | FY 2025 | FY 2024 | YoY Change | | :------------------------------------------------ | :---------- | :---------- | :--------- | | Adjusted EBITDA | $583.0 million | $505.6 million | +15% | | Adjusted EBITDA Margin | 36.5% | 36.0% | +0.5 pp | | Adjusted EBITDA (excl. interest income on client funds) | $459.6 million | $384.7 million | +19% | | Adjusted EBITDA (excl. interest income on client funds) Margin | 31.2% | 30.0% | +1.2 pp | [Balance Sheet and Cash Flow](index=2&type=section&id=FY25_Balance_Sheet_and_Cash_Flow) FY 2025 Balance Sheet and Cash Flow Highlights | Metric | FY 2025 | FY 2024 | YoY Change | | :------------------------------------------------ | :---------- | :---------- | :--------- | | Cash and Cash Equivalents (end of year) | $398.1 million | $401.8 million | -0.9% | | Long-term Debt (end of year) | $162.5 million | $0 | N/A | | Net Cash Provided by Operating Activities | $418.2 million | $384.7 million | +8.7% | | Free Cash Flow | $342.8 million | $305.9 million | +12.0% | | Free Cash Flow Margin | 21.5% | 21.8% | -0.3 pp | | Free Cash Flow (excl. interest income on client funds) | $219.3 million | $185.1 million | +18.5% | | Free Cash Flow (excl. interest income on client funds) Margin | 14.9% | 14.4% | +0.5 pp | - Repaid approximately **$162.5 million** on outstanding long-term debt during the second half of fiscal year 2025, incurred to fund the acquisition of Airbase on October 1, 2024[13](index=13&type=chunk) Business Outlook [First Quarter 2026 Guidance](index=3&type=section&id=First_Quarter_2026_Guidance) For Q1 2026, Paylocity expects recurring and other revenue to grow approximately 12% to $370.0-$375.0 million, and total revenue to grow approximately 10% to $397.5-$402.5 million. Adjusted EBITDA is projected to be between $131.0 million and $135.0 million Q1 FY26 Financial Guidance | Metric | Q1 FY26 Guidance | Growth vs. Q1 FY25 | | :------------------------------------------------ | :-------------------- | :----------------- | | Recurring & Other Revenue | $370.0M - $375.0M | ~12% | | Total Revenue | $397.5M - $402.5M | ~10% | | Adjusted EBITDA | $131.0M - $135.0M | | | Adjusted EBITDA (excl. interest income on client funds) | $103.5M - $107.5M | | [Fiscal Year 2026 Guidance](index=3&type=section&id=Fiscal_Year_2026_Guidance) For FY 2026, the company anticipates recurring and other revenue of $1.597-$1.612 billion (approx. 9% growth) and total revenue of $1.707-$1.722 billion (approx. 8% growth). Adjusted EBITDA is forecast to be $608.5-$618.5 million FY 2026 Financial Guidance | Metric | FY26 Guidance | Growth vs. FY25 | | :------------------------------------------------ | :-------------------- | :----------------- | | Recurring & Other Revenue | $1.597B - $1.612B | ~9% | | Total Revenue | $1.707B - $1.722B | ~8% | | Adjusted EBITDA | $608.5M - $618.5M | | | Adjusted EBITDA (excl. interest income on client funds) | $498.5M - $508.5M | | - The company is unable to reconcile forward-looking non-GAAP financial measures to their directly comparable GAAP financial measures due to unavailable information without unreasonable effort[18](index=18&type=chunk) Company Information [Conference Call Details](index=3&type=section&id=Conference_Call_Details) Paylocity hosted a conference call on August 5, 2025, to discuss its Q4 and FY25 results, with webcast and replay details provided for investors - Conference call held on **August 5, 2025**, at **4:00 p.m. Central Time** (**5:00 p.m. Eastern Time**)[19](index=19&type=chunk) - Live audio webcast and replay available through https://investors.paylocity.com/events-and-presentations[19](index=19&type=chunk) [About Paylocity](index=3&type=section&id=About_Paylocity) Paylocity is a leading cloud-based provider of HR, payroll, and spend management software solutions, founded in 1997 and publicly traded since 2014, known for its intuitive product suite and strong company culture - Paylocity is a leading provider of cloud-based HR, payroll, and spend management software solutions[20](index=20&type=chunk) - Founded in **1997** and publicly traded since **2014**, headquartered in Schaumburg, IL[20](index=20&type=chunk) - Offers an intuitive, easy-to-use product suite that helps businesses with automation, data-driven insights, and engagement to create great workplaces[20](index=20&type=chunk) Supplemental Information [Non-GAAP Financial Measures](index=4&type=section&id=Non-GAAP_Financial_Measures) This section explains Paylocity's use of non-GAAP financial measures, which management considers important supplemental performance indicators for planning and evaluating financial and operational performance, and provides detailed reconciliations to their most directly comparable GAAP measures [Explanation of Non-GAAP Measures](index=4&type=section&id=Explanation_of_Non-GAAP_Measures) - Non-GAAP financial measures are used as important supplemental measures for planning, performance analysis, budgeting, and evaluating financial and operational performance[22](index=22&type=chunk) - Definitions are provided for Adjusted EBITDA, Adjusted Gross Profit, Non-GAAP Operating Income, Non-GAAP Net Income, Non-GAAP Sales and Marketing Expense, Non-GAAP Total Research and Development, Non-GAAP General and Administrative Expense, and Free Cash Flow[37](index=37&type=chunk)[39](index=39&type=chunk)[41](index=41&type=chunk)[43](index=43&type=chunk)[44](index=44&type=chunk)[45](index=45&type=chunk)[46](index=46&type=chunk) [Reconciliation of GAAP to Non-GAAP Financial Measures](index=8&type=section&id=Reconciliation_of_GAAP_to_Non-GAAP_Financial_Measures) Reconciliation from Gross Profit to Adjusted Gross Profit (FY25 vs FY24) | Metric (in thousands) | FY 2025 | FY 2024 | | :------------------------------------------------ | :---------- | :---------- | | Gross profit | $1,096,998 | $960,786 | | Amortization of capitalized internal-use software costs | 59,948 | 45,246 | | Amortization of certain acquired intangibles | 16,168 | 7,907 | | Stock-based compensation expense and employer payroll taxes | 19,314 | 20,350 | | Other items (1) | 1,365 | 469 | | **Adjusted gross profit** | **$1,193,793** | **$1,034,758** | Reconciliation from Operating Income to Non-GAAP Operating Income (FY25 vs FY24) | Metric (in thousands) | FY 2025 | FY 2024 | | :------------------------------------------------ | :---------- | :---------- | | Operating income | $304,024 | $260,093 | | Stock-based compensation expense and employer payroll taxes | 150,063 | 152,446 | | Amortization of acquired intangibles | 19,120 | 10,436 | | Other items (2) | 11,182 | (1,091) | | **Non-GAAP Operating income** | **$484,389** | **$421,884** | Reconciliation from Net Income to Non-GAAP Net Income (FY25 vs FY24) | Metric (in thousands) | FY 2025 | FY 2024 | | :------------------------------------------------ | :---------- | :---------- | | Net income | $227,127 | $206,766 | | Stock-based compensation expense and employer payroll taxes | 150,063 | 152,446 | | Amortization of acquired intangibles | 19,120 | 10,436 | | Other items (2) | 11,182 | (1,091) | | Income tax effect on adjustments (3) | (1,842) | 5,493 | | **Non-GAAP Net income** | **$405,650** | **$374,050** | | Diluted weighted-average number of common shares | 56,550 | 56,976 | | **Non-GAAP Net income per share** | **$7.17** | **$6.57** | Reconciliation from Net Income to Adjusted EBITDA (FY25 vs FY24) | Metric (in thousands) | FY 2025 | FY 2024 | | :------------------------------------------------ | :---------- | :---------- | | Net income | $227,127 | $206,766 | | Interest expense | 13,053 | 758 | | Income tax expense | 81,936 | 70,249 | | Depreciation and amortization expense | 99,636 | 76,426 | | **EBITDA** | **421,752** | **354,199** | | Stock-based compensation expense and employer payroll taxes | 150,063 | 152,446 | | Other items (2) | 11,182 | (1,091) | | **Adjusted EBITDA** | **$582,997** | **$505,554** | | Interest income on funds held for clients | (123,420) | (120,835) | | **Adjusted EBITDA excluding interest income on funds held for clients** | **$459,577** | **$384,719** | Reconciliation of Free Cash Flow (FY25 vs FY24) | Metric (in thousands) | FY 2025 | FY 2024 | | :------------------------------------------------ | :---------- | :---------- | | Net cash provided by operating activities | $418,226 | $384,670 | | Capitalized internal-use software costs | (62,402) | (60,726) | | Purchases of property and equipment | (13,073) | (18,028) | | **Free cash flow** | **$342,751** | **$305,916** | | Less: Interest income on funds held for clients | (123,420) | (120,835) | | **Free cash flow excluding interest income on funds held for clients** | **$219,331** | **$185,081** | | Cash paid for other items (6) | 8,032 | 2,039 | | **Adjusted free cash flow excluding interest income on funds held for clients** | **$227,363** | **$187,120** | [Safe Harbor/Forward Looking Statements](index=4&type=section&id=Safe_Harbor_Forward_Looking_Statements) This section contains cautionary statements regarding forward-looking information, highlighting that actual results may differ materially due to various risks and uncertainties, including general economic conditions, interest rate changes, business disruptions, AI technology leverage, client retention, cybersecurity threats, and regulatory changes - Forward-looking statements involve substantial risks and uncertainties, and actual results or events could differ materially from expectations[23](index=23&type=chunk) - Factors that could cause differences include general economic conditions, changes in interest rates, business disruptions, ability to leverage AI, client retention, cybersecurity threats, and regulatory uncertainty[23](index=23&type=chunk) - Paylocity disclaims any obligation to update or alter these forward-looking statements in the future, unless legally required[23](index=23&type=chunk) Consolidated Financial Statements [Consolidated Balance Sheets](index=5&type=section&id=Consolidated_Balance_Sheets) The consolidated balance sheets show Paylocity's financial position as of June 30, 2025, and June 30, 2024, detailing assets, liabilities, and stockholders' equity. Total assets increased to $4.39 billion in FY25 from $4.25 billion in FY24 Consolidated Balance Sheets (as of June 30, in thousands) | Metric | 2025 | 2024 | | :-------------------------------- | :---------- | :---------- | | Total Assets | $4,389,428 | $4,245,460 | | Total Liabilities | $3,155,681 | $3,212,396 | | Total Stockholders' Equity | $1,233,747 | $1,033,064 | | Cash and cash equivalents | $398,070 | $401,811 | | Funds held for clients | $2,704,137 | $2,952,060 | | Long-term debt | $162,500 | — | [Consolidated Statements of Operations and Comprehensive Income](index=6&type=section&id=Consolidated_Statements_of_Operations_and_Comprehensive_Income) The consolidated statements of operations and comprehensive income detail Paylocity's revenues, costs, and profitability for the three months and full fiscal years ended June 30, 2025, and 2024, showing growth in total revenues and net income Consolidated Statements of Operations (Year Ended June 30, in thousands) | Metric | 2025 | 2024 | | :-------------------------------- | :---------- | :---------- | | Total revenues | $1,595,221 | $1,402,515 | | Gross profit | $1,096,998 | $960,786 | | Operating income | $304,024 | $260,093 | | Net income | $227,127 | $206,766 | | Diluted Net income per share | $4.02 | $3.63 | Consolidated Statements of Operations (Three Months Ended June 30, in thousands) | Metric | 2025 | 2024 | | :-------------------------------- | :---------- | :---------- | | Total revenues | $400,737 | $357,287 | | Gross profit | $271,872 | $240,407 | | Operating income | $66,227 | $62,909 | | Net income | $48,606 | $48,819 | | Diluted Net income per share | $0.86 | $0.86 | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated_Statements_of_Cash_Flows) The consolidated statements of cash flows illustrate the sources and uses of cash for operating, investing, and financing activities for the fiscal years ended June 30, 2025, 2024, and 2023, showing increased cash flow from operations and significant investing outflows due to acquisitions Consolidated Statements of Cash Flows (Year Ended June 30, in thousands) | Metric | 2025 | 2024 | 2023 | | :-------------------------------- | :---------- | :---------- | :---------- | | Net cash provided by operating activities | $418,226 | $384,670 | $282,723 | | Net cash used in investing activities | $(455,548) | $(101,891) | $(220,162) | | Net cash provided by (used in) financing activities | $(325,821) | $141,578 | $(1,434,702) | | Acquisitions of businesses, net of cash acquired | $(277,851) | $(12,031) | — | | Repurchases of common shares | $(149,638) | $(150,000) | — |

Core Insights - Paylocity Holding Corporation reported strong financial results for fiscal year 2025, with a 14% increase in total revenue and a 15% increase in recurring and other revenue, driven by client base expansion and increased average revenue per client [2][5][6] Financial Performance - For Q4 2025, total revenue reached $400.7 million, up 12% year-over-year, while recurring and other revenue was $369.9 million, up 14% year-over-year [5][6] - Fiscal year 2025 total revenue was $1,595.2 million, a 14% increase from fiscal year 2024, with recurring and other revenue at $1,471.8 million, reflecting a 15% growth [6][10] - GAAP net income for Q4 2025 was $48.6 million, or $0.86 per share, compared to $48.8 million, or $0.86 per share in Q4 2024 [7][10] - For fiscal year 2025, GAAP net income increased to $227.1 million, or $4.02 per share, from $206.8 million, or $3.63 per share in fiscal year 2024 [10][6] Operational Highlights - The company launched "Paylocity for Finance," integrating finance and HR teams through a unified system, enhancing operational efficiency and user experience [2][5] - Paylocity repurchased approximately 800,000 shares of its stock for $150 million during fiscal year 2025 and increased share repurchase authorization by $500 million [5][6] Adjusted Metrics - Adjusted EBITDA for fiscal year 2025 was $583.0 million, a 15% increase from $505.6 million in fiscal year 2024, representing 36.5% of total revenue [6][14] - Free cash flow for fiscal year 2025 was $342.8 million, or 21.5% of total revenue, compared to $305.9 million, or 21.8% of total revenue in fiscal year 2024 [21] Guidance - For Q1 2026, recurring and other revenue is expected to be between $370.0 million and $375.0 million, indicating approximately 12% growth over Q1 2025 [22] - Total revenue for Q1 2026 is projected to be between $397.5 million and $402.5 million, representing about 10% growth over Q1 2025 [22] - For fiscal year 2026, recurring and other revenue is expected to be in the range of $1.597 billion to $1.612 billion, reflecting approximately 9% growth over fiscal year 2025 [22]

Core Viewpoint - Paylocity (PCTY) is anticipated to report a year-over-year decline in earnings despite an increase in revenues for the quarter ended June 2025, with the consensus outlook indicating a significant factor that could influence its near-term stock price [1][2]. Financial Expectations - The upcoming earnings report is expected to show quarterly earnings of $1.38 per share, reflecting a year-over-year decrease of 6.8%, while revenues are projected to reach $388.7 million, an increase of 8.8% from the previous year [3]. - The consensus EPS estimate has been revised 1.84% higher in the last 30 days, indicating a reassessment by analysts regarding the company's earnings prospects [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates a positive Earnings ESP of +4.45% for Paylocity, suggesting that analysts have recently become more optimistic about the company's earnings [12]. - However, the stock holds a Zacks Rank of 4, which complicates the prediction of an earnings beat [12]. Historical Performance - In the last reported quarter, Paylocity exceeded the expected earnings of $2.09 per share by delivering $2.43, resulting in a surprise of +16.27% [13]. - Over the past four quarters, the company has consistently beaten consensus EPS estimates [14]. Industry Comparison - Palantir Technologies Inc. (PLTR), another player in the Zacks Internet - Software industry, is expected to report earnings per share of $0.14 for the same quarter, marking a year-over-year increase of 55.6%, with revenues projected at $938.33 million, up 38.4% from the previous year [18][19].

Core Insights - Paylocity has launched "Paylocity for Finance," expanding its platform to unify HR and finance through a single system of record [1][7] - The integration of Airbase enhances the platform by automating finance operations and providing real-time visibility and control [2][6] - The new suite includes five core modules aimed at improving spend management and strategic planning [5] Product Features - Paylocity for Finance automates critical business processes, reduces manual work, and utilizes AI-powered solutions to connect HR and finance [3][7] - The platform integrates with major ERP and general ledger systems, enabling faster month-end close and tighter financial control [6] - Key features include AP Automation, Expense Management, Corporate Cards, Guided Procurement, and Headcount Planning [8][9] Market Position - Forrester's report highlights the evolution of HCM platforms, indicating that spend management is now an essential part of the traditional HCM model [4] - Paylocity is recognized for its innovative approach to simplifying work and enhancing user experience, which is expected to drive increased adoption [7][10]

Core Viewpoint - Paylocity Holding Corporation has scheduled a conference call to discuss its fourth quarter and fiscal 2025 results on August 5, 2025, at 4:00 pm Central Time [1] Group 1: Company Overview - Paylocity is a leading provider of cloud-based HR, payroll, and spend management software solutions, headquartered in Schaumburg, IL [3] - The company was founded in 1997 and has been publicly traded since 2014 [3] - Paylocity is recognized for its unique culture and is consistently rated as one of the best places to work [3] Group 2: Conference Call Details - A live webcast of the conference call will be available on the "Investor Relations" page of the company's website [2] - Dial-in details for accessing the call by phone will be provided through a specific link [2] - A replay of the call will be archived via webcast on the company's website [2] - A press release highlighting the company's results will be issued prior to the conference call and will be accessible in the investor relations section [2]

Group 1: Labor Market Overview - The U.S. job market exceeded expectations for the 11th consecutive month, with 147,000 jobs added in June compared to the forecast of 110,000 [1] - The unemployment rate decreased from 4.2% to 4.1%, better than the expected 4.3% [1] - Average hourly earnings increased by 0.2% month-over-month and 3.7% year-over-year [1] Group 2: Payroll Stocks Performance - Paylocity Holding Corporation (PCTY) and Dayforce (DAY) saw stock increases of over +2% and +1% respectively, both classified as Zacks Rank 3 (Hold) [2] - Paychex (PAYX) is noted for its integrated Human Capital Management (HCM) solutions and has a Zacks Rank 2 (Buy), with expectations for steady growth in top and bottom lines [3] - Maximus (MMS) is identified as a strong buy with a Zacks Rank 1 (Strong Buy), despite a 21% decline from its 52-week high, attributed to a spike in FY25 EPS estimates by 7% [5] Group 3: Market Reactions and Economic Implications - The dip in Maximus stock followed the announcement of 7,000 federal government job cuts, but this may be an overreaction given the addition of 47,000 state government jobs and 19,000 social assistance jobs [6] - The resilient labor market and better-than-expected jobs report contribute positively to the stock market's recovery, making payroll stocks particularly attractive [8]