Core Insights - Paylocity's Airbase solution has been recognized as a Visionary in the 2025 Gartner Magic Quadrant for Accounts Payable Applications, highlighting its innovative approach in the market [1][2] - The recognition emphasizes Paylocity's understanding of market trends and its capability to meet the evolving needs of finance teams through advanced technology [2] Company Overview - Paylocity, headquartered in Schaumburg, IL, is a provider of cloud-based HR, payroll, and spend management software solutions, established in 1997 and publicly traded since 2014 [9] - The company is known for its user-friendly product suite that automates HR and payroll processes, enhancing employee engagement and workplace culture [9] Product Features - Airbase by Paylocity offers a unified finance automation platform that manages the entire spending lifecycle, enhancing visibility, control, and efficiency [3][10] - Key features include Procure-to-Pay (P2P) management, Accounts Payable (AP) automation, guided procurement, expense management, corporate card programs, and seamless integrations with ERP systems [10] Strategic Importance - The integration of Airbase with the Paylocity platform aims to streamline business spending processes, from pre-approvals to reconciliation, thereby optimizing financial operations [4] - The solution leverages machine learning and generative AI to reduce risks and empower organizations to scale effectively [3]

Core Insights - Paylocity's Airbase solution has been recognized as a Visionary in the 2025 Gartner Magic Quadrant for Accounts Payable Applications, highlighting its innovative approach in the market [1][2] - The recognition emphasizes Paylocity's understanding of market trends and its capability to meet the evolving needs of finance teams through advanced technology [2] Company Overview - Paylocity, headquartered in Schaumburg, IL, is a provider of cloud-based HR, payroll, and spend management software solutions, founded in 1997 and publicly traded since 2014 [9] - The company is known for its unique culture and has been consistently recognized as one of the best places to work, focusing on helping businesses automate HR and payroll processes [9] Product Features - Airbase by Paylocity offers a unified finance automation platform that enhances visibility, control, and efficiency across the entire spending lifecycle, from pre-approvals to reconciliation [3][4] - Key features include Procure-to-Pay (P2P) management, Accounts Payable (AP) automation, guided procurement, expense management, corporate cards, and seamless integrations with other business systems [10]

Core Insights - Paylocity's Airbase has been recognized as the 1 Expense Management Solution for SMEs in the Spend Matters Spring 2025 SolutionMap, emphasizing its commitment to providing top-tier expense management capabilities for businesses with revenues under $100 million [1][2] Company Overview - Paylocity, headquartered in Schaumburg, IL, is a cloud-based provider of HR, payroll, and spend management software solutions, founded in 1997 and publicly traded since 2014 [5] - The company is known for its user-friendly product suite that automates HR and payroll processes, helping businesses attract and retain talent while fostering a positive workplace culture [5] Product Features - Airbase by Paylocity utilizes a combination of rules, machine learning, and generative AI to automate expense management, significantly reducing the need for manual expense report creation [3] - The system captures, categorizes, and populates expense details in real-time, enhancing efficiency and reducing administrative burdens for SMEs [3] Market Context - The recognition from Spend Matters follows a comprehensive evaluation process, including technical assessments and product demonstrations, validating Airbase by Paylocity's leadership in modernizing expense management for SMEs [3] - The procurement and finance technology landscape is becoming increasingly complex, with higher stakes for tech investments as organizations seek rapid savings and ROI [4]

Core Insights - Paylocity (PCTY) is a US-based cloud payroll and human capital management (HCM) software provider that has been under observation since 2020 [1] Company Overview - Paylocity specializes in cloud-based payroll and HCM solutions, catering to businesses in need of efficient human resource management tools [1] Analyst's Position - The analyst has no current stock or derivative positions in Paylocity but may consider initiating a long position within the next 72 hours [1]

Core Insights - Paylocity Holding Corporation (PCTY) shares increased by 4.24% to $221.00 in after-hours trading following strong second-quarter fiscal 2025 results [1] Financial Performance - PCTY reported non-GAAP earnings of $1.52 per share, exceeding the Zacks Consensus Estimate by 9.35%, with a year-over-year increase of 2% driven by strong sales, efficient operations, and acquisitions [2] - Revenues rose 16% year over year to $377 million, surpassing the Zacks Consensus Estimate by 2.77%, with recurring and other revenues increasing by 16.5% to $347.7 million [3] - Adjusted gross profit was $278.2 million, up 17.3% year over year, with an adjusted gross margin of 73.8%, an increase of 110 basis points [4] Operational Metrics - Non-GAAP operating income increased by 9% year over year to $101.1 million, while the non-GAAP operating margin contracted by 160 basis points to 26.8% [4] - Adjusted EBITDA rose 12% from the previous year to $126.2 million, with an adjusted EBITDA margin of 33.5%, down 100 basis points [4] Balance Sheet & Cash Flow - As of December 31, 2024, cash and cash equivalents were $482.4 million, down from $778.5 million as of September 30, 2024, with long-term debt totaling $325 million due to borrowings for the acquisition of Airbase [5] - Cash flow from operations for the second quarter was $54.2 million, compared to $75.1 million in the prior year, with free cash flow at $41.9 million [6] Guidance - For Q3 fiscal 2025, PCTY expects total revenues between $439 million and $444 million, indicating a 10% growth year over year, with adjusted EBITDA projected at $171 million to $175 million [7] - For the full fiscal 2025, total revenues are projected between $1.558 billion and $1.568 billion, implying an 11% growth year over year, with adjusted EBITDA expected to be between $542 million and $555 million [8] Market Position - PCTY currently holds a Zacks Rank 2 (Buy), indicating positive market sentiment [9]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 ________________________________________________________________________ Form 10-Q ________________________________________________________________________ x Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended December 31, 2024 o Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to Comm ...

Financial Data and Key Metrics Changes - Recurring and other revenue for Q2 was $347.7 million, an increase of 17%, with total revenue of $377 million, up 16% from the same period last year [19][10] - Adjusted gross profit was 73.8% for Q2, compared to 72.7% in Q2 of the previous fiscal year, representing a 110 basis points improvement [20] - Adjusted EBITDA for Q2 was $126.2 million, or a 33.5% margin, exceeding the midpoint of guidance by $8.2 million [21] - Cash and cash equivalents at the end of the quarter were $482.4 million, with $325 million in debt related to the Airbase acquisition [22] Business Line Data and Key Metrics Changes - The launch of new products, including benefit decision support and integrated headcount planning, has increased the maximum revenue per employee (PEPY) from $550 to $600 [11] - The new AI assistant chatbot has seen a 30% increase in utilization since its launch in October, with key features reducing report search time by over 20% [12] Market Data and Key Metrics Changes - The broker referral network contributed over 25% of new business in Q2, driven by the modern platform and third-party integrations [15] - The average daily balance of client funds was approximately $2.8 billion in Q2, expected to rise to $3.2 billion in Q3 [22] Company Strategy and Development Direction - The company is focused on product innovation and expansion, with ongoing investments in R&D to enhance its platform for the modern workforce [20][11] - The integration of Airbase is seen as a strategic move to enhance the value proposition for clients, with plans for a unified platform over time [100][102] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to drive further product expansion and revenue growth, supported by a stable macroeconomic environment [14] - The company has raised its fiscal 2025 guidance due to strong sales performance and operational execution [25][27] Other Important Information - Paylocity was recognized in multiple awards, including Forbes' list of America's Most Trusted Companies and Fortune's Best Workplaces in Technology [18] - The company continues to utilize its share repurchase program, having repurchased approximately 40,000 shares in Q2 [24] Q&A Session Summary Question: How does the recent M&A activity in the market affect the broker channel? - Management believes that their strong relationships with brokers and the lack of competition in selling insurance products will allow them to capitalize on any disruptions caused by M&A activity [31][33] Question: Is there a renewed sense of optimism in the business? - Management confirmed a consistent optimistic approach towards growth and client service, indicating stability in the market [40][42] Question: What is the contribution of Airbase to revenue? - Airbase is expected to contribute roughly 1% of revenue this fiscal year, with the core business driving the larger guidance increase [56] Question: How is the company addressing the differences in market segments? - Management noted that while there are longer decision cycles in the upper market, stability has improved, and they are seeing gradual increases in attach rates for products [60][62] Question: What are the plans for integrating Airbase? - The integration will be a multi-year effort, with a focus on delivering a unified experience while also growing standalone revenue [102] Question: How is the labor market affecting business? - The macro environment has been stable, with modest upside expected in the first half of the fiscal year [112][113] Question: What is the outlook for gross margins? - Management is pleased with the expanded gross margins and is focused on balancing investments to drive efficiencies while maintaining service levels [115][118] Question: What is the level of client interest in Gen AI functionality? - There is strong client interest in the AI capabilities, with a focus on enhancing client satisfaction and efficiency [121][124]

Paylocity Holding Corporation (NASDAQ:PCTY) Q2 2025 Earnings Conference Call February 6, 2025 5:30 PM ET Company Participants Ryan Glenn - CFO Steve Beauchamp - Executive Chairman Toby Williams - President and CEO Conference Call Participants Brad Reback - Stifel Scott Berg - Needham & Company Samad Samana - Jefferies LLC Mark Marcon - Robert W. Baird Daniel Jester - BMO Capital Markets Austin Cole - Citizens JMP Siti Panigrahi - Mizuho Raimo Lenschow - Barclays Jared Levine - TD Cowen Terry Tillman - Truis ...

Group 1 - Paylocity Holding Corporation reported its earnings results for the second quarter of fiscal year 2025, which ended on December 31, 2024 [3] - The earnings call featured key company executives including Ryan Glenn (CFO), Steve Beauchamp (Executive Chairman), and Toby Williams (President and CEO) [3] - A webcast replay of the earnings call will be available for 45 days on the company's Investor Relations website [3] Group 2 - The conference call was initiated with a welcome message and instructions for participants, indicating that it was being recorded [2] - The call included a caution regarding forward-looking statements, highlighting that actual results may differ due to various factors and uncertainties [4][5]

Core Viewpoint - Paylocity (PCTY) reported quarterly earnings of $1.52 per share, exceeding the Zacks Consensus Estimate of $1.39 per share, and showing an increase from $1.49 per share a year ago [1][2] Financial Performance - The earnings surprise for the quarter was 9.35%, with the company previously expected to earn $1.39 per share but actually earning $1.66, resulting in a surprise of 19.42% [2] - Paylocity's revenues for the quarter ended December 2024 were $376.98 million, surpassing the Zacks Consensus Estimate by 2.77%, compared to $326.36 million in the same quarter last year [3] - The company has consistently exceeded consensus EPS and revenue estimates over the last four quarters [2][3] Stock Performance - Paylocity shares have increased approximately 4.8% since the beginning of the year, outperforming the S&P 500's gain of 3.1% [4] - The stock currently holds a Zacks Rank 2 (Buy), indicating expectations for it to outperform the market in the near future [7] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $2.04 on revenues of $434.29 million, and for the current fiscal year, it is $6.53 on revenues of $1.54 billion [8] - The Internet - Software industry, to which Paylocity belongs, is currently ranked in the top 30% of over 250 Zacks industries, suggesting a favorable outlook for the sector [9]