Paylocity Holding(PCTY) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS Presents Paylocity's unaudited consolidated financial statements and accounting notes for periods ended December 31, 2024 Unaudited Consolidated Balance Sheets Provides a snapshot of Paylocity's financial position, detailing assets, liabilities, and equity as of December 31, 2024 Unaudited Consolidated Balance Sheets (in thousands) | Metric | June 30, 2024 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | % Change | | :-------------------------------- | :----------------------------- | :------------------------------- | :-------------------- | :------- | | Cash and cash equivalents | $401,811 | $482,364 | $80,553 | 20.05% | | Funds held for clients | $2,952,060 | $3,541,707 | $589,647 | 19.97% | | Total assets | $4,245,460 | $5,293,774 | $1,048,314 | 24.70% | | Total current liabilities | $3,117,360 | $3,705,618 | $588,258 | 18.87% | | Long-term debt | — | $325,000 | $325,000 | N/A | | Total liabilities | $3,212,396 | $4,121,634 | $909,238 | 28.30% | | Total stockholders' equity | $1,033,064 | $1,172,140 | $139,076 | 13.46% | - Total assets increased by 24.70% from June 30, 2024, to December 31, 2024, primarily driven by a significant increase in funds held for clients and cash and cash equivalents[10] - The company incurred $325 million in long-term debt by December 31, 2024, which was not present on June 30, 2024, contributing to a 28.30% increase in total liabilities[10] Unaudited Consolidated Statements of Operations and Comprehensive Income Details Paylocity's financial performance, including revenues, expenses, and net income for the periods ended December 31, 2024 Unaudited Consolidated Statements of Operations and Comprehensive Income (in thousands) | Metric (in thousands) | Three Months Ended Dec 31, 2023 | Three Months Ended Dec 31, 2024 | Change ($) | Change (%) | | :-------------------- | :------------------------------ | :------------------------------ | :--------- | :--------- | | Total revenues | $326,361 | $376,980 | $50,619 | 15.51% | | Gross profit | $218,962 | $252,435 | $33,473 | 15.29% | | Operating income | $49,706 | $46,623 | $(3,083) | -6.20% | | Net income | $38,116 | $37,465 | $(651) | -1.71% | | Basic EPS | $0.68 | $0.67 | $(0.01) | -1.47% | | Diluted EPS | $0.67 | $0.66 | $(0.01) | -1.49% | | Metric (in thousands) | Six Months Ended Dec 31, 2023 | Six Months Ended Dec 31, 2024 | Change ($) | Change (%) | | :-------------------- | :---------------------------- | :---------------------------- | :--------- | :--------- | | Total revenues | $643,947 | $739,936 | $95,989 | 14.91% | | Gross profit | $435,081 | $500,431 | $65,350 | 15.02% | | Operating income | $90,895 | $110,767 | $19,872 | 21.86% | | Net income | $72,633 | $87,038 | $14,405 | 19.83% | | Basic EPS | $1.29 | $1.56 | $0.27 | 20.93% | | Diluted EPS | $1.28 | $1.54 | $0.26 | 20.31% | - For the three months ended December 31, 2024, total revenues increased by 15.51% year-over-year, but net income slightly decreased by 1.71% and diluted EPS by 1.49%[13] - For the six months ended December 31, 2024, total revenues grew by 14.91%, and net income increased by 19.83%, leading to a 20.31% rise in diluted EPS[13] Unaudited Consolidated Statement of Changes in Stockholders' Equity Outlines changes in Paylocity's equity components, including common stock, retained earnings, and comprehensive income, for the period Unaudited Consolidated Statement of Changes in Stockholders' Equity (in thousands) | Metric (in thousands) | June 30, 2024 | December 31, 2024 | Change ($) | Change (%) | | :-------------------- | :------------ | :---------------- | :--------- | :--------- | | Common Stock | $56 | $56 | $0 | 0.00% | | Additional Paid-in Capital | $360,488 | $411,373 | $50,885 | 14.12% | | Retained Earnings | $673,456 | $760,494 | $87,038 | 12.92% | | Accumulated Other Comprehensive Income (Loss) | $(936) | $217 | $1,153 | -123.18% | | Total Stockholders' Equity | $1,033,064 | $1,172,140 | $139,076 | 13.46% | - Total stockholders' equity increased by $139.1 million (13.46%) from June 30, 2024, to December 31, 2024, primarily due to increases in additional paid-in capital and retained earnings[16] - Additional paid-in capital increased by $50.9 million, reflecting stock-based compensation, stock options exercised, and employee stock purchase plan issuances, partially offset by net settlements for taxes and common share repurchases[16] Unaudited Consolidated Statements of Cash Flows Presents Paylocity's cash inflows and outflows from operating, investing, and financing activities for the periods ended December 31, 2024 Cash Flow Activity (in thousands) | Cash Flow Activity (in thousands) | Six Months Ended Dec 31, 2023 | Six Months Ended Dec 31, 2024 | Change ($) | Change (%) | | :-------------------------------- | :---------------------------- | :---------------------------- | :--------- | :--------- | | Net cash provided by operating activities | $137,212 | $145,656 | $8,444 | 6.15% | | Net cash used in investing activities | $(62,187) | $(300,966) | $(238,779) | 384.00% | | Net cash provided by financing activities | $629,916 | $835,525 | $205,609 | 32.64% | | Net change in cash, cash equivalents and funds held for clients' cash and cash equivalents | $704,941 | $680,215 | $(24,726) | -3.51% | - Net cash provided by operating activities increased by 6.15% to $145.7 million for the six months ended December 31, 2024, driven by improved operating results[18][144] - Net cash used in investing activities significantly increased by 384% to $301.0 million, primarily due to $266.0 million in additional amounts paid for business acquisitions, net of cash acquired[18][146] - Net cash provided by financing activities increased by 32.64% to $835.5 million, mainly due to $325.0 million in borrowings under the credit facility to fund the Airbase acquisition[18][147] Notes to the Unaudited Consolidated Financial Statements Provides detailed explanations of Paylocity's accounting policies, revenue recognition, business combinations, and other financial statement items (1) Organization and Description of Business Describes Paylocity's core business as a cloud-based HCM, payroll, and spend management software provider - Paylocity Holding Corporation provides cloud-based human capital management (HCM), payroll, and spend management software solutions, delivered via a Software-as-a-Service (SaaS) model[20] - The company's platform aims to help businesses attract and retain talent, build culture, and automate HR, payroll, and spend management processes[20] (2) Summary of Significant Accounting Policies Summarizes Paylocity's key accounting principles, including revenue recognition, income taxes, and recently issued accounting standards - The unaudited consolidated financial statements are prepared in accordance with U.S. GAAP and SEC interim financial reporting rules, including all normal recurring adjustments[21][23] - The company accounts for income taxes using the asset and liability method (ASC 740), recognizing deferred tax assets and liabilities for future tax consequences[24] - Recently issued accounting standards include ASU 2023-07 (Segment Reporting), ASU 2023-09 (Income Tax Disclosure), and ASU 2024-03 (Income Statement Expense Disaggregation), with the company evaluating their impact and not expecting early adoption for most[26][27][28] (3) Revenue Details Paylocity's revenue streams, primarily recurring service fees, and related deferred contract costs - Substantially all revenue is derived from recurring service fees for cloud-based payroll and HCM software solutions, generally recognized monthly based on a per-employee-per-month fee[30] Disaggregation of Revenue (in thousands) | Revenue Type | Three Months Ended Dec 31, 2023 | Three Months Ended Dec 31, 2024 | Six Months Ended Dec 31, 2023 | Six Months Ended Dec 31, 2024 | | :-------------------------- | :------------------------------ | :------------------------------ | :---------------------------- | :---------------------------- | | Recurring fees | $285,140 | $331,900 | $565,039 | $651,214 | | Implementation services and other | $13,276 | $15,814 | $25,062 | $29,605 | | Total revenues from contracts | $298,416 | $347,714 | $590,101 | $680,819 | - Deferred revenue related to nonrefundable upfront implementation fees increased from $26.2 million at December 31, 2023, to $28.6 million at December 31, 2024[33] Deferred Contract Costs (in thousands) | Cost Type | Beginning Balance (3M Dec 2024) | Capitalized Costs (3M Dec 2024) | Amortization (3M Dec 2024) | Ending Balance (3M Dec 2024) | | :---------------------- | :------------------------------ | :------------------------------ | :------------------------- | :--------------------------- | | Costs to obtain a new contract | $255,023 | $19,122 | $(14,979) | $259,166 | | Costs to fulfill a contract | $204,549 | $20,939 | $(11,583) | $213,905 | | Total | $459,572 | $40,061 | $(26,562) | $473,071 | (4) Business Combinations Outlines Paylocity's acquisitions of TraceHQ.com and Airbase Inc., including purchase price allocation and strategic rationale - On November 30, 2023, Paylocity acquired TraceHQ.com, Inc. for $12.086 million, expanding its headcount planning solution[40] - On October 1, 2024, Paylocity acquired Airbase Inc. for $320.355 million (net of cash acquired), funded by its credit facility, to integrate finance and spend management software solutions[41] Preliminary Purchase Price Allocation for Airbase Acquisition (in thousands) | Asset/Liability | Amount | | :---------------------- | :----- | | Cash and cash equivalents | $41,250 | | Funds held for clients | $42,354 | | Proprietary technology | $75,200 | | Client relationships | $3,800 | | Non-solicitation agreements | $2,400 | | Trade names | $2,100 | | Goodwill | $234,086 | | Other assets acquired | $16,145 | | Client fund obligations | $(42,354) | | Other liabilities assumed | $(13,376) | | Total | $361,605 | - Goodwill from both acquisitions, primarily attributable to assembled workforce and growth opportunities, is not deductible for income tax purposes[44] (5) Balance Sheet Information Provides detailed breakdowns of specific balance sheet items, including allowances, capitalized software, goodwill, and intangible assets Allowance for Credit Losses (in thousands) | Metric | Amount | | :-------------------------- | :----- | | Balance at June 30, 2024 | $2,375 | | Charged to expense | $617 | | Write-offs | $(535) | | Additions due to acquisition | $248 | | Balance at December 31, 2024 | $2,705 | Capitalized Internal-Use Software, Net (in thousands) | Metric | June 30, 2024 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Capitalized internal-use software | $324,269 | $360,819 | | Accumulated amortization | $(207,857) | $(236,467) | | Capitalized internal-use software, net | $116,412 | $124,352 | Goodwill and Intangible Assets (in thousands) | Metric | June 30, 2024 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Goodwill | $108,937 | $342,949 | | Intangible assets, net | $28,291 | $103,566 | - Goodwill increased significantly by $234.1 million due to the Airbase acquisition, reaching $342.9 million by December 31, 2024[49] (6) Cash and Cash Equivalents and Funds Held for Clients Details Paylocity's cash, cash equivalents, and client funds, including investment composition and credit impairment assessment Total Investments (in thousands) | Metric | June 30, 2024 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Cash and cash equivalents | $401,811 | $482,364 | | Funds held for clients | $2,952,060 | $3,541,707 | | Total investments | $3,353,871 | $4,024,071 | - All available-for-sale securities were included in Funds held for clients at both June 30, 2024, and December 31, 2024[52] - The company did not recognize any credit impairment losses on its securities portfolio during the reported periods, and all securities held an A-1 rating or better as of December 31, 2024[55] (7) Fair Value Measurement Explains Paylocity's fair value hierarchy for financial instruments, categorizing assets and liabilities by input observability - The company uses a three-level fair value hierarchy, prioritizing observable inputs[58][59] - Cash and cash equivalents, funds held for clients' cash and cash equivalents, accounts receivable, accounts payable, and client fund obligations are measured at fair value using Level 1 inputs[59] - Marketable securities classified as available-for-sale are recorded at fair value using Level 2 inputs obtained from an independent pricing service, with no Level 3 securities held[60] (8) Debt Describes Paylocity's senior secured revolving credit facility and outstanding borrowings used for acquisitions - The company maintains a senior secured revolving credit facility with a borrowing capacity of up to $550 million, expiring in August 2027[63] - During the six months ended December 31, 2024, the company borrowed $325 million under this facility to fund the Airbase Inc. acquisition, which remained outstanding[63] - Borrowings bear interest based on Term SOFR or an adjusted base rate plus an applicable margin, and the company was in compliance with all covenants as of December 31, 2024[65][66] (9) Stock-Based Compensation Details Paylocity's equity incentive plans and the associated stock-based compensation expense recognized - The company maintains a 2023 Equity Incentive Plan, which succeeded the 2014 Plan, allowing for grants of MSUs, PSUs, RSUs, and other equity incentives[67] Total Stock-Based Compensation Expense (in thousands) | Expense Category | Three Months Ended Dec 31, 2023 | Three Months Ended Dec 31, 2024 | Six Months Ended Dec 31, 2023 | Six Months Ended Dec 31, 2024 | | :-------------------------- | :------------------------------ | :------------------------------ | :---------------------------- | :---------------------------- | | Cost of revenues | $5,475 | $5,750 | $10,418 | $10,246 | | Sales and marketing | $10,043 | $10,457 | $19,268 | $19,798 | | Research and development | $11,313 | $11,412 | $21,071 | $20,905 | | General and administrative | $16,377 | $16,047 | $31,456 | $26,257 | | Total | $43,208 | $43,666 | $82,213 | $77,206 | - As of December 31, 2024, there was $172.6 million of total unrecognized compensation cost related to unvested RSUs, PSUs, and MSUs, expected to be recognized over a weighted average period of 1.7 years[75] (10) Litigation Addresses Paylocity's ongoing legal proceedings, including class action complaints, and management's assessment of their impact - The company is facing two potential class action complaints filed in November 2020 and September 2023, alleging violations of the Illinois Biometric Information Privacy Act[76] - Management believes the ultimate disposition of these and other ordinary course litigation matters will not have a material adverse effect on the company's financial position, results of operations, or liquidity[77] (11) Income Taxes Presents Paylocity's effective tax rates and factors influencing tax expense for the reported periods Effective Tax Rates | Period | Effective Tax Rate (2023) | Effective Tax Rate (2024) | | :-------------------------- | :------------------------ | :------------------------ | | Three Months Ended Dec 31 | 28.8% | 20.0% | | Six Months Ended Dec 31 | 25.8% | 24.8% | - The effective tax rate for the three months ended December 31, 2024, was lower than the federal statutory rate of 21% primarily due to excess tax benefit from stock-based compensation[79] (12) Net Income Per Share Details Paylocity's basic and diluted net income per share and weighted-average shares outstanding for the reported periods Net Income Per Share | Metric | Three Months Ended Dec 31, 2023 | Three Months Ended Dec 31, 2024 | Six Months Ended Dec 31, 2023 | Six Months Ended Dec 31, 2024 | | :-------------------------- | :------------------------------ | :------------------------------ | :---------------------------- | :---------------------------- | | Basic EPS | $0.68 | $0.67 | $1.29 | $1.56 |\ | Diluted EPS | $0.67 | $0.66 | $1.28 | $1.54 |\ | Basic Weighted-Average Shares | 56,244 | 55,826 | 56,140 | 55,733 |\ | Diluted Weighted-Average Shares | 56,855 | 56,740 | 56,906 | 56,536 | - For the three months ended December 31, 2024, both basic and diluted EPS slightly decreased by $0.01 compared to the prior year[81] - For the six months ended December 31, 2024, basic EPS increased by $0.27 and diluted EPS by $0.26, reflecting improved net income over the longer period[81] ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This section provides management's perspective on Paylocity's financial condition and results of operations, highlighting key business strategies, performance metrics, and a detailed comparison of financial results for the three and six months ended December 31, 2024, versus 2023. It also discusses liquidity, capital resources, and critical accounting policies Overview Introduces Paylocity's business model, strategic acquisitions, and future investment plans for growth - Paylocity is a leading cloud-based provider of human capital management (HCM), payroll, and spend management software solutions[83] - The company expanded its spend management capabilities through the acquisition of Airbase Inc. in October 2024, aiming to offer a unified platform for payroll and non-payroll spend[83] - Paylocity plans to continue investing in research and development, sales and marketing, and client service to grow its client base and expand product offerings[84][85][86] Key Metrics Highlights Paylocity's key financial performance indicators, including total revenue growth, adjusted gross profit, and Adjusted EBITDA Total Revenue Growth | Period | Total Revenues (2023) | Total Revenues (2024) | Year-over-Year Increase (%) | | :-------------------------- | :-------------------- | :-------------------- | :-------------------------- | | Three Months Ended Dec 31 | $326.4 million | $377.0 million | 16% | | Six Months Ended Dec 31 | $643.9 million | $739.9 million | 15% | - Revenue growth was driven by strong sales performance, though market and economic uncertainties may impact future growth[90] Adjusted Gross Profit (in thousands) | Metric | Three Months Ended Dec 31, 2023 | Three Months Ended Dec 31, 2024 | Six Months Ended Dec 31, 2023 | Six Months Ended Dec 31, 2024 | | :-------------------------- | :------------------------------ | :------------------------------ | :---------------------------- | :---------------------------- | | Gross profit | $218,962 | $252,435 | $435,081 | $500,431 | | Adjusted Gross Profit | $237,130 | $278,242 | $470,240 | $546,924 | Adjusted EBITDA (in thousands) | Metric | Three Months Ended Dec 31, 2023 | Three Months Ended Dec 31, 2024 | Six Months Ended Dec 31, 2023 | Six Months Ended Dec 31, 2024 | | :-------------------------- | :------------------------------ | :------------------------------ | :---------------------------- | :---------------------------- | | Net income | $38,116 | $37,465 | $72,633 | $87,038 | | Adjusted EBITDA | $112,609 | $126,166 | $217,495 | $255,192 | Basis of Presentation Explains the components of Paylocity's revenues and expenses, including recurring fees, interest income, and operating costs - Recurring and other revenue, comprising 91-92% of total revenues, is generated from ongoing subscriptions to cloud-based HCM and payroll software, recognized monthly[97][98] - Interest income on funds held for clients is earned from demand deposit accounts and investments in highly liquid marketable securities, prior to remittance for payroll and taxes[100] - Cost of revenues includes employee-related expenses for client support, payroll tax filing, distribution, computing, and amortization of acquired intangibles and capitalized internal-use software[101][102] - Operating expenses (Sales and Marketing, Research and Development, General and Administrative) are expected to increase in absolute dollars due to business growth but are anticipated to gain economies of scale over the long term[104][105][108] Results of Operations Analyzes Paylocity's consolidated financial performance, detailing revenue, gross profit, operating income, and net income changes Consolidated Statements of Operations Data (in thousands) | Metric | Three Months Ended Dec 31, 2023 | Three Months Ended Dec 31, 2024 | Six Months Ended Dec 31, 2023 | Six Months Ended Dec 31, 2024 | | :-------------------------- | :------------------------------ | :------------------------------ | :---------------------------- | :---------------------------- | | Total revenues | $326,361 | $376,980 | $643,947 | $739,936 | | Gross profit | $218,962 | $252,435 | $435,081 | $500,431 | | Operating income | $49,706 | $46,623 | $90,895 | $110,767 | | Net income | $38,116 | $37,465 | $72,633 | $87,038 | - For the three months ended December 31, 2024, recurring and other revenue increased by 17% to $347.7 million, and interest income on funds held for clients increased by 5% to $29.3 million[115][116] - Cost of revenues increased by 16% for the three months ended December 31, 2024, primarily due to employee-related costs, amortization of internal-use software, and processing costs, maintaining a consistent gross margin of 67%[117] - Operating expenses for the three months ended December 31, 2024, saw increases in Sales and Marketing (17%), Research and Development (22%), and General and Administrative (30%), mainly driven by additional employee-related costs and acquisition-related expenses[118][119][120] Quarterly Trends and Seasonality Discusses factors influencing Paylocity's quarterly operating results and typical seasonal impacts on revenue and client funds - Operating results fluctuate quarterly due to various factors, with historical results not necessarily indicative of future performance[133] - The fiscal third quarter (ending March 31) typically sees positive impacts on recurring revenue and interest income due to W-2 document preparation and increased collection of client funds for payroll taxes[134] Critical Accounting Policies and Estimates Affirms consistency of Paylocity's critical accounting policies and estimates with prior annual reports - The preparation of consolidated financial statements requires management to make estimates and assumptions that affect reported amounts, which may differ from actual results[135] - Critical accounting policies and estimates are consistent with those disclosed in the company's Annual Report on Form 10-K for the fiscal year ended June 30, 2024[136] Liquidity and Capital Resources Assesses Paylocity's ability to meet short-term and long-term obligations using cash, credit facilities, and operational cash flow - As of December 31, 2024, the company's primary liquidity source was $482.4 million in cash and cash equivalents, supplemented by a $550.0 million revolving credit facility[137] - The company borrowed $325.0 million under its credit facility in September 2024 to fund the Airbase Inc. acquisition[137] - Under a $500.0 million share repurchase program authorized in April 2024, the company repurchased 44 thousand shares for approximately $8.6 million during the six months ended December 31, 2024, with $341.4 million remaining authorized[138] - Management believes current cash, future cash flow from operations, and the credit facility will be sufficient to meet liquidity needs for the foreseeable future[143] Contractual Obligations and Commitments Outlines Paylocity's principal contractual obligations, including debt, operating leases, and purchase commitments - As of December 31, 2024, principal commitments included $325.0 million in revolving credit facility borrowings (not due in next 12 months), $66.8 million in operating lease obligations ($10.5 million due in next 12 months), and $70.9 million in purchase obligations ($44.8 million due in next 12 months)[148] Capital Expenditures Details Paylocity's investments in capital spending and internal-use software for business growth and infrastructure enhancement - Capital expenditures were $5.3 million for the six months ended December 31, 2024, exclusive of $29.6 million in capitalized internal-use software costs[149] - The company expects to continue investing in capital spending to grow its business and enhance operating facilities, data centers, and technical infrastructure[149] New Accounting Pronouncements Refers to Note 2 for details on recently issued accounting standards and their potential impact on Paylocity - Refer to Note 2 of the Notes to the Unaudited Consolidated Financial Statements for a discussion of recently issued accounting standards[150] ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK This section outlines Paylocity's exposure to market risks, primarily interest rate risk, and confirms the company's policy against using derivatives for mitigation or speculation. It details the potential impact of interest rate fluctuations on investments and variable-rate debt - The company is exposed to market risks, primarily interest rate fluctuations, but does not use derivatives for mitigation or speculation[152][153] - As of December 31, 2024, the company held $482.4 million in cash and cash equivalents and $3,541.7 million in funds held for clients, with investments in highly liquid, investment-grade marketable securities[154] - A hypothetical 100-basis point increase in interest rates would decrease the market value of available-for-sale securities by $10.8 million, while a decrease would increase it by the same amount[156] - The $325.0 million in outstanding borrowings under the credit facility are subject to variable interest rates, exposing the company to changes in underlying index rates[157] ITEM 4. CONTROLS AND PROCEDURES This section confirms the effectiveness of Paylocity's disclosure controls and procedures as of December 31, 2024, and states that there were no material changes in internal control over financial reporting during the quarter - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of December 31, 2024[160] - No material changes in internal control over financial reporting occurred during the three-month period ended December 31, 2024[161] PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS States Paylocity's involvement in ordinary course litigation, with no expected material adverse financial impact - The company is involved in ordinary course litigation but believes no current claims would materially adversely affect its financial position[164] ITEM 1A. RISK FACTORS Confirms no material changes to Paylocity's previously disclosed risk factors since the last annual report - No material changes to risk factors have occurred since the Annual Report on Form 10-K filed on August 2, 2024[165] ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS Details Paylocity's common stock repurchase activity under its authorized program during the quarter Purchases of Equity Securities (Three Months Ended December 31, 2024) | Period | Total Number of Shares Purchased | Average Price Paid per Share (1) | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2) | | :-------------------------- | :------------------------------- | :------------------------------- | :--------------------------------------------------------------------------------- | :----------------------------------------------------------------------------------------- | | October 1, 2024 - October 31, 2024 | — | — | — | — | | November 1, 2024 - November 30, 2024 | 18,980 | $195.30 | 18,980 | $346,293,384 | | December 1, 2024 - December 31, 2024 | 24,668 | $199.90 | 24,668 | $341,362,298 | | Total | 43,648 | | 43,648 | | - The company repurchased 43,648 shares of common stock during the three months ended December 31, 2024, under its $500 million Repurchase Program[168][169] - As of December 31, 2024, approximately $341.4 million remained authorized for repurchases under the program[168] ITEM 3. DEFAULTS UPON SENIOR SECURITIES Confirms no defaults upon senior securities occurred during the reporting period - There were no defaults upon senior securities[170] ITEM 4. MINE SAFETY DISCLOSURES States that mine safety disclosures are not applicable to Paylocity's operations - Mine safety disclosures are not applicable to the company[171] ITEM 5. OTHER INFORMATION Lists directors and officers who adopted Rule 10b5-1 trading arrangements for common stock sales Rule 10b5-1 Trading Arrangements Adopted (Three Months Ended December 31, 2024) | Name and Title | Total Shares of Common Stock to be Sold | Duration | Adoption Date | Expiration Date | | :-------------------------- | :-------------------------------------- | :------------------------------------ | :---------------- | :---------------- | | Steven R. Beauchamp (Executive Chairman) | 142,500 | February 14, 2025 - December 31, 2025 | November 15, 2024 | December 31, 2025 | | Ryan Glenn (Chief Financial Officer) | Up to 9,586 | February 19, 2025 - December 30, 2025 | November 20, 2024 | December 30, 2025 | | Nicholas Rost (VP Chief Accounting Officer and Treasurer) | Up to 3,537 | February 19, 2025 - February 20, 2026 | November 20, 2024 | February 20, 2026 | | Steven I. Sarowitz (Director) | 490,000 | March 18, 2025 - December 31, 2025 | December 17, 2024 | December 31, 2025 | | Joshua Scutt (Senior VP of Sales) | Up to 10,256 | March 13, 2025 - August 25, 2025 | December 12, 2024 | August 25, 2025 | - Several directors and officers adopted Rule 10b5-1 trading arrangements during the quarter, with sales scheduled from early 2025 through late 2026[172] - The number of shares to be sold for some individuals is based on pricing triggers and includes shares from outstanding equity awards, net of tax withholding obligations[173] ITEM 6. EXHIBITS Lists the exhibits filed with the Form 10-Q, including merger agreements, corporate governance documents, credit facility amendments, and certifications - Exhibits include the Agreement and Plan of Merger for Airbase Inc., Third Amended and Restated Certificate of Incorporation and Bylaws, Second Amendment to Credit Agreement, and CEO/CFO certifications[176] SIGNATURES Contains the required signatures for the Form 10-Q, certifying its submission by Paylocity's executive officers - The report was signed by Toby J. Williams, President, Chief Executive Officer, and Director, and Ryan Glenn, Chief Financial Officer, on February 7, 2025[179]