Paylocity Q4 Earnings Beat Estimates, Revenues Increase Y/Y

Core Insights - Paylocity Holding Corporation (PCTY) reported fourth-quarter fiscal 2025 non-GAAP earnings of $1.56 per share, exceeding the Zacks Consensus Estimate by 13.04% and reflecting a year-over-year increase of 5.4% [1][8] - The company's revenues rose 12% year over year to $400.7 million, surpassing the Zacks Consensus Estimate by 3.10% [1][8] Revenue Breakdown - The top-line growth was driven by a 13.9% increase in Recurring and other revenues, which accounted for 92.3% of total revenues, reaching $369.9 million [2] - Interest income on funds held for clients, representing 7.7% of total revenues, declined 5.2% year over year to $30.9 million [2] Quarterly Financial Performance - Paylocity's adjusted gross profit was $296.7 million, up 14.2% from the previous year, with an adjusted gross margin expansion of 130 basis points to 74.1% [3] - Non-GAAP operating income increased 9.7% year over year to $105.6 million, while the non-GAAP operating margin contracted 60 basis points to 26.4% [3] - Adjusted EBITDA rose 8.8% from the year-ago quarter to $130.7 million, with an adjusted EBITDA margin down 100 basis points to 32.6% [3][8] Balance Sheet and Cash Flow - As of June 30, 2025, Paylocity's cash and cash equivalents were $398.1 million, down from $477.8 million as of March 31, 2025 [4] - Long-term debt totaled $162.5 million due to borrowings for the acquisition of Airbase, with approximately $162.5 million repaid during the second half of fiscal year 2025 [4] - Cash flow from operations for fiscal year 2025 was $418.2 million, compared to $331.7 million for the first nine months of the fiscal year [5] - Non-GAAP free cash flow was $342.8 million as of June 30, 2025, up from $278.5 million as of March 31, 2025 [5] Guidance - For the first quarter of fiscal 2026, Paylocity expects total revenues of $397.5-$402.5 million, indicating a 10% growth from the previous year [6] - For fiscal 2026, total revenues are projected between $1.707 billion and $1.722 billion, implying an 8% growth from the prior year [6]