Paylocity (PCTY) Second Quarter Earnings and Revenue Beat Estimates

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Paylocity Holding PCTY reported non-GAAP earnings for the second quarter of fiscal 2022 of 64 cents per share, beating Zacks’ consensus estimate of 41 cents. Net income improved 64.1% from quarterly earnings of 39 cents per share a year earlier.

Paylocity’s revenue rose 34% year-over-year to $196 million and topped Zacks’ consensus estimate of $187.9 million. The revenue growth can be attributed to a 34% increase in recurring revenue (99.5% of total revenue), which totaled $195 million. However, interest income on funds held for clients increased 6.4% to $1 million.

Quarterly details

Paylocity’s non-GAAP gross profit was $134.7 million, up 33.8% year-over-year. Non-GAAP gross margin contracted 10 basis points (bps) year over year to 68.7%.

Adjusted EBITDA increased 33.3% from the prior year quarter to $46.6 million. However, the adjusted EBITDA margin of 23.8% contracted by 10 basis points.

Non-GAAP operating profit increased to $36.6 million from $25.1 million a year earlier. Non-GAAP operating margin increased by 150 basis points to 18.7%.

Paylocity Holding Corporation Price, Consensus, and EPS Surprise

Paylocity Holding Corporation price-consensus-eps-surprise-chart | Quote from Paylocity Holding Corporation

Balance sheet and other details

Paylocity ended the fiscal second quarter with cash and cash equivalents of $84.1 million, compared to $66.4 million in the prior quarter. As of December 31, 2021, the company had no long-term debt.

During the second quarter of fiscal 2022, the company generated $31 million of cash from operating activities.

Outlook update

For the third fiscal quarter, Paylocity forecasts revenue of $239 million to $243 million, indicating growth of about 30% over the prior year period. Adjusted EBITDA is expected to be between $77 million and $80 million.

The company raised its guidance for fiscal 2022. It now expects revenue of $829 million to $834 million, suggesting growth of about 31% from fiscal 2021, compared to the previous year. previous estimate of $815-820 million.

Adjusted EBITDA is now expected in the range of $220-224 million compared to the previous estimate of $216-220 million for fiscal year 2022.

Zacks ranking and other key picks

Paylocity currently carries a Zacks Rank #2 (Buy).

Other top-ranked stocks in the broader IT and technology sector include iPhone maker Apple AAPL, sporting a Zacks Rank #1 (Strong Buy), Analog devices ADI and Axcelis Technologies ACLS, both wearing Zacks Rank #2. You can see the full list of today’s Zacks #1 Rank stocks here.

Zacks’ consensus estimate for Apple’s second-quarter fiscal 2022 earnings has been revised up 3.6% to $1.43 per share in the past seven days. For fiscal 2022, earnings estimates rose 5.9% to $6.15 per share in the past seven days.

Apple’s earnings have exceeded the Zacks consensus estimate in each of the previous four quarters, with the average surprise being 20.3%. AAPL stock has appreciated 25.9% over the past year.

Zacks’ consensus estimate for Analog Devices’ fiscal 2022 first-quarter earnings has been revised up a penny to $1.79 per share in the past 30 days. For fiscal 2022, earnings estimates have moved north 7 cents to $7.53 per share in the past 30 days.

Earnings for Analog Devices have exceeded the Zacks consensus estimate in each of the previous four quarters, with the average surprise being 6.1%. ADI shares have gained 7.6% over the past year.

Zacks’ consensus estimate for Axcelis Technologies’ fourth-quarter 2021 earnings was revised up 16 cents to 84 cents per share over the past 90 days. For 2021, earnings estimates have moved north 8.5% to $2.67 per share in the past 90 days.

Axcelis’ earnings have exceeded the Zacks consensus estimate in each of the previous four quarters, with the average surprise being 24.1%. ACLS shares are up 63.8% over the past year.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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