• Paylocity Announces Second Quarter Fiscal Year 2023 Financial Results

    Источник: Nasdaq GlobeNewswire / 02 фев 2023 16:05:01   America/New_York

    • Q2 2023 Recurring & Other Revenue of $256.4 million, up 31% year-over-year
    • Q2 2023 Total Revenue of $273.0 million, up 39% year-over-year

    SCHAUMBURG, Ill., Feb. 02, 2023 (GLOBE NEWSWIRE) -- Paylocity Holding Corporation (Nasdaq: PCTY), a leading provider of cloud-based HCM and payroll software solutions, today announced financial results for the second quarter of fiscal year 2023, which ended December 31, 2022.

    "Our differentiated value proposition of providing the most modern software in the industry, coupled with continued strong sales execution, helped drive recurring and other revenue growth of 31% and total revenue growth of 39% in the second quarter. Our continued strong momentum is the result of ongoing investments in product innovation, including leveraging last year’s acquisition of Cloudsnap, a flexible, low-code solution for integrating disparate business applications. We have fully integrated Cloudsnap into the Paylocity suite and are leveraging this technology to provide the most modern software in the industry to accelerate the rollout of new integrations and use-cases to better serve our clients and their employees. Additionally, we continue to see strong attach rates in our modern workforce solutions, as clients realize the value in creating a unique employee experience and engaging culture for remote, hybrid and in-office teams,” said Steve Beauchamp, Co-Chief Executive Officer of Paylocity.

    Second Quarter Fiscal 2023 Financial Highlights

    Revenue:

    • Total revenue was $273.0 million, an increase of 39% from the second quarter of fiscal year 2022.
    • Recurring & other revenue was $256.4 million, an increase of 31% from the second quarter of fiscal year 2022.

    Operating Income:

    • GAAP operating income was $18.2 million and Non-GAAP operating income was $65.1 million in the second quarter of fiscal year 2023.

    Net Income:

    • GAAP net income was $15.6 million or $0.28 per share in the second quarter of fiscal year 2023 based on 56.5 million diluted weighted average common shares outstanding.

    Adjusted EBITDA:

    • Adjusted EBITDA, a non-GAAP measure, was $77.4 million in the second quarter of fiscal year 2023.

    Balance Sheet and Cash Flow:

    • Cash and cash equivalents totaled $120.1 million as of the second quarter of fiscal year 2023.
    • Cash flow from operations for the second quarter of fiscal year 2023 was $62.4 million.
    • As of December 31, 2022, Paylocity had no long-term debt and had not drawn on its credit facility.

    A reconciliation of GAAP to non-GAAP financial measures has been provided in this press release, including the accompanying tables. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures.”

    Business Outlook

    Based on information available as of February 2, 2023, Paylocity is issuing guidance for the third quarter and full fiscal year 2023 as indicated below.

    Third Quarter 2023:

    • Total revenue is expected to be in the range of $330.5 million to $334.5 million, which represents approximately 35% growth over fiscal 2022 third quarter total revenue.
    • Adjusted EBITDA, a non-GAAP measure, is expected to be in the range of $121.5 million to $124.5 million.

    Fiscal Year 2023:

    • Total revenue is expected to be in the range of $1.156 billion to $1.161 billion, which represents approximately 36% growth over fiscal year 2022 total revenue.
    • Adjusted EBITDA, a non-GAAP measure, is expected to be in the range of $358.5 million to $362.5 million.

    We are unable to reconcile forward-looking non-GAAP Adjusted EBITDA to its directly comparable GAAP financial measure because the information which is needed to complete a reconciliation is unavailable at this time without unreasonable effort.

    Conference Call Details
    Paylocity will host a conference call to discuss its second quarter fiscal year 2023 results at 4:30 p.m. Central Time today (5:30 p.m. Eastern Time). A live audio webcast of the conference call along with detailed financial information can be accessed through https://investors.paylocity.com/events-and-presentations where dial in details are provided. A replay of the call will be available and archived via webcast at https://investors.paylocity.com/.

    About Paylocity

    Paylocity is a leading provider of cloud-based HCM and payroll software solutions headquartered in Schaumburg, IL. Founded in 1997 and publicly traded since 2014, Paylocity offers an intuitive, easy-to-use product suite that helps businesses tackle today’s challenges while moving them toward the promise of tomorrow. Known for its unique culture and consistently recognized as one of the best places to work, Paylocity accompanies its clients on the journey to create great workplaces and help people achieve their best through automation, data-driven insights, and engagement. For more information, visit www.paylocity.com.

    Non-GAAP Financial Measures

    The company uses certain non-GAAP financial measures in this release, including Adjusted EBITDA, adjusted gross profit, non-GAAP operating income, non-GAAP net income, non-GAAP net income per share, non-GAAP sales and marketing, non-GAAP total research and development and non-GAAP general and administrative and free cash flow. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position or cash flow that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. We define Adjusted EBITDA as net income (loss) before interest expense, income tax expense (benefit), and depreciation and amortization expense, adjusted to eliminate stock-based compensation expense and employer payroll taxes related to stock releases and option exercises and other items as described later in this release. Adjusted gross profit is adjusted to eliminate stock-based compensation expense and employer payroll taxes related to stock releases and option exercises and amortization of capitalized internal-use software costs and certain acquired intangibles. Non-GAAP operating income is adjusted to eliminate stock-based compensation expense and employer payroll taxes related to stock releases and option exercises, the amortization of acquired intangibles and other items as described later in this release. Non-GAAP sales and marketing expense is adjusted to eliminate stock-based compensation expense and employer payroll taxes related to stock releases and option exercises and other items as described later in this release. Non-GAAP general and administrative expense is adjusted to eliminate stock-based compensation expense and employer payroll taxes related to stock releases and option exercises, the amortization of certain acquired intangibles and other items as described later in this release. Non-GAAP net income and non-GAAP net income per share are adjusted to eliminate stock-based compensation expense and employer payroll taxes related to stock releases and option exercises, the amortization of acquired intangibles and other items as described later in this release, including the income tax effect on these items. Non-GAAP total research and development is adjusted for capitalized internal-use software costs paid and to eliminate stock-based compensation expense and employer payroll taxes related to stock releases and option exercises and other items as described later in this release. Free cash flow is defined as net cash provided by operating activities less capitalized internal-use software costs, purchase of property and equipment and lease allowances used for tenant improvements. Please note that other companies may define their non-GAAP financial measures differently than we do. Management presents certain non-GAAP financial measures in this release because it considers them to be important supplemental measures of performance. Management uses these non-GAAP financial measures for planning purposes, including analysis of the company's performance against prior periods, the preparation of operating budgets and to determine appropriate levels of operating and capital investments. Management believes that these non-GAAP financial measures provide additional insight for analysts and investors in evaluating the company's financial and operational performance. Management also intends to provide these non-GAAP financial measures as part of the company’s future earnings discussions and, therefore, the inclusion of the non-GAAP financial measures should provide consistency in the company’s financial reporting. Non-GAAP financial measures have limitations as an analytical tool. Investors are encouraged to review the reconciliation of the non-GAAP measures to their most directly comparable GAAP measures provided in this release.

    Safe Harbor/Forward Looking Statements

    This press release contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, included herein regarding Paylocity’s future operations, ability to scale its business, future financial position and performance, future revenues, projected costs, prospects, plans and objectives of management are forward-looking statements. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “will,” “would,” “seek” and similar expressions (or the negative of these terms) are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements include, among other things, statements about management's estimates regarding future revenues and financial performance and other statements about management’s beliefs, intentions or goals. Paylocity may not actually achieve the expectations disclosed in the forward-looking statements, and you should not place undue reliance on Paylocity’s forward-looking statements. These forward-looking statements involve risks and uncertainties that could cause actual results or events to differ materially from the expectations disclosed in the forward-looking statements, including, but not limited to the general economic conditions in regions in which Paylocity does business, including the ongoing impact of the novel coronavirus disease (“COVID-19”) on the U.S. and the global economy, changes in interest rates, business disruptions, reductions in employment and an increase in business failures that have occurred or may occur in the future; the continuing impact of COVID-19 on Paylocity’s employees and clients; Paylocity’s ability to retain existing clients and to attract new clients to enter into subscriptions for its services; the challenges associated with a growing company’s ability to effectively service clients in a dynamic and competitive market; challenges associated with expanding and evolving a sales organization to effectively address new geographies and products and services; challenges related to cybersecurity threats and evolving cybersecurity regulations; Paylocity’s reliance on and ability to expand its referral network of third parties; Paylocity’s reliance on third party payroll partners in foreign jurisdictions in its Blue Marble business; difficulties associated with accurately forecasting revenue and appropriately planning expenses; challenges with managing growth effectively; risks related to regulatory, legislative and judicial uncertainty in Paylocity’s markets; Paylocity’s ability to protect and defend its intellectual property; the risk that Paylocity’s security measures are compromised or a threat actor gains unauthorized access to customer data; unexpected events in the market for Paylocity’s solutions; changes in the competitive environment in Paylocity’s industry and the markets in which it operates; adverse changes in general economic or market conditions; changes in the employment rates of Paylocity’s clients and the resultant impact on revenue; the possibility that Paylocity may be adversely affected by other economic, business, and/or competitive factors; and other risks and potential factors that could affect Paylocity’s business and financial results identified in Paylocity’s filings with the Securities and Exchange Commission (the “SEC”), including its 10-K filed with the SEC on August 5, 2022. Additional information will also be set forth in Paylocity’s future quarterly reports on Form 10-Q, annual reports on Form 10-K and other filings that Paylocity makes with the SEC. These forward-looking statements represent Paylocity’s expectations as of the date of this press release. Subsequent events may cause these expectations to change, and Paylocity disclaims any obligations to update or alter these forward-looking statements in the future, whether as a result of new information, future events or otherwise.


    PAYLOCITY HOLDING CORPORATION

    Unaudited Consolidated Balance Sheets
    (in thousands, except per share data)

     June 30,
    2022
     December 31,
    2022
    Assets   
    Current assets:   
    Cash and cash equivalents$139,756  $120,053 
    Accounts receivable, net 15,754   24,540 
    Deferred contract costs 59,501   68,557 
    Prepaid expenses and other 28,896   30,175 
    Total current assets before funds held for clients 243,907   243,325 
    Funds held for clients 3,987,776   3,065,697 
    Total current assets 4,231,683   3,309,022 
    Capitalized internal-use software, net 61,985   71,083 
    Property and equipment, net 62,839   59,506 
    Operating lease right-of-use assets 49,210   46,604 
    Intangible assets, net 45,475   39,934 
    Goodwill 101,949   102,054 
    Long-term deferred contract costs 229,067   262,313 
    Long‑term prepaid expenses and other 7,746   6,727 
    Deferred income tax assets 19,060   40,530 
    Total assets$4,809,014  $3,937,773 
        
    Liabilities and Stockholders’ Equity   
    Current liabilities:   
    Accounts payable$8,374  $7,611 
    Accrued expenses 124,384   115,795 
    Total current liabilities before client fund obligations 132,758   123,406 
    Client fund obligations 3,987,776   3,065,697 
    Total current liabilities 4,120,534   3,189,103 
    Long-term operating lease liabilities 69,119   65,353 
    Other long-term liabilities 3,681   3,333 
    Deferred income tax liabilities 2,217   2,217 
    Total liabilities$4,195,551  $3,260,006 
    Stockholders’ equity:   
    Preferred stock, $0.001 par value, 5,000 authorized, no shares issued and outstanding at June 30, 2022 and December 31, 2022$  $ 
    Common stock, $0.001 par value, 155,000 shares authorized at June 30, 2022 and December 31, 2022; 55,190 shares issued and outstanding at June 30, 2022 and 55,768 shares issued and outstanding at December 31, 2022 55   56 
    Additional paid-in capital 289,843   310,050 
    Retained earnings 325,868   371,820 
    Accumulated other comprehensive loss (2,303)  (4,159)
    Total stockholders' equity$613,463  $677,767 
    Total liabilities and stockholders’ equity$4,809,014  $3,937,773 



    PAYLOCITY HOLDING CORPORATION

    Unaudited Consolidated Statements of Operations and Comprehensive Income
    (in thousands, except per share data)

     Three Months Ended
    December 31,
     Six Months Ended
    December 31,
      2021   2022   2021   2022 
    Revenues:       
    Recurring and other revenue$195,041  $256,434  $375,865  $501,840 
    Interest income on funds held for clients 996   16,574   1,869   24,448 
    Total revenues 196,037   273,008   377,734   526,288 
    Cost of revenues 70,821   90,076   134,070   174,619 
    Gross profit 125,216   182,932   243,664   351,669 
    Operating expenses:       
    Sales and marketing 52,219   75,694   102,104   146,757 
    Research and development 25,278   41,029   48,354   81,122 
    General and administrative 39,581   48,001   74,816   98,493 
    Total operating expenses 117,078   164,724   225,274   326,372 
    Operating income 8,138   18,208   18,390   25,297 
    Other expense (372)  (5)  (489)  (168)
    Income before income taxes 7,766   18,203   17,901   25,129 
    Income tax expense (benefit) (2,087)  2,603   (22,884)  (20,823)
    Net income$9,853  $15,600  $40,785  $45,952 
    Other comprehensive income (loss), net of tax (335)  516   (410)  (1,856)
    Comprehensive income$9,518  $16,116  $40,375  $44,096 
            
    Net income per share:       
    Basic$0.18  $0.28  $0.74  $0.83 
    Diluted$0.17  $0.28  $0.72  $0.81 
            
    Weighted-average shares used in computing net income per share:       
    Basic 55,067   55,721   54,938   55,587 
    Diluted 56,468   56,474   56,486   56,559 

    Stock-based compensation expense and employer payroll taxes related to stock releases and option exercises for each of the three and six months ended December 31, are included in the above line items:

     Three Months Ended
    December 31,
     Six Months Ended
    December 31,
      2021  2022  2021  2022
    Cost of revenues$3,327 $5,310 $6,854 $10,355
    Sales and marketing 5,749  10,871  11,769  21,371
    Research and development 5,446  11,472  10,220  21,706
    General and administrative 11,948  16,328  21,383  35,527
    Total stock-based compensation expense and employer payroll taxes related to stock releases and option exercises$26,470 $43,981 $50,226 $88,959



    PAYLOCITY HOLDING CORPORATION

    Unaudited Consolidated Statements of Cash Flows
    (in thousands)

     Six Months Ended
    December 31,
      2021   2022 
    Cash flows from operating activities:   
    Net income$40,785  $45,952 
    Adjustments to reconcile net income to net cash provided by operating activities:   
    Stock-based compensation expense 45,802   83,364 
    Depreciation and amortization expense 23,383   29,094 
    Deferred income tax benefit (22,952)  (20,856)
    Provision for credit losses 103   602 
    Net accretion of discounts and amortization of premiums on available-for-sale securities 221   (2,039)
    Amortization of debt issuance costs 90   157 
    Other 247   1,253 
    Changes in operating assets and liabilities:   
    Accounts receivable (916)  (9,377)
    Deferred contract costs (26,786)  (40,638)
    Prepaid expenses and other (10,008)  616 
    Accounts payable 1,403   (392)
    Accrued expenses and other (24,514)  (8,979)
    Net cash provided by operating activities 26,858   78,757 
    Cash flows from investing activities:   
    Purchases of available-for-sale securities (190,000)  (296,060)
    Proceeds from sales and maturities of available-for-sale securities 60,391   190,253 
    Capitalized internal-use software costs (17,966)  (19,740)
    Purchases of property and equipment (10,528)  (6,663)
    Acquisitions of businesses, net of cash acquired (60,234)   
    Other investing activities    29 
    Net cash used in investing activities (218,337)  (132,181)
    Cash flows from financing activities:   
    Net change in client fund obligations 160,325   (922,079)
    Proceeds from employee stock purchase plan 7,216   8,450 
    Taxes paid related to net share settlement of equity awards (67,109)  (79,369)
    Payment of debt issuance costs (41)  (864)
    Net cash provided by (used in) financing activities 100,391   (993,862)
    Net change in cash, cash equivalents and funds held for clients' cash and cash equivalents (91,088)  (1,047,286)
    Cash, cash equivalents and funds held for clients' cash and cash equivalents—beginning of period 1,945,881   3,793,453 
    Cash, cash equivalents and funds held for clients' cash and cash equivalents—end of period$1,854,793  $2,746,167 
    Supplemental Disclosure of Non-Cash Investing and Financing Activities   
    Purchases of property and equipment, accrued but not paid$125  $ 
    Liabilities assumed for acquisitions$1,874  $117 
    Supplemental Disclosure of Cash Flow Information   
    Cash paid for interest$126  $157 
    Refunds received for income taxes$(115) $(158)
    Reconciliation of cash, cash equivalents and funds held for clients' cash and cash equivalents to the Consolidated Balance Sheets   
    Cash and cash equivalents$84,104  $120,053 
    Funds held for clients' cash and cash equivalents 1,770,689   2,626,114 
    Total cash, cash equivalents and funds held for clients' cash and cash equivalents$1,854,793  $2,746,167 



    Paylocity Holding Corporation

    Reconciliation of GAAP to non-GAAP Financial Measures
    (In thousands except per share data) 

     Three Months Ended
    December 31,
     Six Months Ended
    December 31,
      2021  2022  2021  2022
    Reconciliation from Gross profit to Adjusted gross profit:       
    Gross profit$125,216 $182,932 $243,664 $351,669
    Amortization of capitalized internal-use software costs 6,087  7,478  12,215  14,520
    Amortization of certain acquired intangibles   1,853    3,707
    Stock-based compensation expense and employer payroll taxes related to stock releases and option exercises 3,327  5,310  6,854  10,355
    Other items (1) 36    48  19
    Adjusted gross profit$134,666 $197,573 $262,781 $380,270


     Three Months Ended
    December 31,
     Six Months Ended
    December 31,
      2021  2022  2021  2022
    Reconciliation from Operating income to Non-GAAP Operating income:       
    Operating income$8,138 $18,208 $18,390 $25,297
    Stock-based compensation expense and employer payroll taxes related to stock releases and option exercises 26,470  43,981  50,226  88,959
    Amortization of acquired intangibles 2,000  2,770  3,352  5,541
    Other items (2)   151  803  416
    Non-GAAP Operating income$36,608 $65,110 $72,771 $120,213


     Three Months Ended
    December 31,
     Six Months Ended
    December 31,
      2021   2022  2021   2022 
    Reconciliation from Net income to Non-GAAP Net income:       
    Net income$9,853  $15,600 $40,785  $45,952 
    Stock-based compensation expense and employer payroll taxes related to stock releases and option exercises 26,470   43,981  50,226   88,959 
    Amortization of acquired intangibles 2,000   2,770  3,352   5,541 
    Other items (2) 208   151  1,011   416 
    Income tax effect on adjustments (3) (2,241)  496  (25,929)  (22,439)
    Non-GAAP Net income$36,290  $62,998 $69,445  $118,429 


     Three Months Ended
    December 31,
     Six Months Ended
    December 31,
      2021  2022  2021  2022
    Calculation of Non-GAAP Net income per share:       
    Non-GAAP Net income$36,290 $62,998 $69,445 $118,429
    Diluted weighted-average number of common shares 56,468  56,474  56,486  56,559
    Non-GAAP Net income per share$0.64 $1.12 $1.23 $2.09


     Three Months Ended
    December 31,
     Six Months Ended
    December 31,
      2021   2022  2021   2022 
    Reconciliation from Net income to Adjusted EBITDA:       
    Net income$9,853  $15,600 $40,785  $45,952 
    Interest expense 110   190  218   377 
    Income tax expense (benefit) (2,087)  2,603  (22,884)  (20,823)
    Depreciation and amortization expense 12,061   14,827  23,383   29,094 
    EBITDA 19,937   33,220  41,502   54,600 
    Stock-based compensation expense and employer payroll taxes related to stock releases and option exercises 26,470   43,981  50,226   88,959 
    Other items (2) 208   151  1,011   416 
    Adjusted EBITDA$46,615  $77,352 $92,739  $143,975 


     Three Months Ended
    December 31,
     Six Months Ended
    December 31,
      2021  2022  2021  2022
    Reconciliation of Non-GAAP sales and marketing:       
    Sales and marketing$52,219 $75,694 $102,104 $146,757
    Stock-based compensation expense and employer payroll taxes related to stock releases and option exercises 5,749  10,871  11,769  21,371
    Other items (1) 76    102  22
    Non-GAAP sales and marketing$46,394 $64,823 $90,233 $125,364


     Three Months Ended
    December 31,
     Six Months Ended
    December 31,
      2021  2022  2021  2022
    Reconciliation of Non-GAAP total research and development:       
    Research and development$25,278 $41,029 $48,354 $81,122
    Capitalized internal-use software costs 8,807  9,787  17,966  19,740
    Stock-based compensation expense and employer payroll taxes related to stock releases and option exercises 5,446  11,472  10,220  21,706
    Other items (1) 325  151  468  369
    Non-GAAP total research and development$28,314 $39,193 $55,632 $78,787


     Three Months Ended
    December 31,
     Six Months Ended
    December 31,
      2021   2022  2021  2022
    Reconciliation of Non-GAAP general and administrative:       
    General and administrative$39,581  $48,001 $74,816 $98,493
    Stock-based compensation expense and employer payroll taxes related to stock releases and option exercises 11,948   16,328  21,383  35,527
    Amortization of certain acquired intangibles 2,000   917  3,352  1,834
    Other items (2) (437)    185  6
    Non-GAAP general and administrative$26,070  $30,756 $49,896 $61,126

    (1) Represents certain nonrecurring acquisition-related costs.

    (2) Represents nonrecurring costs including acquisition-related costs and lease exit activity.

    (3) Includes the income tax effect on non-GAAP net income adjustments related to stock-based compensation expense and employer payroll taxes related to stock releases and option exercises, amortization of acquired intangibles and other items, which include acquisition-related costs and lease exit activity.

    Contact:
    Ryan Glenn
    investors@paylocity.com


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