Paylocity Q4 Earnings Beat Estimates, Revenues Increase Y/Y

Paylocity Holding Corporation PCTY reported fourth-quarter fiscal 2025 non-GAAP earnings of $1.56 per share, beating the Zacks Consensus Estimate by 13.04%. The bottom line increased 5.4% year over year.

Paylocity’s revenues rose 12% year over year to $400.7 million and surpassed the Zacks Consensus Estimate by 3.10%.

Top-line growth can be attributed to a 13.9% increase in Recurring and other revenues (92.3% of the total revenues) to $369.9 million. However, Interest income on funds held for clients (7.7% of total revenues) declined 5.2% year over year to $30.9 million.

Quarterly Details of PCTY

Paylocity’s adjusted gross profit was $296.7 million, up 14.2% from the year-ago period. The adjusted gross margin expanded 130 basis points (bps) to 74.1%.

Paylocity Holding Corporation Price, Consensus and EPS Surprise

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

The non-GAAP operating income rose 9.7% year over year to $105.6 million. The non-GAAP operating margin contracted 60 bps to 26.4%.

Adjusted EBITDA rose 8.8% from the year-ago quarter to $130.7 million. The adjusted EBITDA margin for the fourth quarter of fiscal 2025 is down 100 bps to 32.6%.

Balance Sheet & Cash Flow Details

As of June 30, 2025, Paylocity’s cash and cash equivalents were $398.1 million compared with $477.8 million as of March 31, 2025.

Long-term debt totaled $162.5 million as of the fourth quarter of fiscal 2025 due to borrowings under a credit facility to fund the acquisition of Airbase on Oct. 1, 2024, which reflects approximately $162.5 million repaid on the outstanding balance during the second half of fiscal year 2025.

As of June 30, 2025, cash flow from operations for fiscal year 2025 was $418.2 million compared to cash flow from operations for the first nine months of fiscal year 2025, which was $331.7 million as of March 31, 2025.

Non-GAAP free cash flow was $342.8 million as of June 30, 2025, compared to $278.5 million as of March 31, 2025.

PCTY Initiates Q1 & FY26 Guidance

For the first quarter of fiscal 2026, the company expects total revenues of $397.5-$402.5 million, indicating 10% growth from the year-ago period’s actual. Adjusted EBITDA is projected to be in the range of $131-$135 million.

For fiscal 2026, Paylocity projects total revenues between $1.707 billion and $1.722 billion, implying 8% growth from the year-ago quarter’s actual. Adjusted EBITDA is expected to be between $608.5 million and $618.5 million.

PCTY’s Zacks Rank & Stocks to Consider

Currently, Paylocity carries a Zacks Rank #4 (Sell).

Vipshop VIPS, Microchip Technology MCHP and Netlist, Inc. NLST are some better-ranked stocks that investors can consider in the broader Zacks Computer and Technology sector. While Vipshop sports a Zacks Rank #1 (Strong Buy) at present, Microchip Technology and Netlist carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.

Vipshop shares have appreciated 14% year to date. VIPS is set to report its second-quarter 2025 results on Aug. 14.

Microchip Technology shares have gained 16.9% year to date. MCHP is slated to report its first-quarter fiscal 2026 results on Aug. 7.

Netlist shares have declined 16.3% year to date. NLST is scheduled to report its second-quarter 2025 results on Aug. 7.

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This article originally published on Zacks Investment Research (zacks.com).

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