It has been about a month since the last earnings report for Paylocity (PCTY). Shares have added about 13.7% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Paylocity due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Paylocity Shares Rise on Q1 Earnings Beat & Strong FY25 View

Paylocity Holding Corporation shares gained 3.6% to close at $184.57 following impressive first-quarter fiscal 2025 results.

PCTY reported first-quarter fiscal 2025 non-GAAP earnings of $1.66 per share, beating the Zacks Consensus Estimate by 19.42%. The bottom line increased 18.6% year over year, driven by higher revenues and a rise in the operating income.

PCTY’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 18.26%.

Paylocity’s revenues rose 14.3% year over year to $363 million and surpassed the Zacks Consensus Estimate by 1.81%. 

The top-line growth can be attributed to a 14.2% increase in Recurring revenues (91.7% of the total revenues), which totaled $333 million. Moreover, the Interest Income on Funds Held for Clients (8.21% of total revenues) rose 15.4% year over year to $29.9 million.

Quarterly Details

Paylocity’s adjusted gross profit was $268.7 million, up 15.4% from the year-ago period. The adjusted gross margin expanded 66 basis points (bps) to 74.02%.

The non-GAAP operating income rose 17.2% year over year to $104.9 million. The non-GAAP operating margin expanded 153 bps to 28.9%.

Adjusted EBITDA jumped 22.97% from the year-ago quarter to $129 million. The adjusted EBITDA margin for the first quarter of fiscal 2025 expanded 251 bps to 35.5%.

Balance Sheet & Cash Flow Details

As of Sept. 30, 2024, Paylocity’s cash and cash equivalents were $778.5 million, which includes $325 million in proceeds from its credit facility compared with the previous quarter’s $401.8 million. Long-term debt totaled $325 million as of the first quarter of fiscal 2025.

Cash flow from operations for the first quarter of fiscal 2025 was $91.5 million compared with $62.1 million from the year-ago period. Free cash flow was $73.9 million for the first quarter of fiscal 2025.

PCTY Raises Q2 and Fiscal 2025 Guidance

For the second quarter of fiscal 2025, the company expects total revenues in the range of $364-$369 million, indicating 12% growth from the year-ago period. Adjusted EBITDA is projected in the range of $116-$120 million.

For fiscal 2025, Paylocity projects total revenues between $1.535 billion and $1.550 billion, implying 10% growth from the year-ago quarter. Adjusted EBITDA is expected in the range of $530-$540 million.