Paylocity Holding Corporation has recently released its 10-Q report, revealing a 15% year-over-year increase in total revenues from $643.9 million for the six months ended December 31, 2023, to $739.9 million for the six months ended December 31, 2024. The company, founded in 1997 and headquartered in Schaumburg, Illinois, offers cloud-based human capital management, payroll, and spend management software solutions for businesses across various industries, such as business services, healthcare, and technology.
According to the 10-Q report, Paylocity's recurring revenue model and high annual revenue retention rates provide significant visibility into its future operating results and cash flow from operations. Recurring and other revenue accounted for 91% and 92% of its total revenues for the three months ended December 31, 2023 and 2024, respectively, and 92% for both the six months ended December 31, 2023 and 2024. The company's total revenues increased by 16% year-over-year, driven by the strong performance of its sales team.
The report also highlights the company's key metrics, including Adjusted Gross Profit and Adjusted EBITDA. Paylocity disclosed Adjusted Gross Profit of $278.2 million for the three months ended December 31, 2024, compared to $237.1 million for the same period in 2023. Additionally, the company reported Adjusted EBITDA of $126.2 million for the three months ended December 31, 2024, up from $112.6 million for the same period in 2023.
Moreover, the 10-Q report details the company's basis of presentation, including its recurring and other revenue, interest income on funds held for clients, cost of revenues, and operating expenses. Paylocity expects its cost of revenues to increase in absolute dollars for the foreseeable future as it expands its client base, but it anticipates realizing cost efficiencies over the long term as its business scales, leading to improved operating leverage and increased margins.
The report also emphasizes Paylocity's commitment to growing its business by increasing its number of clients and revenue over the long term. The company plans to achieve this by investing in its sales and marketing organization across new and existing geographic territories, as well as by enhancing and expanding the number of solutions it offers to advance its platform.
As a result of these announcements, the company's shares have moved -1.6% on the market, and are now trading at a price of $208.66. For more information, read the company's full 10-Q submission here.
