Paylocity Holding Corporation Reports 14% Revenue Growth and Strong Financial Performance in Q3 2024

Paylocity Holding Corporation reported significant financial growth for the three months ended September 30, 2024, compared to the same period in 2023. Total revenues increased by 14%, rising from $317.6 million to $363.0 million. This growth was primarily driven by a robust performance in recurring and other revenue, which rose from $291.7 million to $333.1 million. Gross profit also saw an increase, moving from $216.1 million to $248.0 million, while operating income surged from $41.2 million to $64.1 million. Net income for the period rose from $34.5 million to $49.6 million, resulting in an increase in net income per share from $0.62 to $0.89.

The company’s total assets decreased from $4.25 billion as of June 30, 2024, to $4.02 billion by September 30, 2024. However, cash and cash equivalents saw a substantial increase, climbing from $401.8 million to $778.5 million. Total current liabilities also decreased significantly from $3.12 billion to $2.50 billion, contributing to a reduction in total liabilities from $3.21 billion to $2.92 billion. Retained earnings increased from $673.5 million to $723.0 million, and total stockholders' equity rose from $1.03 billion to $1.11 billion.

Paylocity's operational expenses reflected strategic investments in growth. Sales and marketing expenses increased by 10% to $88.4 million, primarily due to additional employee-related costs. Research and development expenses rose by 6% to $47.3 million, driven by the hiring of additional development personnel. General and administrative expenses decreased by 4% to $48.2 million, attributed to a reduction in stock-based compensation expenses.

In terms of strategic developments, Paylocity completed the acquisition of TraceHQ.com, Inc. for $12.1 million on November 30, 2023, and subsequently acquired Airbase Inc. for $321.9 million on October 1, 2024, funded through borrowings under its revolving credit facility. As of September 30, 2024, the company had $325 million outstanding under this facility, which has a total capacity of $550 million, expandable to $825 million.

The effective tax rate for the quarter increased to 28.0% from 22.3% in the prior year, influenced by state and local income taxes. The company continues to focus on enhancing its product offerings and client experiences through increased investments in research and development and expanding its sales and marketing efforts.