Summary
Paylocity closed fiscal 2024 with fourth quarter total revenue of $357.3 million, up 15.8% from the prior-year quarter. Gross profit reached $240.4 million, up 13.5%. Gross margin slipped to 67.3%, down 1.4 percentage points. Operating income rose 27.5% to $62.9 million, and operating margin expanded to 17.6%, up 1.6 percentage points. Net income increased 31.0% to $48.8 million. For the full fiscal year, total revenue was $1.40 billion, up 19.4%. Full-year gross profit was $960.8 million, up 19.0%. Full-year operating income was $260.1 million, up 67.8%. Full-year net income was $206.8 million, up 46.8%. Diluted earnings per share for fiscal 2024 were $3.63, up 45.8%.
The cash flow picture was strong. Fourth quarter operating cash flow was $79.9 million, up 4.3% from the prior-year quarter. Full-year operating cash flow was $384.7 million, up 36.1%. Capital expenditures were $6.3 million in the fourth quarter, down 51.9%, and $18.0 million for the full year, down 17.7%. Free cash flow, a non-GAAP measure, was $305.9 million for fiscal 2024, up 42%. Adjusted EBITDA, another non-GAAP measure, was $120.2 million in the fourth quarter and $505.6 million for the fiscal year, up 35% from fiscal 2023. Non-GAAP operating income was $96.3 million in the fourth quarter. Deferred revenue ended the quarter at $24.9 million, up 10.0% from the prior-year quarter. Remaining performance obligations were $77.0 million, up 22.3%. Paylocity repurchased 1.1 million shares for $150.0 million during the fourth quarter. The board authorized a $500 million repurchase program, and $350.0 million remained available as of June 30, 2024.
Operationally, Paylocity ended fiscal 2024 with 39,050 clients, up 8% year over year. Average revenue per client grew 8%. Annual revenue retention remained in excess of 92%. The company said Learning Management, Recognition Rewards, and Employee Voice saw particular success. Management also highlighted its multi-year goal of $2 billion in total revenue. Leadership changes are coming: co-CEO Steve Beauchamp will transition to Executive Chairman on August 5, 2024, while Toby Williams will remain President and become sole CEO.
Management issued guidance for the first quarter and full fiscal year 2025. For the first quarter of fiscal 2025, total revenue is expected to be $353.5 million to $358.5 million, roughly 12.1% growth over the first quarter of fiscal 2024. Adjusted EBITDA for the first quarter is expected to be $116.5 million to $120.5 million. Adjusted EBITDA excluding interest income on funds held for clients is guided to $88.5 million to $92.5 million. For the full fiscal year 2025, total revenue guidance is $1.512 billion to $1.527 billion, about 8.3% growth. Adjusted EBITDA guidance for fiscal 2025 is $533.0 million to $543.0 million, and Adjusted EBITDA excluding interest income on funds held for clients is $426.0 million to $436.0 million. The company noted it cannot reconcile forward-looking non-GAAP guidance to GAAP without unreasonable effort.
Risks remain familiar. Paylocity cited general economic conditions, changes in interest rates, business disruptions, reductions in employment, and increases in business failures. It also flagged challenges in retaining and attracting clients, cybersecurity threats, regulatory uncertainty, competition, and the risk of elongated sales cycles or client losses. The company depends on client employee counts and a changing interest rate environment for parts of its revenue. Execution on its sales organization and product expansion will matter.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2024 | Q3 FY2024 | QoQ | Q4 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $357.3M | $401.3M | -11.0% | $308.5M | +15.8% |
| Gross profit | $240.4M | $285.3M | -15.7% | $211.7M | +13.5% |
| Gross margin | 67.3% | 71.1% | -3.8 pp | 68.7% | -1.4 pp |
| Research & development | $44.2M | $43.4M | +1.9% | $40.5M | +9.0% |
| Sales & marketing | $88.0M | $86.8M | +1.4% | $75.9M | +16.0% |
| General & administrative | $45.3M | $48.9M | -7.3% | $46.0M | -1.5% |
| Total operating expenses | $177.5M | $179.0M | -0.8% | $162.4M | +9.3% |
| Operating income (loss) | $62.9M | $106.3M | -40.8% | $49.4M | +27.5% |
| Operating margin | 17.6% | 26.5% | -8.9 pp | 16.0% | +1.6 pp |
| Net income (loss) | $48.8M | $85.3M | -42.8% | $37.3M | +31.0% |
| Net margin | 13.7% | 21.3% | -7.6 pp | 12.1% | +1.6 pp |
| Diluted EPS | $0.86 | $1.50 | -$0.64 | $0.66 | +$0.20 |
Risks
MD&A states uncertainties around market and economic conditions may impact revenue growth through fluctuations in client employee counts, elongated sales cycles, client losses, and a changing interest rate environment, which it has recently experienced and may continue to experience.
The filing warns that rapid technological advancements in AI and machine learning may produce HCM solutions that are lower priced, more efficient or more convenient, and that competitors may respond more quickly to AI or machine learning opportunities.
The HCM and payroll market is fragmented and highly competitive, with competitors including ADP, Dayforce, Paychex, Paycom, Paycor and UKG; larger competitors may offer price concessions or delayed payment terms to win clients.
The company has experienced cybersecurity attacks in the past and states that incorporating AI and machine learning into solutions may increase vulnerability to cyber risks, while third-party partners and suppliers add further exposure.
Changing tax, benefit, wage and hour, employment, money transmitter, AI, and data privacy laws could increase costs or restrict operations, with GDPR penalties of up to 4% of worldwide prior-year revenue cited.
New clients typically increase more in the third fiscal quarter ending March 31, causing total revenue and expenses to historically grow disproportionately in that quarter, making quarter-to-quarter comparisons not necessarily meaningful.
Payroll processing requires paying client employees and taxing authorities before ACH funds are finally settled; if client payments are rejected or fail to clear, the company may need additional short-term liquidity and operating results could be adversely affected.
The business depends on UPS for printed checks, major U.S. banks for ACH and wire transfers, and international business partners; a bank failure, termination, or systemic banking shutdown could impede funds processing or cause loss of client funds.
Success depends on senior management and key employees, and the company must attract and retain highly qualified product development, sales, implementation, and client service personnel; hiring is highly competitive across the United States and globally.
Growth in clients and revenue puts significant demands on the business, requires increased capital expenditures and operating expenses, and requires attracting, training, and retaining qualified personnel and expanding third-party service provider relationships.
In May 2024 the board approved a share repurchase program of up to $500 million; during fiscal 2024 the company repurchased 1.1 million shares for approximately $150.0 million at an average cost of $142.82, leaving about $350.0 million authorized, which may increase stock volatility and reduce cash available for other uses.
The company relies on data centers and third-party cloud hosting, and has experienced website disruptions, outages, and other performance problems; if it fails to manage technical operations infrastructure, clients may experience service outages subject to financial penalties and client losses.
The company may acquire businesses or technologies, which could divert management attention, result in dilutive equity issuances or debt, create integration difficulties, or lead to impairment charges if acquisitions do not yield expected returns.
As of July 26, 2024, directors and executive officers and their affiliates beneficially owned approximately 21.8% of outstanding common stock, allowing them to influence stockholder votes and potentially delay or prevent a change in control.
SaaS KPIs
All quarters →Adjusted EBITDA
Non-GAAP Operating Income
Adjusted EBITDA excluding interest income on funds held for clients
Annual Revenue Retention Rate
Total clients
Summary, forecast, risks and KPIs are extracted from Paylocity Holding Corp's SEC filings for Q4 FY2024 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.