Paylocity Holding Corporation (Nasdaq: PCTY), a cloud-based provider of payroll and human capital management software solutions, today announced financial results for the third quarter of fiscal year 2016, which ended March 31, 2016.

 

“We posted a strong quarter with revenue growth of 49%, driven by a combination of strong year-to-date sales performance combined with high penetration rates of our ACA Enhanced product in our existing client base,” said Steve Beauchamp, President and Chief Executive Officer of Paylocity. “The production of annual W-2 forms, coupled with the added complexity of year-end ACA form filing, resulted in increased client touch points in the quarter, and I was pleased with our ability to help navigate clients through this new regulation.”

 

Third Quarter Fiscal Year 2016 Financial Highlights

 

Revenue:

  • Total revenue was $70.6 million, an increase of 49% from the third quarter of fiscal year 2015.
  • Total recurring revenue was $67.1 million, representing 95% of total revenue and an increase of 53% from the third quarter of fiscal year 2015.

 

Adjusted EBITDA:

  • Adjusted EBITDA, a non-GAAP measure, was $14.6 million compared to Adjusted EBITDA of $7.5 million in the third quarter of fiscal year 2015.

 

Operating Income:

  • GAAP operating income was $6.2 million, compared to an operating income of $1.7 million in the third quarter of fiscal year 2015.

 

  • Non-GAAP operating income was $11.4 million, compared to a non-GAAP operating income of $5.6 million in the third quarter of fiscal year 2015.

 

Net Income:

  • GAAP net income was $6.2 million. This compares to a net income of $1.8 million for the third quarter of fiscal year 2015. Net income per share was $0.12 for the three months ended March 31, 2016 based on 53.4 million diluted weighted average common shares outstanding. Net income per share was $0.03 for the third quarter of fiscal year 2015 based on 52.2 million diluted weighted average common shares outstanding.

 

  • Non-GAAP net income was $11.3 million. This compares to non-GAAP net income of $5.6 million for the third quarter of fiscal year 2015. Non-GAAP net income per share was $0.21 for the three months ended March 31, 2016 based on 53.4 million diluted weighted average common shares outstanding. Non-GAAP net income per share was $0.11 for the third quarter of fiscal year 2015 based on 52.2 million diluted weighted average common shares outstanding.

 

Balance Sheet and Cash Flow:

Cash and cash equivalents totaled $89.7 million at the end of the quarter.

 

  • Cash flow from operations for the third quarter of fiscal year 2016 was $18.3 million compared to $9.4 million for the third quarter of fiscal year 2015.

 

A reconciliation of GAAP to non-GAAP financial measures has been provided in this press release, including the accompanying tables.  An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures.”

 

Business Outlook

 

Based on information available as of May 5, 2016, Paylocity is issuing guidance for the fourth quarter and full fiscal year 2016 as indicated below.

 

Fourth Quarter 2016:

  • Total revenue is expected to be in the range of $57.0 million to $58.0 million.
  • Adjusted EBITDA is expected to be in the range of $1.0 million to $2.0 million.
  • Non-GAAP net loss is expected to be in the range of ($2.7) million to ($1.7) million, or ($0.05) to ($0.03) per share, based on approximately 51 million basic and diluted weighted average common shares outstanding.

 

Fiscal Year 2016:

  • Total revenue is expected to be in the range of $227.9 million to $228.9 million.
  • Adjusted EBITDA is expected to be in the range of $26.1 million to $27.1 million.
  • Non-GAAP net income is expected to be in the range of $13.6 million to $14.6 million, or $0.25 to $0.27 per share, based on approximately 54 million diluted weighted average common shares outstanding.