Paylocity Announces Second Quarter Fiscal Year 2025 Financial Results

Q2 2025 Recurring & Other Revenue of $347.7 million, up 17% year-over-yearQ2 2025 Total Revenue of $377.0 million, up 16% year-over-year SCHAUMBURG, Ill., Feb. 06, 2025 (GLOBE NEWSWIRE) -- Paylocity Holding Corporation (Nasdaq: PCTY), a leading provider of cloud-based HR, payroll, and spend management software solutions, today announced financial results for the second quarter of fiscal year 2025, which ended December 31, 2024. “The momentum we saw in Q1 continued into the second quarter of fiscal 25, resulting in very strong results, solid selling season performance, and increased revenue and profitability guidance for fiscal 25. Second quarter recurring & other revenue growth was 17%, primarily driven by strong sales and operational execution, continued product differentiation, and a stable macroeconomic environment. Our sustained investment in R&D continues to drive differentiation and expanded average revenue per client, with the recent launch of Benefits Decision Support and Headcount Planning increasing our max PEPY to $600, achieving the target we set in August 2023. I would also like to thank all of our Paylocity teams as they support our clients through our busiest time of year,” said Toby Williams, President and Chief Executive Officer of Paylocity. Second Quarter Fiscal 2025 Financial Highlights Revenue: Total revenue was $377.0 million, an increase of 16% from the second quarter of fiscal year 2024.Recurring & other revenue was $347.7 million, an increase of 17% from the second quarter of fiscal year 2024. Operating Income: GAAP operating income was $46.6 million and non-GAAP operating income was $101.1 million in the second quarter of fiscal year 2025 compared to GAAP operating income of $49.7 million and non-GAAP operating income of $92.8 million in the second quarter of fiscal year 2024. Net Income: GAAP net income was $37.5 million or $0.66 per share in the second quarter of fiscal year 2025 based on 56.7 million diluted weighted average common shares outstanding compared to $38.1 million or $0.67 per share in the second quarter of fiscal year 2024 based on 56.9 million diluted weighted average common shares outstanding. Adjusted EBITDA: Adjusted EBITDA, a non-GAAP measure, was $126.2 million in the second quarter of fiscal year 2025 compared to $112.6 million in the second quarter of fiscal year 2024.Adjusted EBITDA excluding interest income on funds held for clients, a non-GAAP measure, was $96.9 million in the second quarter of fiscal year 2025 as compared to $84.7 million in the second quarter of fiscal year 2024. Balance Sheet and Cash Flow: Cash and cash equivalents totaled $482.4 million as of December 31, 2024.Long-term debt totaled $325.0 million as of December 31, 2024, representing borrowings under our credit facility to fund the acquisition of Airbase on October 1, 2024.Cash flow from operations for the first six months of fiscal year 2025 was $145.7 million compared to $137.2 million for the first six months of fiscal year 2024. A reconciliation of GAAP to non-GAAP financial measures has been provided in this press release in the accompanying tables. Additional information regarding these measures can be found below under the headings “Non-GAAP Financial Measures” and “Definitions of our Non-GAAP Measures.” Business Outlook Based on information available as of February 6, 2025, Paylocity is issuing guidance for the third quarter and full fiscal year 2025 as indicated below. Third Quarter 2025: Recurring and other revenue is expected to be in the range of $410.0 million to $415.0 million, which represents approximately 12% growth over fiscal year 2024 third quarter recurring and other revenue.Total revenue is expected to be in the range of $439.0 million to $444.0 million, which represents approximately 10% growth over fiscal year 2024 third quarter total revenue.Adjusted EBITDA, a non-GAAP measure, is expected to be in the range of $171.0 million to $175.0 million.Adjusted EBITDA excluding interest income on funds held for clients, a non-GAAP measure, is expected to be in the range of $142.0 million to $146.0 million. Fiscal Year 2025: Recurring and other revenue is expected to be in the range of $1.445 billion to $1.455 billion, which represents approximately 13% growth over fiscal year 2024 recurring and other revenue.Total revenue is expected to be in the range of $1.558 billion to $1.568 billion, which represents approximately 11% growth over fiscal year 2024 total revenue.Adjusted EBITDA, a non-GAAP measure, is expected to be in the range of $542.0 million to $550.0 million.Adjusted EBITDA excluding interest income on funds held for clients, a non-GAAP measure, is expected to be in the range of $429.0 million to $437.0 million. We are unable to reconcile the forward-looking non-GAAP measures set forth above to their directly comparable GAAP financial measures because the information which is needed to complete a reconciliation is unavailable at this time without unreasonable effort. Conference Call Details Paylocity will host a conference call to discuss its second quarter fiscal year 2025 results at 4:30 p.m. Central Time today (5:30 p.m. Eastern Time). A live audio webcast of the conference call along with detailed financial information can be accessed through https://investors.paylocity.com/events-and-presentations where dial in details are provided. A replay of the call will be available and archived via webcast at https://investors.paylocity.com/. About Paylocity Paylocity is a leading provider of cloud-based HR, payroll, and spend management software solutions headquartered in Schaumburg, IL. Founded in 1997 and publicly traded since 2014, Paylocity offers an intuitive, easy-to-use product suite that helps businesses tackle today’s challenges while moving them toward the promise of tomorrow. Known for its unique culture and consistently recognized as one of the best places to work, Paylocity accompanies its clients on the journey to create great workplaces and help people achieve their best through automation, data-driven insights, and engagement. For more information, visit www.paylocity.com. Non-GAAP Financial MeasuresThe company uses certain non-GAAP financial measures when reporting and discussing its financial results, including the financial measures in this release that are designated as being “non-GAAP.” Management presents certain non-GAAP financial measures in this release because it considers them to be important supplemental measures of performance. Management uses non-GAAP financial measures for planning purposes, including analysis of the company's performance against prior periods, the preparation of operating budgets and to determine appropriate levels of operating and capital investments. Management believes that these non-GAAP financial measures provide additional insight for analysts and investors in evaluating the company's financial and operational performance. Non-GAAP financial measures have limitations as an analytical tool and other companies may define their non-GAAP financial measures differently than we do. Investors are encouraged to review the reconciliation of the non-GAAP measures to their most directly comparable GAAP measures provided in the accompanying tables to this release, as well as the definitions of those non-GAAP measures following such tables. Safe Harbor/Forward Looking StatementsThis press release contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, included herein regarding Paylocity’s future operations, future financial position and performance, anticipated results of operations, prospects, plans and objectives of management are forward-looking statements. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “will,” “would,” “seek” and similar expressions (or the negative of these terms) are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements include statements about management's estimates regarding future revenues and financial performance, and other statements about management’s beliefs, intentions or goals and are expressed in good faith and believed to be reasonable at the time such statements are made. Paylocity may not actually achieve the expectations disclosed in the forward-looking statements, and you should not place undue reliance on such statements. These forward-looking statements involve risks and uncertainties, many of which are beyond Paylocity’s control, that could cause actual results or events to differ materially from the expectations disclosed in the forward-looking statements. Factors that could cause actual results or events to differ materially from what is presented include, but are not limited to, the general economic conditions in regions in which Paylocity does business, changes in interest rates, business disruptions, reductions in employment and increases in business failures that have occurred or may occur in the future; Paylocity’s ability to leverage AI Assist and other forms of artificial intelligence and machine learning in its technology, which may be constrained by current and future laws, regulations, interpretive positions or standards governing new and evolving technologies and ethical considerations that could restrict or impose burdensome and costly requirements on its ability to continue to leverage data in innovative ways; Paylocity’s ability to retain existing clients and to attract new clients to enter into subscriptions for its services; the challenges associated with a growing company’s ability to effectively service clients in a dynamic and competitive market; challenges associated with expanding and evolving a sales organization to effectively address new geographies and products and services; challenges related to cybersecurity threats and evolving cybersecurity regulations; Paylocity’s reliance on and ability to expand its referral network of third parties; Paylocity’s reliance on third party payroll partners in foreign jurisdictions in its Blue Marble business; difficulties associated with accurately forecasting revenue and appropriately planning expenses; challenges with managing growth effectively; risks related to acquisitions and investments in other businesses and technologies; risks related to regulatory, legislative and judicial uncertainty in Paylocity’s markets; Paylocity’s ability to protect and defend its intellectual property and its use of open source software in its products; the risk that Paylocity’s security measures are compromised or a threat actor gains unauthorized access to customer data; unexpected events in the market for Paylocity’s solutions; changes in the competitive environment in Paylocity’s industry and the markets in which it operates; adverse changes in general economic or market conditions; changes in the employment rates of Paylocity’s clients and the resultant impact on revenue; the possibility that Paylocity may be adversely affected by other economic, business, and/or competitive factors; and other risks and potential factors that could affect Paylocity’s business and financial results that are identified in Paylocity’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on August 2, 2024, as well as any revisions or supplements to the information in subsequent reports filed or furnished to the SEC. These forward-looking statements represent Paylocity’s expectations as of the date of this press release. Subsequent events may cause these expectations to change, and unless legally required, Paylocity disclaims any obligations to update or alter these forward-looking statements in the future, whether as a result of new information, future events or otherwise. PAYLOCITY HOLDING CORPORATIONUnaudited Consolidated Balance Sheets(in thousands, except per share data) June 30,2024 December 31,2024Assets Current assets: Cash and cash equivalents$401,811 $482,364 Accounts receivable, net 32,997 43,471 Deferred contract costs 97,859 106,891 Prepaid expenses and other 39,765 62,823 Total current assets before funds held for clients 572,432 695,549 Funds held for clients 2,952,060 3,541,707 Total current assets 3,524,492 4,237,256 Capitalized internal-use software, net 116,412 124,352 Property and equipment, net 60,640 55,905 Operating lease right-of-use assets 33,792 37,258 Intangible assets, net 28,291 103,566 Goodwill 108,937 342,949 Long-term deferred contract costs 348,003 366,180 Long‑term prepaid expenses and other 7,077 6,699 Deferred income tax assets 17,816 19,609 Total assets$4,245,460 $5,293,774 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable$8,638 $5,464 Accrued expenses 158,311 162,005 Total current liabilities before client fund obligations 166,949 167,469 Client fund obligations 2,950,411 3,538,149 Total current liabilities 3,117,360 3,705,618 Long-term debt — 325,000 Long-term operating lease liabilities 46,814 49,048 Other long-term liabilities 6,398 6,318 Deferred income tax liabilities 41,824 35,650 Total liabilities$3,212,396 $4,121,634 Stockholders’ equity: Preferred stock, $0.001 par value, 5,000 authorized, no shares issued and outstanding at June 30, 2024 and December 31, 2024$— $— Common stock, $0.001 par value, 155,000 shares authorized at June 30, 2024 and December 31, 2024; 55,514 shares issued and outstanding at June 30, 2024 and 55,884 shares issued and outstanding at December 31, 2024 56 56 Additional paid-in capital 360,488 411,373 Retained earnings 673,456 760,494 Accumulated other comprehensive income (loss) (936) 217 Total stockholders' equity$1,033,064 $1,172,140 Total liabilities and stockholders’ equity$4,245,460 $5,293,774 PAYLOCITY HOLDING CORPORATIONUnaudited Consolidated Statements of Operations and Comprehensive Income(in thousands, except per share data) Three Months EndedDecember 31, Six Months EndedDecember 31, 2023 2024 2023 2024 Revenues: Recurring and other revenue$298,416 $347,714 $590,101 $680,819 Interest income on funds held for clients 27,945 29,266 53,846 59,117 Total revenues 326,361 376,980 643,947 739,936 Cost of revenues 107,399 124,545 208,866 239,505 Gross profit 218,962 252,435 435,081 500,431 Operating expenses: Sales and marketing 79,777 93,133 160,180 181,564 Research and development 46,139 56,155 90,744 103,415 General and administrative 43,340 56,524 93,262 104,685 Total operating expenses 169,256 205,812 344,186 389,664 Operating income 49,706 46,623 90,895 110,767 Other income 3,800 193 7,025 4,935 Income before income taxes 53,506 46,816 97,920 115,702 Income tax expense 15,390 9,351 25,287 28,664 Net income$38,116 $37,465 $72,633 $87,038 Other comprehensive income (loss), net of tax 4,929 (5,658) 5,049 1,153 Comprehensive income$43,045 $31,807 $77,682 $88,191 Net income per share: Basic$0.68 $0.67 $1.29 $1.56 Diluted$0.67 $0.66 $1.28 $1.54 Weighted-average shares used in computing net income per share: Basic 56,244 55,826 56,140 55,733 Diluted 56,855 56,740 56,906 56,536 Stock-based compensation expense and employer payroll taxes related to stock releases and option exercises for each of the three and six months ended December 31 are included in the above line items: Three Months EndedDecember 31, Six Months EndedDecember 31, 2023 2024 2023 2024 Cost of revenues$5,639 $6,007 $11,241 $10,930 Sales and marketing 10,156 10,663 20,027 20,415 Research and development 11,565 11,861 22,435 22,172 General and administrative 16,502 16,379 32,135 27,053 Total stock-based compensation expense and employer payroll taxes related to stock releases and option exercises$43,862 $44,910 $85,838 $80,570 PAYLOCITY HOLDING CORPORATIONUnaudited Consolidated Statements of Cash Flows(in thousands) Six Months EndedDecember 31, 2023 2024 Cash flows from operating activities: Net income$72,633 $87,038 Adjustments to reconcile net income to net cash provided by operating activities: Stock-based compensation expense 82,213 77,206 Depreciation and amortization expense 35,501 47,212 Deferred income tax expense (benefit) 15,225 (126)Provision for credit losses 463 617 Net accretion of discounts on available-for-sale securities (2,683) (1,277)Other (3,870) 577 Changes in operating assets and liabilities: Accounts receivable (7,052) (4,144)Deferred contract costs (30,743) (25,861)Prepaid expenses and other (11,328) (20,266)Accounts payable 1,131 (4,327)Accrued expenses and other (14,278) (10,993)Net cash provided by operating activities 137,212 145,656 Cash flows from investing activities: Purchases of available-for-sale securities (164,815) (66,122)Proceeds from sales and maturities of available-for-sale securities 150,851 80,018 Capitalized internal-use software costs (29,483) (29,597)Purchases of property and equipment (6,142) (5,313)Acquisitions of businesses, net of cash and funds held for clients acquired (12,015) (278,001)Other investing activities (583) (1,951)Net cash used in investing activities (62,187) (300,966)Cash flows from financing activities: Net change in client fund obligations 642,416 545,384 Borrowings under credit facility — 325,000 Repurchases of common shares — (8,395)Proceeds from employee stock purchase plan 9,534 10,561 Taxes paid related to net share settlement of equity awards (35,390) (37,005)Other financing activities 13,356 (20)Net cash provided by financing activities 629,916 835,525 Net change in cash, cash equivalents and funds held for clients' cash and cash equivalents 704,941 680,215 Cash, cash equivalents and funds held for clients' cash and cash equivalents—beginning of period 2,421,312 2,845,669 Cash, cash equivalents and funds held for clients' cash and cash equivalents—end of period$3,126,253 $3,525,884 Supplemental Disclosure of Non-Cash Investing and Financing Activities Purchases of property and equipment and capitalized internal-use software, accrued but not paid$3,422 $471 Liabilities assumed for acquisitions$382 $55,730 Supplemental Disclosure of Cash Flow Information Cash paid for interest$247 $5,179 Cash paid for income taxes$25,561 $45,968 Reconciliation of cash, cash equivalents and funds held for clients' cash and cash equivalents to the Consolidated Balance Sheets Cash and cash equivalents$366,904 $482,364 Funds held for clients' cash and cash equivalents 2,759,349 3,043,520 Total cash, cash equivalents and funds held for clients' cash and cash equivalents$3,126,253 $3,525,884 Paylocity Holding CorporationReconciliation of GAAP to non-GAAP Financial Measures(In thousands except per share data) Three Months Ended December 31, Six Months EndedDecember 31, 2023 2024 2023 2024 Reconciliation from Gross profit to Adjusted gross profit: Gross profit$218,962 $252,435 $435,081 $500,431 Amortization of capitalized internal-use software costs 10,676 14,833 20,211 28,610 Amortization of certain acquired intangibles 1,853 4,749 3,707 6,813 Stock-based compensation expense and employer payroll taxes related to stock releases and option exercises 5,639 6,007 11,241 10,930 Other items (1) — 218 — 140 Adjusted gross profit$237,130 $278,242 $470,240 $546,924 Three Months Ended December 31, Six Months EndedDecember 31, 2023 2024 2023 2024 Reconciliation from Operating income to Non-GAAP Operating income: Operating income$49,706 $46,623 $90,895 $110,767 Stock-based compensation expense and employer payroll taxes related to stock releases and option exercises 43,862 44,910 85,838 80,570 Amortization of acquired intangibles 2,525 5,678 5,061 8,225 Other items (2) (3,328) 3,934 (2,143) 6,462 Non-GAAP Operating income$92,765 $101,145 $179,651 $206,024 Three Months Ended December 31, Six Months EndedDecember 31, 2023 2024 2023 2024 Reconciliation from Net income to Non-GAAP Net income: Net income$38,116 $37,465 $72,633 $87,038 Stock-based compensation expense and employer payroll taxes related to stock releases and option exercises 43,862 44,910 85,838 80,570 Amortization of acquired intangibles 2,525 5,678 5,061 8,225 Other items (2) (3,328) 3,934 (2,143) 6,462 Income tax effect on adjustments (3) 3,294 (5,976) 2,464 (2,668)Non-GAAP Net income$84,469 $86,011 $163,853 $179,627 Three Months Ended December 31, Six Months EndedDecember 31, 2023 2024 2023 2024 Calculation of Non-GAAP Net income per share: Non-GAAP Net income$84,469 $86,011 $163,853 $179,627 Diluted weighted-average number of common shares 56,855 56,740 56,906 56,536 Non-GAAP Net income per share$1.49 $1.52 $2.88 $3.18 Three Months Ended December 31, Six Months EndedDecember 31, 2023 2024 2023 2024 Reconciliation from Net income to Adjusted EBITDA and Adjusted EBITDA excluding interest income on funds held for clients Net income$38,116 $37,465 $72,633 $87,038 Interest expense 189 4,846 379 5,246 Income tax expense 15,390 9,351 25,287 28,664 Depreciation and amortization expense 18,380 25,660 35,501 47,212 EBITDA 72,075 77,322 133,800 168,160 Stock-based compensation expense and employer payroll taxes related to stock releases and option exercises 43,862 44,910 85,838 80,570 Other items (2) (3,328) 3,934 (2,143) 6,462 Adjusted EBITDA$112,609 $126,166 $217,495 $255,192 Interest income on funds held for clients (27,945) (29,266) (53,846) (59,117)Adjusted EBITDA excluding interest income on funds held for clients$84,664 $96,900 $163,649 $196,075 Three Months Ended December 31, Six Months EndedDecember 31, 2023 2024 2023 2024 Reconciliation of Non-GAAP sales and marketing: Sales and marketing$79,777 $93,133 $160,180 $181,564 Less: Stock-based compensation expense and employer payroll taxes related to stock releases and option exercises 10,156 10,663 20,027 20,415 Less: Other items (1) — 520 — 629 Non-GAAP sales and marketing$69,621 $81,950 $140,153 $160,520 Three Months Ended December 31, Six Months EndedDecember 31, 2023 2024 2023 2024 Reconciliation of Non-GAAP total research and development: Research and development$46,139 $56,155 $90,744 $103,415 Add: Capitalized internal-use software costs 15,290 14,387 29,483 29,597 Less: Stock-based compensation expense and employer payroll taxes related to stock releases and option exercises 11,565 11,861 22,435 22,172 Less: Other items (4) 138 890 360 1,011 Non-GAAP total research and development$49,726 $57,791 $97,432 $109,829 Three Months Ended December 31, Six Months EndedDecember 31, 2023 2024 2023 2024 Reconciliation of Non-GAAP general and administrative: General and administrative$43,340 $56,524 $93,262 $104,685 Less: Stock-based compensation expense and employer payroll taxes related to stock releases and option exercises 16,502 16,379 32,135 27,053 Less: Amortization of certain acquired intangibles 672 929 1,354 1,412 Less: Other items (5) (3,466) 2,306 (2,503) 4,682 Non-GAAP general and administrative$29,632 $36,910 $62,276 $71,538 Six Months EndedDecember 31, 2023 2024 Reconciliation of Free cash flow, Adjusted free cash flow and Adjusted free cash flow excluding interest income on funds held for clients: Net cash provided by operating activities$137,212 $145,656 Capitalized internal-use software costs (29,483) (29,597)Purchases of property and equipment (6,142) (5,313)Free cash flow$101,587 $110,746 Cash paid for other items (6) 2,017 5,073 Adjusted free cash flow$103,604 $115,819 Less: Interest income on funds held for clients (53,846) (59,117)Adjusted free cash flow excluding interest income on funds held for clients$49,758 $56,702 (1) Represents acquisition-related costs and severance cost adjustments related to certain roles that have been eliminated. We exclude one-off severance costs that we incur as part of the normal course of our business operations. (2) Represents acquisition and nonrecurring transaction-related costs, lease exit activity and severance costs related to certain roles that have been eliminated. We exclude one-off severance costs that we incur as part of the normal course of our business operations. (3) Includes the income tax effect on non-GAAP net income adjustments related to stock-based compensation expense and employer payroll taxes related to stock releases and option exercises, amortization of acquired intangibles and other items, which include acquisition and nonrecurring transaction-related costs, lease exit activity and severance costs related to certain roles that have been eliminated. We exclude one-off severance costs that we incur as part of the normal course of our business operations. (4) Represents acquisition and nonrecurring transaction-related costs. (5) Represents acquisition and nonrecurring transaction-related costs and lease exit activity. (6) Represents cash paid for acquisition and nonrecurring transaction-related costs and severance costs related to certain roles that have been eliminated. Definitions of our Non-GAAP Measures Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted EBITDA Excluding Interest Income on Funds Held for Clients, and Adjusted EBITDA Excluding Interest Income on Funds Held for Clients Margin Adjusted EBITDA is calculated as net income before interest expense, income tax expense, and depreciation and amortization expense, adjusted to eliminate stock-based compensation expense and employer payroll taxes related to stock releases and option exercises and other items as described above in this release. Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by total revenues. Adjusted EBITDA excluding interest income on funds held for clients is calculated in the same manner as Adjusted EBITDA and is further adjusted to eliminate interest income on funds held for clients. Adjusted EBITDA excluding interest income on funds held for clients margin is Adjusted EBITDA excluding interest income on funds held for clients divided by recurring and other revenue. Adjusted Gross Profit and Adjusted Gross Profit Margin Adjusted gross profit is adjusted to eliminate stock-based compensation expense and employer payroll taxes related to stock releases and option exercises, the amortization of capitalized internal-use software costs and certain acquired intangibles and other items as described above in this release. Adjusted gross profit margin is calculated as adjusted gross profit as described in the preceding sentence divided by total revenues. Non-GAAP Operating Income, Non-GAAP Net Income, and Non-GAAP Income Per Share Non-GAAP operating income is adjusted to eliminate stock-based compensation expense and employer payroll taxes related to stock releases and option exercises, the amortization of acquired intangibles and other items as described above in this release. Non-GAAP net income and non-GAAP net income per share are adjusted to eliminate stock-based compensation expense and employer payroll taxes related to stock releases and option exercises, the amortization of acquired intangibles and other items as described above in this release, including the income tax effect on these items. Non-GAAP Sales and Marketing Expense, Non-GAAP Sales and Marketing Expense Margin, Non-GAAP Total Research and Development, Non-GAAP Total Research and Development Margin, Non-GAAP General and Administrative Expense, and Non-GAAP General and Administrative Expense Margin Non-GAAP sales and marketing expense is adjusted to eliminate stock-based compensation expense and employer payroll taxes related to stock releases and option exercises and other items as described above in this release. Non-GAAP sales and marketing margin is calculated by dividing non-GAAP sales and marketing by total revenues. Non-GAAP total research and development is adjusted for capitalized internal-use software costs paid and to eliminate stock-based compensation expense and employer payroll taxes related to stock releases and option exercises and other items as described above in this release. Non-GAAP total research and development margin is calculated by dividing non-GAAP total research and development by total revenues. Non-GAAP general and administrative expense is adjusted to eliminate stock-based compensation expense and employer payroll taxes related to stock releases and option exercises, the amortization of certain acquired intangibles and other items as described above in this release. Non-GAAP general and administrative margin is calculated by dividing non-GAAP general and administrative expense by total revenues. Free Cash Flow, Free Cash Flow Margin, Adjusted Free Cash Flow, Adjusted Free Cash Margin, Adjusted Free Cash Flow Excluding Interest on Funds Held for Clients, and Adjusted Free Cash Flow Excluding Interest on Funds Held for Clients Margin Free cash flow is defined as net cash provided by operating activities less capitalized internal-use software costs and purchases of property and equipment. Free cash flow margin is calculated by dividing free cash flow by total revenues. Adjusted free cash flow is defined in the same manner as free cash flow plus cash paid for other items as described above in this release. Adjusted free cash flow margin is calculated by dividing free cash flow by total revenues. Adjusted free cash flow excluding interest income on funds held for clients is defined in the same manner as adjusted free cash flow but also excludes interest income on funds held for clients. Adjusted free cash flow margin excluding interest income on funds held for clients is calculated by dividing adjusted free cash flow excluding interest income on funds held for clients by recurring and other revenue.

Paylocity Announces Second Quarter Fiscal Year 2025 Financial Results

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