Paylocity Announces Third Quarter Fiscal Year 2025 Financial Results

Q3 2025 Recurring & Other Revenue of $421.1 million, up 15% year-over-yearQ3 2025 Total Revenue of $454.5 million, up 13% year-over-year SCHAUMBURG, Ill., May 01, 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 third quarter of fiscal year 2025, which ended March 31, 2025. “Our solid results continued into the third quarter of fiscal 25, with recurring revenue growth of 15%, total revenue growth of 13% and increased revenue and profitability guidance for the fiscal year. We continue to see strong channel performance, as referrals, primarily from benefit brokers and financial advisors, once again represented more than 25% of new business for the third quarter, driven by our modern platform, third-party integrations and API capabilities. We remain committed to investing in and supporting the broker channel going forward – with the goal of continuing to deliver real value and true partnership and support to our referring brokers and clients. Additionally, we continue to return capital to shareholders with $150 million or approximately 800,000 shares repurchased through April of this fiscal year,” said Toby Williams, President and Chief Executive Officer of Paylocity. Third Quarter Fiscal 2025 Financial Highlights Revenue: Total revenue was $454.5 million, an increase of 13% from the third quarter of fiscal year 2024.Recurring & other revenue was $421.1 million, an increase of 15% from the third quarter of fiscal year 2024. Operating Income: GAAP operating income was $127.0 million and non-GAAP operating income was $172.7 million in the third quarter of fiscal year 2025 compared to GAAP operating income of $106.3 million and non-GAAP operating income of $145.9 million in the third quarter of fiscal year 2024. Net Income: GAAP net income was $91.5 million or $1.61 per share in the third quarter of fiscal year 2025 based on 56.8 million diluted weighted average common shares outstanding compared to $85.3 million or $1.50 per share in the third quarter of fiscal year 2024 based on 57.0 million diluted weighted average common shares outstanding. Adjusted EBITDA: Adjusted EBITDA, a non-GAAP measure, was $197.1 million in the third quarter of fiscal year 2025 compared to $167.9 million in the third quarter of fiscal year 2024.Adjusted EBITDA excluding interest income on funds held for clients, a non-GAAP measure, was $163.6 million in the third quarter of fiscal year 2025 as compared to $133.5 million in the third quarter of fiscal year 2024. Balance Sheet and Cash Flow: Cash and cash equivalents totaled $477.8 million as of March 31, 2025.Long-term debt totaled $243.8 million as of March 31, 2025, representing borrowings under our credit facility to fund the acquisition of Airbase on October 1, 2024. This reflects approximately $81.3 million repaid on our outstanding balance during the third quarter of fiscal year 2025.Cash flow from operations for the first nine months of fiscal year 2025 was $331.7 million compared to $304.7 million for the first nine 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 May 1, 2025, Paylocity is issuing guidance for the fourth quarter and full fiscal year 2025 as indicated below. Fourth Quarter 2025: Recurring and other revenue is expected to be in the range of $358.1 million to $363.1 million, which represents approximately 11% growth over fiscal year 2024 fourth quarter recurring and other revenue.Total revenue is expected to be in the range of $385.5 million to $390.5 million, which represents approximately 9% growth over fiscal year 2024 fourth quarter total revenue.Adjusted EBITDA, a non-GAAP measure, is expected to be in the range of $118.7 million to $122.7 million.Adjusted EBITDA excluding interest income on funds held for clients, a non-GAAP measure, is expected to be in the range of $91.3 million to $95.3 million. Fiscal Year 2025: Recurring and other revenue is expected to be in the range of $1.460 billion to $1.465 billion, which represents approximately 14% growth over fiscal year 2024 recurring and other revenue.Total revenue is expected to be in the range of $1.580 billion to $1.585 billion, which represents approximately 13% growth over fiscal year 2024 total revenue.Adjusted EBITDA, a non-GAAP measure, is expected to be in the range of $571.0 million to $575.0 million.Adjusted EBITDA excluding interest income on funds held for clients, a non-GAAP measure, is expected to be in the range of $451.0 million to $455.0 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 third 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, as they provide investors with the company’s view of its financial 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, including comparisons of current results to prior periods’ results by excluding items the company does not believe reflect fundamental business performance and are not representative or indicative of its results of operations. 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. CONTACT:Ryan Glenninvestors@paylocity.comwww.paylocity.com PAYLOCITY HOLDING CORPORATIONUnaudited Consolidated Balance Sheets(in thousands, except per share data) June 30,2024 March 31,2025Assets Current assets: Cash and cash equivalents$401,811 $477,785Accounts receivable, net 32,997 43,629Deferred contract costs 97,859 111,839Prepaid expenses and other 39,765 40,232Total current assets before funds held for clients 572,432 673,485Funds held for clients 2,952,060 3,429,517Total current assets 3,524,492 4,103,002Capitalized internal-use software, net 116,412 129,472Property and equipment, net 60,640 53,928Operating lease right-of-use assets 33,792 37,627Intangible assets, net 28,291 97,939Goodwill 108,937 342,799Long-term deferred contract costs 348,003 378,456Long‑term prepaid expenses and other 7,077 6,603Deferred income tax assets 17,816 18,140Total assets$4,245,460 $5,167,966 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable$8,638 $8,719Accrued expenses 158,311 193,644Total current liabilities before client fund obligations 166,949 202,363Client fund obligations 2,950,411 3,422,621Total current liabilities 3,117,360 3,624,984Long-term debt — 243,750Long-term operating lease liabilities 46,814 49,030Other long-term liabilities 6,398 7,868Deferred income tax liabilities 41,824 33,599Total liabilities$3,212,396 $3,959,231Stockholders’ equity: Preferred stock, $0.001 par value, 5,000 authorized, no shares issued and outstanding at June 30, 2024 and March 31, 2025$— $—Common stock, $0.001 par value, 155,000 shares authorized at June 30, 2024 and March 31, 2025; 55,514 shares issued and outstanding at June 30, 2024 and 55,540 shares issued and outstanding at March 31, 2025 56 56Additional paid-in capital 360,488 352,993Retained earnings 673,456 851,977Accumulated other comprehensive income (loss) (936) 3,709Total stockholders' equity$1,033,064 $1,208,735Total liabilities and stockholders’ equity$4,245,460 $5,167,966 PAYLOCITY HOLDING CORPORATIONUnaudited Consolidated Statements of Operations and Comprehensive Income(in thousands, except per share data) Three Months EndedMarch 31, Nine Months EndedMarch 31, 2024 2025 2024 2025Revenues: Recurring and other revenue$366,840 $421,096 $956,941 $1,101,915Interest income on funds held for clients 34,441 33,452 88,287 92,569Total revenues 401,281 454,548 1,045,228 1,194,484Cost of revenues 115,983 129,853 324,849 369,358Gross profit 285,298 324,695 720,379 825,126Operating expenses: Sales and marketing 86,760 91,774 246,940 273,338Research and development 43,386 51,396 134,130 154,811General and administrative 48,863 54,495 142,125 159,180Total operating expenses 179,009 197,665 523,195 587,329Operating income 106,289 127,030 197,184 237,797Other income (expense) 4,324 (468) 11,349 4,467Income before income taxes 110,613 126,562 208,533 242,264Income tax expense 25,299 35,079 50,586 63,743Net income$85,314 $91,483 $157,947 $178,521Other comprehensive income (loss), net of tax (1,227) 3,492 3,822 4,645Comprehensive income$84,087 $94,975 $161,769 $183,166 Net income per share: Basic$1.51 $1.64 $2.81 $3.20Diluted$1.50 $1.61 $2.77 $3.15 Weighted-average shares used in computing net income per share: Basic 56,369 55,810 56,216 55,759Diluted 57,048 56,780 56,975 56,640 Stock-based compensation expense and employer payroll taxes related to stock releases and option exercises for each of the three and nine months ended March 31 are included in the above line items: Three Months EndedMarch 31, Nine Months EndedMarch 31, 2024 2025 2024 2025Cost of revenues$4,953 $4,789 $16,194 $15,719Sales and marketing 9,537 8,678 29,564 29,093Research and development 8,031 9,143 30,466 31,315General and administrative 14,188 14,865 46,323 41,918Total stock-based compensation expense and employer payroll taxes related to stock releases and option exercises$36,709 $37,475 $122,547 $118,045 PAYLOCITY HOLDING CORPORATIONUnaudited Consolidated Statements of Cash Flows(in thousands) Nine Months EndedMarch 31, 2024 2025 Cash flows from operating activities: Net income$157,947 $178,521 Adjustments to reconcile net income to net cash provided by operating activities: Stock-based compensation expense 117,165 112,538 Depreciation and amortization expense 55,779 73,184 Deferred income tax expense (benefit) 18,543 (1,680)Provision for credit losses 713 875 Net accretion of discounts on available-for-sale securities (3,688) (1,639)Other (3,111) 951 Changes in operating assets and liabilities: Accounts receivable (9,913) (7,814)Deferred contract costs (50,807) (42,559)Prepaid expenses and other (2,191) 2,195 Accounts payable (554) (1,886)Accrued expenses and other 24,856 18,971 Net cash provided by operating activities 304,739 331,657 Cash flows from investing activities: Purchases of available-for-sale securities (231,672) (121,777)Proceeds from sales and maturities of available-for-sale securities 222,712 122,969 Capitalized internal-use software costs (44,501) (45,563)Purchases of property and equipment (11,701) (7,624)Acquisitions of businesses, net of cash and funds held for clients acquired (12,031) (277,851)Other investing activities 783 1,303 Net cash used in investing activities (76,410) (328,543)Cash flows from financing activities: Net change in client fund obligations 964,082 429,856 Borrowings under credit facility — 325,000 Repayment of credit facility — (81,250)Repurchases of common shares — (91,080)Proceeds from employee stock purchase plan 9,534 10,561 Taxes paid related to net share settlement of equity awards (46,057) (49,121)Other financing activities (35) (400)Net cash provided by financing activities 927,524 543,566 Net change in cash, cash equivalents and funds held for clients' cash and cash equivalents 1,155,853 546,680 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$3,577,165 $3,392,349 Supplemental Disclosure of Non-Cash Investing and Financing Activities Purchases of property and equipment and capitalized internal-use software, accrued but not paid$2,777 $2,372 Liabilities assumed for acquisitions$378 $55,730 Supplemental Disclosure of Cash Flow Information Cash paid for interest$372 $9,548 Cash paid for income taxes$34,659 $63,963 Reconciliation of cash, cash equivalents and funds held for clients' cash and cash equivalents to the Consolidated Balance Sheets Cash and cash equivalents$492,695 $477,785 Funds held for clients' cash and cash equivalents 3,084,470 2,914,564 Total cash, cash equivalents and funds held for clients' cash and cash equivalents$3,577,165 $3,392,349 Paylocity Holding CorporationReconciliation of GAAP to non-GAAP Financial Measures(In thousands except per share data) Three Months Ended March 31, Nine Months EndedMarch 31, 2024 2025 2024 2025Reconciliation from Gross profit to Adjusted gross profit: Gross profit$285,298 $324,695 $720,379 $825,126Amortization of capitalized internal-use software costs 12,260 15,248 32,471 43,858Amortization of certain acquired intangibles 2,136 4,749 5,843 11,562Stock-based compensation expense and employer payroll taxes related to stock releases and option exercises 4,953 4,789 16,194 15,719Other items (1) — 641 — 781Adjusted gross profit$304,647 $350,122 $774,887 $897,046 Three Months Ended March 31, Nine Months EndedMarch 31, 2024 2025 2024 2025Reconciliation from Operating income to Non-GAAP Operating income: Operating income$106,289 $127,030 $197,184 $237,797Stock-based compensation expense and employer payroll taxes related to stock releases and option exercises 36,709 37,475 122,547 118,045Amortization of acquired intangibles 2,798 5,627 7,859 13,852Other items (2) 112 2,611 (2,031) 9,073Non-GAAP Operating income$145,908 $172,743 $325,559 $378,767 Three Months Ended March 31, Nine Months EndedMarch 31, 2024 2025 2024 2025 Reconciliation from Net income to Non-GAAP Net income: Net income$85,314 $91,483 $157,947 $178,521 Stock-based compensation expense and employer payroll taxes related to stock releases and option exercises 36,709 37,475 122,547 118,045 Amortization of acquired intangibles 2,798 5,627 7,859 13,852 Other items (2) 112 2,611 (2,031) 9,073 Income tax effect on adjustments (3) 1,197 873 3,661 (1,795)Non-GAAP Net income$126,130 $138,069 $289,983 $317,696 Three Months Ended March 31, Nine Months EndedMarch 31, 2024 2025 2024 2025Calculation of Non-GAAP Net income per share: Non-GAAP Net income$126,130 $138,069 $289,983 $317,696Diluted weighted-average number of common shares 57,048 56,780 56,975 56,640Non-GAAP Net income per share$2.21 $2.43 $5.09 $5.61 Three Months Ended March 31, Nine Months EndedMarch 31, 2024 2025 2024 2025 Reconciliation from Net income to Adjusted EBITDA and Adjusted EBITDA excluding interest income on funds held for clients Net income$85,314 $91,483 $157,947 $178,521 Interest expense 189 4,436 568 9,682 Income tax expense 25,299 35,079 50,586 63,743 Depreciation and amortization expense 20,278 25,972 55,779 73,184 EBITDA 131,080 156,970 264,880 325,130 Stock-based compensation expense and employer payroll taxes related to stock releases and option exercises 36,709 37,475 122,547 118,045 Other items (2) 112 2,611 (2,031) 9,073 Adjusted EBITDA$167,901 $197,056 $385,396 $452,248 Interest income on funds held for clients (34,441) (33,452) (88,287) (92,569)Adjusted EBITDA excluding interest income on funds held for clients$133,460 $163,604 $297,109 $359,679 Three Months Ended March 31, Nine Months EndedMarch 31, 2024 2025 2024 2025Reconciliation of Non-GAAP sales and marketing: Sales and marketing$86,760 $91,774 $246,940 $273,338Less: Stock-based compensation expense and employer payroll taxes related to stock releases and option exercises 9,537 8,678 29,564 29,093Less: Other items (1) — 595 — 1,224Non-GAAP sales and marketing$77,223 $82,501 $217,376 $243,021 Three Months Ended March 31, Nine Months EndedMarch 31, 2024 2025 2024 2025Reconciliation of Non-GAAP total research and development: Research and development$43,386 $51,396 $134,130 $154,811Add: Capitalized internal-use software costs 15,018 15,966 44,501 45,563Less: Stock-based compensation expense and employer payroll taxes related to stock releases and option exercises 8,031 9,143 30,466 31,315Less: Other items (4) 152 658 512 1,669Non-GAAP total research and development$50,221 $57,561 $147,653 $167,390 Three Months Ended March 31, Nine Months EndedMarch 31, 2024 2025 2024 2025Reconciliation of Non-GAAP general and administrative: General and administrative$48,863 $54,495 $142,125 $159,180Less: Stock-based compensation expense and employer payroll taxes related to stock releases and option exercises 14,188 14,865 46,323 41,918Less: Amortization of certain acquired intangibles 662 878 2,016 2,290Less: Other items (5) (40) 717 (2,543) 5,399Non-GAAP general and administrative$34,053 $38,035 $96,329 $109,573 Nine Months EndedMarch 31, 2024 2025 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$304,739 $331,657 Capitalized internal-use software costs (44,501) (45,563)Purchases of property and equipment (11,701) (7,624)Free cash flow$248,537 $278,470 Cash paid for other items (6) 2,019 6,723 Adjusted free cash flow$250,556 $285,193 Less: Interest income on funds held for clients (88,287) (92,569)Adjusted free cash flow excluding interest income on funds held for clients$162,269 $192,624 (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 Third Quarter Fiscal Year 2025 Financial Results

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