UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 1, 2018
PAYLOCITY HOLDING CORPORATION
(Exact name of registrant as specified in charter)
Delaware |
|
001-36348 |
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46-4066644 |
(State or Other Jurisdiction of |
|
(Commission File Number) |
|
(I.R.S. Employer Identification |
1400 American Lane
Schaumburg, Illinois, 60173
(Address of principal executive offices, including zip code)
(847) 463-3200
(Registrants telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
o¨Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Item 2.02 Results of Operations and Financial Condition.
On November 1, 2018, Paylocity Holding Corporation (the Company) issued a press release announcing financial results for the three month period ended September 30, 2018. The press release contains forward-looking statements regarding the Company, and includes cautionary statements identifying important factors that could cause actual results to differ materially from those anticipated.
The press release issued November 1, 2018 is furnished herewith as Exhibit 99.1. The information in this Item 2.02, including Exhibit 99.1, is being furnished and shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liability of that Section, nor shall such information be deemed to be incorporated by reference in any registration statement or other document filed under the Securities Act of 1933 or the Securities Exchange Act of 1934, except as otherwise stated in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. |
|
Description |
99.1 |
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Press Release issued by Paylocity Holding Corporation dated November 1, 2018. |
EXHIBIT INDEX
Exhibit No. |
|
Description |
99.1 |
|
Press Release issued by Paylocity Holding Corporation dated November 1, 2018. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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PAYLOCITY HOLDING CORPORATION |
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|
|
|
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Date: November 1, 2018 |
By: |
/s/ Toby J. Williams |
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Toby J. Williams |
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Chief Financial Officer |
Paylocity Announces First Quarter Fiscal Year 2019 Financial Results
· Q1 2019 Total Revenue of $100.5 million, up 26% year-over-year
· Q1 2019 Recurring Revenue of $99.3 million, up 26% year-over-year
SCHAUMBURG, IL. November 1, 2018 Paylocity Holding Corporation (Nasdaq: PCTY), a leading provider of cloud-based payroll and human capital management software solutions, today announced financial results for the first quarter of fiscal year 2019, which ended September 30, 2018.
Fiscal 2019 is off to a nice start with $100.5 million in total revenue and 26% growth over the first quarter of last fiscal year, said Steve Beauchamp, Chief Executive Officer of Paylocity. Last month we hosted a record number of attendees for our Elevate Client Conference, where we announced the release of our TPA solutions product as well as a number of new innovative features across our platform. We also continue to receive recognition highlighting the strength of our culture with 3 additional great place to work awards.
First Quarter Fiscal 2019 Financial Highlights
Revenue:
· Total revenue was $100.5 million, an increase of 26% from first quarter fiscal year 2018 revenue, as adjusted and as presented on a non-GAAP basis in the table below.
· Total recurring revenue was $99.3 million, representing 99% of total revenue and an increase of 26% from first quarter fiscal year 2018 total recurring revenue, as adjusted and as presented on a non-GAAP basis in the table below.
Operating Income:
· GAAP operating income was $3.8 million and non-GAAP operating income was $15.3 million in the first quarter of fiscal year 2019.
Net Income:
· GAAP net income was $9.9 million or $0.18 per share for the first quarter of fiscal year 2019 based on 55.5 million diluted weighted average common shares outstanding. GAAP net income includes $6.9 million of excess tax benefit related to employee stock-based compensation payments.
Adjusted EBITDA:
· Adjusted EBITDA, a non-GAAP measure, was $23.3 million in the first quarter of fiscal year 2019.
Balance Sheet and Cash Flow:
· Cash, cash equivalents and invested corporate cash totaled $84.9 million as of the end of the quarter.
· Cash flow from operations for the first quarter of fiscal year 2019 was $7.3 million compared to $8.2 million for the first quarter of fiscal year 2018, which included a $1.7 million tenant improvement allowance.
Stock Repurchase Plan:
In August 2018 Paylocitys Board of Directors approved a stock repurchase plan under which $35.0 million was available for repurchase through August 14, 2019, and the stock repurchase plan has been fully executed.
Accounting Update:
We adopted ASC 606 using the modified retrospective method in fiscal 2019, which began on July 1, 2018. Under ASC 606 we will amortize certain sales and implementation expenses over a period of 7 years.
Also as of July 1, 2018 we began recognizing implementation revenue ratably over a period of generally up to 24 months.
In the interest of comparability during this transition year, in the reconciliation table below we are providing revenue for each quarter of fiscal 2018 on a GAAP and non-GAAP, pro-forma basis giving effect to the change in recognition of implementation revenue for fiscal 2018.
Paylocity Holding Corporation
Reconciliation of GAAP to non-GAAP Revenue
(In thousands)
|
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Three Months Ended September 30, 2017 |
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Three Months Ended December 31, 2017 |
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Three Months Ended March 31, 2018 |
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As Reported |
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Non-GAAP |
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As Adjusted |
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As Reported |
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Non-GAAP |
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As Adjusted |
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As Reported |
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Non-GAAP |
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As Adjusted |
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Revenues: |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Recurring fees |
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$ |
77,294 |
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$ |
|
|
$ |
77,294 |
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$ |
81,292 |
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$ |
|
|
$ |
81,292 |
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$ |
105,857 |
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$ |
|
|
$ |
105,857 |
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Interest income on funds held for clients |
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1,617 |
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|
1,617 |
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1,783 |
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1,783 |
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2,719 |
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2,719 |
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Total recurring revenues |
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78,911 |
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78,911 |
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83,075 |
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83,075 |
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108,576 |
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108,576 |
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Implementation services and other |
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2,589 |
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(1,789 |
) |
800 |
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2,929 |
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(1,011 |
) |
1,918 |
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4,831 |
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(2,076 |
) |
2,755 |
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Total Revenue |
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$ |
81,500 |
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$ |
(1,789 |
) |
$ |
79,711 |
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$ |
86,004 |
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$ |
(1,011 |
) |
$ |
84,993 |
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$ |
113,407 |
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$ |
(2,076 |
) |
$ |
111,331 |
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Three Months Ended June 30, 2018 |
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Twelve Months Ended June 30, 2018 |
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As Reported |
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Non-GAAP |
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As Adjusted |
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As Reported |
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Non-GAAP |
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As Adjusted |
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Revenues: |
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Recurring fees |
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$ |
89,989 |
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$ |
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$ |
89,989 |
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$ |
354,432 |
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$ |
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$ |
354,432 |
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Interest income on funds held for clients |
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2,974 |
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2,974 |
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9,093 |
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9,093 |
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Total recurring revenues |
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92,963 |
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92,963 |
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363,525 |
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363,525 |
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Implementation services and other |
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3,653 |
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(600 |
) |
3,053 |
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14,002 |
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(5,476 |
) |
8,526 |
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Total Revenue |
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$ |
96,616 |
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$ |
(600 |
) |
$ |
96,016 |
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$ |
377,527 |
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$ |
(5,476 |
) |
$ |
372,051 |
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(1) As adjusted implementation revenue as if we recognized implementation revenue ratably over a period of up to 24 months for each quarter of fiscal 2018.
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 November 1, 2018, Paylocity is issuing guidance for the second quarter and full fiscal year 2019 as indicated below.
Second Quarter 2019:
· Total revenue is expected to be in the range of $104.0 million to $105.0 million, which represents approximately 23% growth over fiscal 2018 second quarter revenue, as adjusted and as presented on a non-GAAP basis in the table above.
· Adjusted EBITDA, a non-GAAP measure, is expected to be in the range of $23.5 million to $24.5 million.
Fiscal Year 2019:
· Total revenue is expected to be in the range of $453.0 million to $455.0 million, which represents approximately 22% growth over fiscal 2018 total revenue, as adjusted and as presented on a non-GAAP basis in the table above.
· Adjusted EBITDA, a non-GAAP measure, is expected to be in the range of $126.5 million to $128.5 million.
We are unable to reconcile these forward-looking non-GAAP financial measures 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 first quarter fiscal year 2019 results at 4:00 p.m. Central Time today (5:00 Eastern Time). A live audio webcast of the conference call, together with detailed financial information, can be accessed through the companys Investor Relations Web site at http://www.paylocity.com. Participants who choose to call in to the conference call can do so by dialing (855) 226-3021 or (315) 625-6892, passcode 9217039. A replay of the call will be available and archived via webcast at www.paylocity.com.
About Paylocity
Paylocity (NASDAQ: PCTY) is a leading provider of cloud-based payroll and human capital management (HCM) software solutions. Paylocitys comprehensive product suite delivers a unified platform for professionals to make strategic decisions in the areas of benefits, core HR, payroll, talent, and workforce management, while cultivating a modern workplace and improving employee engagement. Founded in 1997 and headquartered in Schaumburg, Ill., Paylocity has consistently been recognized nationally for its innovation, culture, and growth. In 2018, Paylocity was honored on Glassdoors Best Places to Work Employees Choice list; ranked #30 on Crains Chicagos Fast Fifty list of fastest-growing companies; named one of the 101 Best & Brightest Companies to Work For; and ranked #6 on Selling Powers 50 Best Companies to Sell For list, among receiving a number of other national and local workplace awards. For more information about Paylocity, visit www.paylocity.com.
Non-GAAP Financial Measures
The company uses certain non-GAAP financial measures in this release, including Adjusted EBITDA, adjusted gross profit, adjusted recurring gross profit, non-GAAP operating income, non-GAAP net income, non-GAAP net income per share, non-GAAP sales and marketing, non-GAAP total research and development and non-GAAP general and administrative and free cash flow. Generally, a non-GAAP financial measure is a numerical measure of a companys performance, financial position or cash flow that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. We define Adjusted EBITDA as net income (loss) before interest expense, income tax expense (benefit), and depreciation and amortization expense, adjusted to eliminate stock-based compensation expense and employer payroll taxes related to stock releases and option exercises, acquisition-related costs and lease exit costs. Adjusted gross profit and adjusted recurring gross profit are adjusted to eliminate stock-based compensation expense and employer payroll taxes related to stock releases and option exercises and amortization of capitalized internal-use software costs. 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, lease exit costs and accelerated depreciation expense and acquisition-related costs. 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. 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 acquired intangibles, acquisition-related costs and lease exit costs and accelerated depreciation expense. 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, acquisition-related costs, lease exit costs and accelerated depreciation expense and the income tax effect on these items, the valuation allowance release, excess tax benefit related to employee stock-based compensation payments and the impact of tax reform. Pro forma diluted weighted average number of common shares are adjusted for the weighted average effect of potentially diluted shares. Non-GAAP total research and development is adjusted for capitalized internal-use software costs and to eliminate stock-based compensation expense and employer payroll taxes related to stock releases and option exercises. Free cash flow is defined as net cash provided by operating activities less capitalized internal-use software costs, purchase of property and equipment and lease allowances used for tenant improvements. Please note that other companies may define their non-GAAP financial measures differently than we do. Management presents certain non-GAAP financial measures in this release because it considers them to be important supplemental measures of performance. Management uses these non-GAAP financial measures for planning purposes, including analysis of the companys 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 companys financial and operational performance. Management also intends to provide these non-GAAP financial measures as part of the companys future earnings discussions and, therefore, the inclusion of the non-GAAP financial measures should provide consistency in the companys financial reporting. Non-GAAP financial measures have limitations as an analytical tool. Investors are encouraged to review the reconciliation of the non-GAAP measures to their most directly comparable GAAP measures provided in this release.
Included in the press release, we also refer to non-GAAP revenue. Effective July 1, 2018, we began recognizing implementation revenue ratably over a period of generally up to 24 months. To allow investors comparability to prior year results, we have provided comparable information on fiscal 2018 as if we had recognized implementation revenue ratably over a period of up to 24 months during fiscal 2018. However, for periods beginning before adoption, those adjusted financial measures are considered not to be calculated in accordance with GAAP and are thus presented as non-GAAP financial metrics.
Safe Harbor/forward looking statements
This press release contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, included herein regarding Paylocitys future operations, ability to scale its business, future financial position and performance, future revenues, projected costs, 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, among other things, statements about managements estimates regarding future revenues and financial performance and other statements about managements beliefs, intentions or goals. Paylocity may not actually achieve the expectations disclosed in the forward-looking statements, and you should not place undue reliance on Paylocitys forward-looking statements. These forward-looking statements involve risks and uncertainties that could cause actual results or events to differ materially from the expectations disclosed in the forward-looking statements, including, but not limited to Paylocitys ability to retain existing clients and to attract new clients to enter into subscriptions for its services; Paylocitys ability to sell new products and retain subscriptions for its existing products to its new and existing clients; the challenges associated with a growing companys 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; Paylocitys reliance on and ability to expand its referral network of third parties; difficulties associated with accurately forecasting revenue and appropriately planning expenses; challenges with managing growth effectively; difficulties in forecasting Paylocitys tax position; risks related to regulatory, legislative and judicial uncertainty in Paylocitys markets, including the potential repeal or replacement of the Affordable Care Act; continued acceptance of SaaS as an effective method for delivery of payroll and HCM solutions; Paylocitys ability to protect and defend its intellectual property; the risk that Paylocitys security measures are compromised or the unauthorized access to customer data; unexpected events in the market for Paylocitys solutions; changes in the competitive environment in Paylocitys industry and the markets in which it operates; adverse changes in general economic or market conditions; changes in the employment rates of Paylocitys clients and the resultant impact on revenue; and other risks and potential factors that could affect Paylocitys business and financial results identified in Paylocitys filings with the Securities and Exchange Commission (the SEC), including its 10-K filed with the SEC on August 10, 2018. Additional information will also be set forth in Paylocitys future quarterly reports on Form 10-Q, annual reports on Form 10-K and other filings that Paylocity makes with the SEC. These forward-looking statements represent Paylocitys expectations as of the date of this press release. Subsequent events may cause these expectations to change, and 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 CORPORATION
Unaudited Consolidated Balance Sheets
(in thousands, except per share data)
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June 30, |
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September 30, |
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2018 |
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2018 |
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Assets |
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Current assets: |
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Cash and cash equivalents |
|
$ |
137,193 |
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$ |
63,662 |
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Corporate investments |
|
732 |
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21,225 |
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Accounts receivable, net |
|
3,453 |
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2,992 |
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Deferred contract costs |
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16,215 |
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Prepaid expenses and other |
|
11,248 |
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14,220 |
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Total current assets before funds held for clients |
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152,626 |
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118,314 |
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Funds held for clients |
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1,225,614 |
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1,168,156 |
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|
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Total current assets |
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1,378,240 |
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1,286,470 |
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Capitalized internal-use software, net |
|
21,094 |
|
22,034 |
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Property and equipment, net |
|
62,029 |
|
61,823 |
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Intangible assets, net |
|
13,002 |
|
12,439 |
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Goodwill |
|
9,590 |
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9,590 |
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Long-term deferred contract costs |
|
|
|
59,061 |
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Long-term prepaid expenses and other |
|
1,504 |
|
3,132 |
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Deferred income tax assets, net |
|
22,140 |
|
9,554 |
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Total assets |
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$ |
1,507,599 |
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$ |
1,464,103 |
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Liabilities and Stockholders Equity |
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Current liabilities: |
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Accounts payable |
|
$ |
2,990 |
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$ |
3,559 |
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Accrued expenses |
|
42,241 |
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35,678 |
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Total current liabilities before client fund obligations |
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45,231 |
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39,237 |
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Client fund obligations |
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1,225,614 |
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1,168,156 |
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|
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Total current liabilities |
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1,270,845 |
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1,207,393 |
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Deferred rent |
|
22,812 |
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22,660 |
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Other long-term liabilities |
|
1,118 |
|
1,424 |
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|
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Total liabilities |
|
$ |
1,294,775 |
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$ |
1,231,477 |
|
Stockholders equity: |
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|
|
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Preferred stock, $0.001 par value, 5,000 authorized, no shares issued and outstanding at June 30, 2018 and September 30, 2018 |
|
$ |
|
|
$ |
|
|
Common stock, $0.001 par value, 155,000 shares authorized at June 30, 2018 and September 30, 2018; 52,758 shares issued and outstanding at June 30, 2018 and 52,796 shares issued and outstanding at September 30, 2018 |
|
53 |
|
53 |
| ||
Additional paid-in capital |
|
219,588 |
|
176,851 |
| ||
Retained earnings (accumulated deficit) |
|
(6,678 |
) |
55,846 |
| ||
Accumulated other comprehensive loss |
|
(139 |
) |
(124 |
) | ||
Total stockholders equity |
|
$ |
212,824 |
|
$ |
232,626 |
|
Total liabilities and stockholders equity |
|
$ |
1,507,599 |
|
$ |
1,464,103 |
|
PAYLOCITY HOLDING CORPORATION
Unaudited Consolidated Statements of Operations and Comprehensive Income
(in thousands, except per share data)
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Three Months Ended |
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September 30, |
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2017 |
|
2018 |
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Revenues: |
|
|
|
|
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Recurring fees |
|
$ |
77,294 |
|
$ |
95,761 |
|
Interest income on funds held for clients |
|
1,617 |
|
3,502 |
| ||
|
|
|
|
|
| ||
Total recurring revenues |
|
78,911 |
|
99,263 |
| ||
Implementation services and other |
|
2,589 |
|
1,241 |
| ||
|
|
|
|
|
| ||
Total revenues |
|
81,500 |
|
100,504 |
| ||
Cost of revenues: |
|
|
|
|
| ||
Recurring revenues |
|
24,091 |
|
29,231 |
| ||
Implementation services and other |
|
10,868 |
|
6,711 |
| ||
|
|
|
|
|
| ||
Total cost of revenues |
|
34,959 |
|
35,942 |
| ||
Gross profit |
|
46,541 |
|
64,562 |
| ||
Operating expenses: |
|
|
|
|
| ||
Sales and marketing |
|
21,180 |
|
26,418 |
| ||
Research and development |
|
8,895 |
|
11,400 |
| ||
General and administrative |
|
15,951 |
|
22,968 |
| ||
|
|
|
|
|
| ||
Total operating expenses |
|
46,026 |
|
60,786 |
| ||
Operating income |
|
515 |
|
3,776 |
| ||
Other income |
|
109 |
|
269 |
| ||
|
|
|
|
|
| ||
Income before income taxes |
|
624 |
|
4,045 |
| ||
Income tax expense (benefit) |
|
81 |
|
(5,807 |
) | ||
|
|
|
|
|
| ||
Net income |
|
$ |
543 |
|
$ |
9,852 |
|
Other comprehensive income (loss) |
|
|
|
|
| ||
Unrealized gains (losses) on securities, net of tax |
|
(5 |
) |
15 |
| ||
Total other comprehensive income (loss) |
|
(5 |
) |
15 |
| ||
Comprehensive income |
|
$ |
538 |
|
$ |
9,867 |
|
|
|
|
|
|
| ||
Net income per share: |
|
|
|
|
| ||
Basic |
|
$ |
0.01 |
|
$ |
0.19 |
|
Diluted |
|
$ |
0.01 |
|
$ |
0.18 |
|
|
|
|
|
|
| ||
Weighted-average shares used in computing net income per share: |
|
|
|
|
| ||
Basic |
|
51,893 |
|
52,865 |
| ||
Diluted |
|
54,610 |
|
55,487 |
|
Stock-based compensation expense and employer payroll taxes related to stock releases and option exercises for each of the three months ended September 30 are included in the above line items:
|
|
Three months ended |
| ||||
|
|
2017 |
|
2018 |
| ||
Cost of revenue recurring |
|
$ |
737 |
|
$ |
1,084 |
|
Cost of revenue implementation services and other |
|
444 |
|
512 |
| ||
Sales and marketing |
|
2,051 |
|
1,967 |
| ||
Research and development |
|
1,097 |
|
1,664 |
| ||
General and administrative |
|
2,966 |
|
5,759 |
| ||
Total stock-based compensation expense and employer payroll taxes related to stock releases and option exercises |
|
$ |
7,295 |
|
$ |
10,986 |
|
PAYLOCITY HOLDING CORPORATION
Unaudited Consolidated Statements of Cash Flows
(in thousands)
|
|
Three Months Ended |
| ||||
|
|
September 30, |
| ||||
|
|
2017 |
|
2018 |
| ||
|
|
|
|
|
| ||
Cash flows from operating activities: |
|
|
|
|
| ||
|
|
|
|
|
| ||
Net income |
|
$ |
543 |
|
$ |
9,852 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
| ||
Stock-based compensation expense |
|
6,606 |
|
9,425 |
| ||
Depreciation and amortization expense |
|
6,673 |
|
8,232 |
| ||
Deferred income tax expense (benefit) |
|
37 |
|
(5,809 |
) | ||
Provision for doubtful accounts |
|
4 |
|
30 |
| ||
Net accretion of discounts and amortization of premiums on available-for-sale securities |
|
(108 |
) |
(407 |
) | ||
Loss on disposal of equipment |
|
31 |
|
241 |
| ||
Changes in operating assets and liabilities: |
|
|
|
|
| ||
Accounts receivable |
|
(529 |
) |
431 |
| ||
Deferred contract costs |
|
|
|
(7,169 |
) | ||
Prepaid expenses and other |
|
(305 |
) |
(853 |
) | ||
Accounts payable |
|
(101 |
) |
(415 |
) | ||
Accrued expenses |
|
(6,304 |
) |
(6,214 |
) | ||
Tenant improvement allowance |
|
1,656 |
|
|
| ||
Net cash provided by operating activities |
|
8,203 |
|
7,344 |
| ||
|
|
|
|
|
| ||
Cash flows from investing activities: |
|
|
|
|
| ||
Purchases of available-for-sale securities |
|
(58,844 |
) |
(75,804 |
) | ||
Proceeds from sales and maturities of available-for-sale securities |
|
421 |
|
56,446 |
| ||
Net change in funds held for clients cash and cash equivalents |
|
59,001 |
|
55,844 |
| ||
Capitalized internal-use software costs |
|
(3,751 |
) |
(5,001 |
) | ||
Purchases of property and equipment |
|
(2,693 |
) |
(2,428 |
) | ||
Lease allowances used for tenant improvements |
|
(1,466 |
) |
|
| ||
Net cash provided by (used in) investing activities |
|
(7,332 |
) |
29,057 |
| ||
|
|
|
|
|
| ||
Cash flows from financing activities: |
|
|
|
|
| ||
Net change in client fund obligations |
|
(470 |
) |
(57,458 |
) | ||
Repurchases of common shares |
|
|
|
(34,679 |
) | ||
Proceeds from exercise of stock options |
|
|
|
85 |
| ||
Taxes paid related to net share settlement of equity awards |
|
(6,470 |
) |
(17,880 |
) | ||
Net cash used in financing activities |
|
(6,940 |
) |
(109,932 |
) | ||
Net Change in Cash and Cash Equivalents |
|
(6,069 |
) |
(73,531 |
) | ||
Cash and Cash EquivalentsBeginning of Period |
|
103,468 |
|
137,193 |
| ||
Cash and Cash EquivalentsEnd of Period |
|
$ |
97,399 |
|
$ |
63,662 |
|
Supplemental Disclosure of Non-Cash Investing and Financing Activities |
|
|
|
|
| ||
Purchase of property and equipment and internal-use software, accrued but not paid |
|
$ |
4,317 |
|
$ |
1,064 |
|
Repurchases of common shares, accrued but not paid |
|
$ |
|
|
$ |
313 |
|
Supplemental Disclosure of Cash Flow Information |
|
|
|
|
| ||
Cash paid for income taxes, net of refunds |
|
$ |
53 |
|
$ |
351 |
|
Paylocity Holding Corporation
Reconciliation of GAAP to non-GAAP Financial Measures
(In thousands except per share data)
|
|
Three months |
| ||||
|
|
2017 |
|
2018 |
| ||
Reconciliation from gross profit to adjusted gross profit: |
|
|
|
|
| ||
Gross profit |
|
$ |
46,541 |
|
$ |
64,562 |
|
Amortization of capitalized internal-use software costs |
|
3,389 |
|
4,212 |
| ||
Stock-based compensation expense and employer payroll taxes related to stock releases and option exercises |
|
1,181 |
|
1,596 |
| ||
Adjusted gross profit |
|
$ |
51,111 |
|
$ |
70,370 |
|
|
|
Three months |
| ||||
|
|
2017 |
|
2018 |
| ||
Reconciliation from total recurring revenues to adjusted recurring gross profit: |
|
|
|
|
| ||
Total recurring revenues |
|
$ |
78,911 |
|
$ |
99,263 |
|
Cost of recurring revenues |
|
24,091 |
|
29,231 |
| ||
Recurring gross profit |
|
54,820 |
|
70,032 |
| ||
Amortization of capitalized internal-use software costs |
|
3,389 |
|
4,212 |
| ||
Stock-based compensation expense and employer payroll taxes related to stock releases and option exercises |
|
737 |
|
1,084 |
| ||
Adjusted recurring gross profit |
|
$ |
58,946 |
|
$ |
75,328 |
|
|
|
Three months |
| ||||
|
|
2017 |
|
2018 |
| ||
Reconciliation from operating income to non-GAAP operating income: |
|
|
|
|
| ||
Operating income |
|
$ |
515 |
|
$ |
3,776 |
|
Stock-based compensation expense and employer payroll taxes related to stock releases and option exercises |
|
7,295 |
|
10,986 |
| ||
Amortization of acquired intangibles |
|
359 |
|
563 |
| ||
Non-GAAP operating income |
|
$ |
8,169 |
|
$ |
15,325 |
|
|
|
Three months |
| ||||
|
|
2017 |
|
2018 |
| ||
Reconciliation from net income to non-GAAP net income: |
|
|
|
|
| ||
Net income |
|
$ |
543 |
|
$ |
9,852 |
|
Stock-based compensation expense and employer payroll taxes related to stock releases and option exercises, net of tax |
|
7,295 |
|
7,690 |
| ||
Amortization of acquired intangibles, net of tax |
|
359 |
|
394 |
| ||
Excess tax benefit related to employee stock-based compensation payments |
|
|
|
(6,925 |
) | ||
Non-GAAP net income |
|
$ |
8,197 |
|
$ |
11,011 |
|
|
|
Three months |
| ||||
|
|
2017 |
|
2018 |
| ||
Calculation of non-GAAP net income per share: |
|
|
|
|
| ||
Non-GAAP net income |
|
$ |
8,197 |
|
$ |
11,011 |
|
Diluted weighted-average number of common shares |
|
54,610 |
|
55,487 |
| ||
Non-GAAP net income per share |
|
$ |
0.15 |
|
$ |
0.20 |
|
|
|
Three months |
| ||||
|
|
2017 |
|
2018 |
| ||
Reconciliation from net income to Adjusted EBITDA: |
|
|
|
|
| ||
Net income |
|
$ |
543 |
|
$ |
9,852 |
|
Interest expense |
|
|
|
|
| ||
Income tax expense (benefit) |
|
81 |
|
(5,807 |
) | ||
Depreciation and amortization expense |
|
6,673 |
|
8,232 |
| ||
EBITDA |
|
7,297 |
|
12,277 |
| ||
Stock-based compensation expense and employer payroll taxes related to stock releases and option exercises |
|
7,295 |
|
10,986 |
| ||
Adjusted EBITDA |
|
$ |
14,592 |
|
$ |
23,263 |
|
|
|
Three months |
| ||||
|
|
2017 |
|
2018 |
| ||
Reconciliation of non-GAAP Sales and Marketing: |
|
|
|
|
| ||
Sales and Marketing |
|
$ |
21,180 |
|
$ |
26,418 |
|
Stock-based compensation expense and employer payroll taxes related to stock releases and option exercises |
|
2,051 |
|
1,967 |
| ||
Non-GAAP Sales and Marketing |
|
$ |
19,129 |
|
$ |
24,451 |
|
|
|
Three months |
| ||||
|
|
2017 |
|
2018 |
| ||
Reconciliation of non-GAAP Total Research and Development: |
|
|
|
|
| ||
Research and Development |
|
$ |
8,895 |
|
$ |
11,400 |
|
Capitalized internal-use software costs |
|
3,751 |
|
5,001 |
| ||
Stock-based compensation expense and employer payroll taxes related to stock releases and option exercises |
|
1,097 |
|
1,664 |
| ||
Non-GAAP Total Research and Development |
|
$ |
11,549 |
|
$ |
14,737 |
|
|
|
Three months |
| ||||
|
|
2017 |
|
2018 |
| ||
Reconciliation of non-GAAP General and Administrative: |
|
|
|
|
| ||
General and Administrative |
|
$ |
15,951 |
|
$ |
22,968 |
|
Stock-based compensation expense and employer payroll taxes related to stock releases and option exercises |
|
2,966 |
|
5,759 |
| ||
Amortization of acquired intangibles |
|
359 |
|
563 |
| ||
Non-GAAP General and Administrative |
|
$ |
12,626 |
|
$ |
16,646 |
|