What To Expect From Paylocity's (PCTY) Q2 Earnings
Paylocity Holding Corp (NASDAQ:PCTY), a leading provider of payroll and human resources software, is set to announce its earnings results this Tuesday after the market closes. Investors are eager to see what the company has in store.
In the previous quarter, Paylocity surpassed analysts’ revenue expectations by 2.9%, reporting revenues of $454.5 million, which marked a 13.3% year-on-year growth. The quarter was notably strong, with the company also beating analysts’ EBITDA estimates and providing full-year EBITDA guidance that exceeded expectations.
Analyst Expectations
For this upcoming quarter, analysts project Paylocity’s revenue to rise by 8.8% year-on-year, reaching $388.6 million. This is a slowdown compared to the 15.8% growth recorded in the same period last year. Adjusted earnings are anticipated to be $1.38 per share.
Most analysts have reaffirmed their estimates over the past 30 days, indicating confidence in the company's performance leading into the earnings report. Paylocity has a strong track record, having beaten revenue estimates consistently over the last two years by an average of 1.7%.
Peer Performance
In the finance and HR software sector, some peers have already reported their Q2 results, offering a glimpse into potential outcomes for Paylocity. For instance, Asure reported a year-on-year revenue increase of 7.4%, although it missed analysts’ expectations by 3.2%. Meanwhile, Paychex saw a revenue growth of 10.2%, falling short of estimates by 1.1%. Following their results, Asure's shares dropped 13.6%, and Paychex saw a decline of 7.4%.
With the outlook for 2025 clouded by potential trade policy changes and corporate tax discussions, business confidence and growth remain uncertain. While certain finance and HR software stocks have performed reasonably well in this volatile environment, the group has underperformed overall, with share prices averaging a 5% decline over the past month. Paylocity's stock is down 1.3% during this period and enters earnings with an average analyst price target of $219.94, compared to its current share price of $181.43.
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