Paycor Announces Second Quarter Fiscal Year 2025 Financial Results
Paycor HCM (PYCR) reported strong financial results for Q2 FY2025, with total revenues reaching $180.4 million, up 13% year-over-year. Recurring revenues grew 14% to $167.4 million. The company achieved an operating profit of $1.2 million, compared to a loss of $26.2 million in Q2 FY2024.
The most significant development is Paycor's pending acquisition by Paychex in an all-cash transaction valued at approximately $4.1 billion, or $22.50 per share, representing a 19% premium over the 30-day volume weighted average trading price. The merger is expected to close in the first half of 2025, subject to regulatory approvals. Upon completion, Paycor will become a wholly-owned subsidiary of Paychex and will be delisted from Nasdaq.
Paycor HCM (PYCR) ha riportato risultati finanziari solidi per il secondo trimestre dell'anno fiscale 2025, con ricavi totali che hanno raggiunto 180,4 milioni di dollari, in aumento del 13% rispetto all'anno precedente. I ricavi ricorrenti sono cresciuti del 14%, raggiungendo 167,4 milioni di dollari. L'azienda ha ottenuto un profitto operativo di 1,2 milioni di dollari, rispetto a una perdita di 26,2 milioni di dollari nel secondo trimestre dell'anno fiscale 2024.
Lo sviluppo più significativo è l'acquisizione in fase di completamento di Paycor da parte di Paychex in una transazione tutta in contante del valore di circa 4,1 miliardi di dollari, ovvero 22,50 dollari per azione, che rappresenta un premio del 19% rispetto al prezzo medio ponderato per volume degli ultimi 30 giorni. Si prevede che la fusione si chiuda nella prima metà del 2025, soggetta ad approvazioni regolatorie. Una volta completata, Paycor diventerà una filiale interamente controllata di Paychex e sarà esclusa dal listino Nasdaq.
Paycor HCM (PYCR) reportó resultados financieros sólidos para el segundo trimestre del año fiscal 2025, con ingresos totales que alcanzaron 180,4 millones de dólares, un aumento del 13% interanual. Los ingresos recurrentes crecieron un 14%, alcanzando 167,4 millones de dólares. La compañía logró un beneficio operativo de 1,2 millones de dólares, en comparación con una pérdida de 26,2 millones de dólares en el segundo trimestre del año fiscal 2024.
El desarrollo más significativo es la adquisición pendiente de Paycor por parte de Paychex en una transacción totalmente en efectivo valorada en aproximadamente 4,1 mil millones de dólares, o 22,50 dólares por acción, lo que representa una prima del 19% sobre el precio medio ponderado por volumen de los últimos 30 días. Se espera que la fusión se cierre en la primera mitad de 2025, sujeta a aprobaciones regulatorias. Al completarse, Paycor se convertirá en una subsidiaria de propiedad total de Paychex y será excluida de Nasdaq.
Paycor HCM (PYCR)은 2025 회계연도 2분기에 강력한 재무 실적을 보고했으며, 총 수익은 1억 8,040만 달러에 이르며, 전년 대비 13% 증가했습니다. 반복 수익은 14% 증가하여 1억 6,740만 달러에 달했습니다. 회사는 운영 이익 120만 달러를 기록했으며, 이는 2024 회계연도 2분기에 발생한 2,620만 달러의 손실과 비교됩니다.
가장 중요한 발전은 Paychex에 의해 Paycor의 인수 예정으로, 현금 전액을 사용하는 거래로 약 41억 달러의 가치가 있으며, 주당 22.50 달러로, 지난 30일 동안의 거래량 가중 평균 가격보다 19%의 프리미엄을 나타냅니다. 합병은 2025년 상반기 내에 종료될 것으로 예상되며, 규제 승인을 받아야 합니다. 완료되면 Paycor은 Paychex의 완전 소유 자회사로 전환되며 Nasdaq에서 상장 폐지됩니다.
Paycor HCM (PYCR) a annoncé des résultats financiers solides pour le deuxième trimestre de l'exercice fiscal 2025, avec des revenus totaux atteignant 180,4 millions de dollars, en hausse de 13 % par rapport à l'année précédente. Les revenus récurrents ont augmenté de 14 % pour atteindre 167,4 millions de dollars. La société a réalisé un bénéfice d'exploitation de 1,2 million de dollars, contre une perte de 26,2 millions de dollars au deuxième trimestre de l'exercice fiscal 2024.
Le développement le plus significatif est l'acquisition imminente de Paycor par Paychex dans le cadre d'une transaction entièrement en espèces d'une valeur d'environ 4,1 milliards de dollars, soit 22,50 dollars par action, représentant une prime de 19 % par rapport au prix moyen pondéré par le volume des 30 derniers jours. La fusion devrait se conclure au premier semestre 2025, sous réserve des approbations réglementaires. Une fois la transaction finalisée, Paycor deviendra une filiale entièrement détenue de Paychex et sera radiée de la Nasdaq.
Paycor HCM (PYCR) hat starke finanzielle Ergebnisse für das 2. Quartal des Geschäftsjahres 2025 bekannt gegeben, wobei die Gesamterlöse 180,4 Millionen USD erreichten, was einem Anstieg von 13 % im Vergleich zum Vorjahr entspricht. Die wiederkehrenden Erlöse stiegen um 14 % auf 167,4 Millionen USD. Das Unternehmen erzielte einen operativen Gewinn von 1,2 Millionen USD, im Vergleich zu einem Verlust von 26,2 Millionen USD im 2. Quartal des Geschäftsjahres 2024.
Die bedeutendste Entwicklung ist die bevorstehende Übernahme von Paycor durch Paychex in einer Barzahlungstransaktion, die auf etwa 4,1 Milliarden USD oder 22,50 USD pro Aktie geschätzt wird, was eine Prämie von 19 % über dem volumen-gewichteten Durchschnittspreis der letzten 30 Tage darstellt. Die Fusion wird voraussichtlich im ersten Halbjahr 2025 abgeschlossen, vorbehaltlich der regulatorischen Genehmigungen. Nach Abschluss wird Paycor eine hundertprozentige Tochtergesellschaft von Paychex und wird von der Nasdaq gestrichen.
- Total revenues increased 13% YoY to $180.4 million
- Recurring revenues grew 14% YoY to $167.4 million
- Adjusted operating income increased 36% to $31.8 million
- Operating margin improved from -16% to 1%
- Adjusted free cash flow improved to $28.5 million from $14.8 million
- Acquisition deal with Paychex at $22.50 per share, representing 19% premium
- Net loss of $2.0 million in Q2 FY2025
- Suspension of financial guidance for FY2025
- Pending delisting from Nasdaq following merger completion
Insights
The Q2 FY2025 results demonstrate Paycor's strong execution and improving financial health, marked by several key achievements. The company's recurring revenue reached
The adjusted operating income expansion from
The pending Paychex acquisition represents a strategic consolidation in the HCM software market. The
The suspension of financial guidance and cancellation of earnings calls are standard practices during pending acquisitions, protecting both parties during the regulatory review process. The transaction's expected closure in H1 2025 suggests confidence in regulatory approval, though stakeholders should monitor potential antitrust considerations given the market overlap.
- Entered into a definitive agreement to be acquired by Paychex, Inc.
- Q2 Total revenues of $180.4 million, an increase of
13% year-over-year, while expanding operating margins - Q2 Recurring revenues of $167.4 million, an increase of
14% year-over-year
CINCINNATI, Feb. 05, 2025 (GLOBE NEWSWIRE) -- Paycor HCM, Inc. (Nasdaq: PYCR) (“Paycor” or the “Company”), a leading provider of human capital management (“HCM”) software, today announced financial results for the second quarter fiscal year 2025, which ended December 31, 2024.
Second Quarter Fiscal Year 2025 Financial Highlights
- Total revenues were
$180.4 million , an increase of13% from the second quarter of FY 2024. - Operating profit was
$1.2 million , compared to an operating loss of$26.2 million from the second quarter of FY 2024 or1% of Total revenues compared to (16% ) in the second quarter of FY 2024. - Adjusted operating income* was
$31.8 million , compared to$23.3 million or an increase of36% from the second quarter of FY 2024, or18% of Total revenues compared to15% in the second quarter of FY 2024. - Net loss was
$2.0 million , compared to$26.2 million for the second quarter of FY 2024. - Adjusted net income* was
$25.0 million , compared to$18.7 million for the second quarter of FY 2024. - Net cash provided by operating activities improved to
$37.1 million from$26.2 million for the second quarter of FY 2024. - Adjusted free cash flow* improved to
$28.5 million from$14.8 million for the second quarter of FY 2024.
*Adjusted operating income, adjusted net income and adjusted free cash flow are non-GAAP financial measures. Please see the discussion below under the heading "Non-GAAP Financial Measures" and the reconciliations at the end of this press release for information concerning these and other non-GAAP financial measures referenced in this press release.
Pending Merger with Paychex, Inc.
On January 7, 2025, we announced that we had entered into a definitive agreement (“Merger Agreement”) to be acquired by Paychex, Inc. (“Paychex”) in an all-cash transaction structured as a merger and valued at approximately
Given the pending transaction, we will not be hosting an earnings conference call, are suspending financial guidance for fiscal year 2025, and will not provide financial guidance for the third quarter ending March 31, 2025. For further detail and discussion of our financial performance, please refer to our Form 10-Q for the fiscal quarter ended December 31, 2024.
Additional Information and Where to Find It
We intend to file relevant materials with the SEC, including a preliminary and definitive information statement relating to the proposed transaction. The definitive information statement will be mailed to Paycor’s stockholders. STOCKHOLDERS ARE URGED TO CAREFULLY READ THE INFORMATION STATEMENT REGARDING THE PROPOSED TRANSACTION AND ANY OTHER RELEVANT DOCUMENTS IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION.
A free copy of the information statement and other related documents (when available) filed by the Company with the SEC may be found on the “SEC Filings” section of Paycor’s investor relations website at https://www.investors.paycor.com and on the SEC website at www.sec.gov.
No Offer
No person has commenced soliciting proxies in connection with the proposed transaction referenced in this release, and this release is neither an offer to purchase nor a solicitation of an offer to sell securities.
About Paycor
Paycor’s HR, payroll, and talent platform connects leaders to people, data, and expertise. We help leaders drive engagement and retention by giving them tools to coach, develop, and grow employees. We give them unprecedented insights into their operational data with a unified HCM experience that can seamlessly connect to other mission-critical technology. By providing expert guidance and consultation, we help them achieve business results and become an extension of their teams. Learn more at paycor.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical fact, including statements regarding our future results of operations and financial position, our business outlook, our business strategy and plans, our objectives for future operations, and any statements of a general economic or industry specific nature, are forward-looking statements. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. Words such as “anticipate,” “estimate,” “expect,” “project,” “plan,” “intend,” “believe,” “may,” “will,” “should,” “can have,” “likely,” “outlook,” “potential,” “targets,” “contemplates,” or the negative or plural of these words and similar expressions are intended to identify forward-looking statements.
These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in our most recent Annual Report on Form 10-K, as well as in our other filings with the Securities and Exchange Commission. Additionally, these forward-looking statements are subject to a number of risks, uncertainties and assumptions related to the Merger Agreement. We believe that these risks include, but are not limited to: the risk that the merger may not be completed in a timely manner or at all, which may adversely affect our business and the price of our common stock; the occurrence of any event, change or other circumstance or condition that could give rise to the termination of the Merger Agreement; potential litigation relating to the merger that could be instituted against the parties to the Merger Agreement or their respective directors or officers, including the effects of any outcomes related thereto; certain restrictions during the pendency of the merger that may impact our ability to pursue certain business opportunities or strategic transactions; uncertainty as to timing of completion of the merger; risks that the benefits of the merger are not realized when and as expected; our ability to manage our growth effectively; the potential unauthorized access to our customers’ or their employees’ personal data as a result of a breach of our or our vendors’ security measures; the expansion and retention of our direct sales force with qualified and productive persons and the related effects on the growth of our business; the impact on customer expansion and retention if implementation, user experience, customer service, or performance relating to our solutions is not satisfactory; the timing of payments made to employees and taxing authorities relative to the timing of when a customer’s electronic funds transfers are settled to our account; future acquisitions of other companies’ businesses, technologies, or customer portfolios; the continued service of our key executives; our ability to innovate and deliver high-quality, technologically advanced products and services; risks specifically associated with our development and use of artificial intelligence in our solutions; our ability to attract and retain qualified personnel; the proper operation of our software; our relationships with third parties that provide financial and other functionality integrated into our HCM platform; the extent to which negative macroeconomic conditions persist or worsen in the markets in which we or our customers operate; and the impact of an economic downturn or recession in the United States or global economy. You should not rely upon forward-looking statements as predictions of future events. The events and circumstances reflected in the forward-looking statements may not be achieved or occur. Although we believe that the expectations and assumptions reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. We undertake no obligation to publicly update any forward-looking statement after the date of this report, whether as a result of new information, future developments or otherwise, or to conform these statements to actual results or revised expectations, except as may be required by law.
Non-GAAP Financial Measures
To supplement our financial information presented in accordance with generally accepted accounting principles in the United States (“GAAP”), we present the following non-GAAP financial measures in this press release: adjusted gross profit, adjusted gross profit margin, adjusted operating income, adjusted operating income margin, adjusted sales and marketing expense, adjusted general and administrative expense, adjusted research and development expense, adjusted net income, adjusted net income per share, adjusted free cash flow and adjusted free cash flow margin. Management believes these non-GAAP measures are useful in evaluating our core operating performance and trends to prepare and approve our annual budget, and to develop short-term and long-term operating plans. Management believes that non-GAAP financial information, when taken collectively, may be helpful to investors because it provides consistency and comparability with past financial performance and assists in comparisons with other companies, some of which use similar non-GAAP financial information to supplement their GAAP results. We define (i) adjusted gross profit as gross profit before amortization of intangible assets and stock-based compensation expense, in each case that are included in costs of revenues, (ii) adjusted gross profit margin as adjusted gross profit divided by total revenues, (iii) adjusted operating income as income (loss) from operations before amortization of acquired intangible assets and naming rights, stock-based compensation expense, exit costs due to exiting leases of certain facilities and other certain corporate expenses, such as costs related to secondary offerings, professional, consulting and other costs and acquisition costs, (iv) adjusted operating income margin as adjusted operating income divided by total revenues, (v) adjusted sales and marketing expense as sales and marketing expenses before amortization of naming rights and stock-based compensation expense, (vi) adjusted general and administrative expense as general and administrative expenses before amortization of acquired intangible assets, stock-based compensation expense, exit costs due to exiting leases of certain facilities and other certain corporate expenses, such as costs related to secondary offerings, professional, consulting and other costs and acquisition costs, (vii) adjusted research and development expense as research and development expenses before stock-based compensation expense, (viii) adjusted net income as income (loss) before expense (benefit) for income taxes after adjusting for amortization of acquired intangible assets and naming rights, accretion expense associated with the naming rights, change in fair value of contingent consideration, stock-based compensation expense, exit costs due to exiting leases of certain facilities and other certain corporate expenses, such as costs related to secondary offerings, professional, consulting and other costs and acquisition costs, all of which are tax effected by applying an adjusted effective income tax rate, (ix) adjusted net income per share as adjusted net income divided by adjusted shares outstanding, which includes potentially dilutive securities excluded from the GAAP dilutive net income (loss) per share calculation, (x) adjusted free cash flow as cash provided (used) by operating activities less the purchase of property and equipment and internally developed software costs, excluding other certain corporate expenses, which are included in cash provided (used) by operating activities and (xi) adjusted free cash flow margin as adjusted free cash flow divided by total revenues.
The non-GAAP financial measures presented in this press release are not measures of financial performance under GAAP and should not be considered a substitute for gross profit, gross margin, income (loss) from operations, operating income margin, sales and marketing expense, general and administrative expense, research and development expense, net income (loss), diluted net income (loss) per share and cash provided (used) by operating activities. Non-GAAP financial measures have limitations as analytical tools, and when assessing our operating performance, you should not consider them in isolation, or as a substitute for analysis of our results as reported under GAAP. The non-GAAP financial measures that we present may not be comparable to similarly titled measures used by other companies. A reconciliation is provided below under “Reconciliations of Non-GAAP Measures to GAAP Measures,” for each non-GAAP financial measure to the most directly comparable financial measure stated in accordance with GAAP.
Investor Relations:
Rachel White
513-954-7388
IR@paycor.com
Media Relations:
Carly Pennekamp
513-954-7282
PR@paycor.com
| Paycor HCM, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (in thousands, except share amounts) | |||||||
| December 31, 2024 | June 30, 2024 | ||||||
| Assets | (Unaudited) | ||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 114,569 | $ | 117,958 | |||
| Accounts receivable, net allowance for credit losses | 58,252 | 48,164 | |||||
| Deferred contract costs | 75,440 | 70,377 | |||||
| Prepaid expenses | 13,284 | 12,749 | |||||
| Other current assets | 9,397 | 3,458 | |||||
| Current assets before funds held for clients | 270,942 | 252,706 | |||||
| Funds held for clients | 1,333,368 | 1,109,136 | |||||
| Total current assets | 1,604,310 | 1,361,842 | |||||
| Property and equipment, net | 34,087 | 35,220 | |||||
| Operating lease right-of-use assets | 14,308 | 14,417 | |||||
| Goodwill | 765,904 | 766,653 | |||||
| Intangible assets, net | 137,327 | 171,493 | |||||
| Capitalized software, net | 72,046 | 67,376 | |||||
| Long-term deferred contract costs | 199,450 | 189,826 | |||||
| Other long-term assets | 2,770 | 2,566 | |||||
| Total assets | $ | 2,830,202 | $ | 2,609,393 | |||
| Liabilities and Stockholders' Equity | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 21,327 | $ | 27,309 | |||
| Accrued expenses and other current liabilities | 24,851 | 26,450 | |||||
| Accrued payroll and payroll related expenses | 36,190 | 44,923 | |||||
| Deferred revenue | 13,395 | 13,600 | |||||
| Current liabilities before client fund obligations | 95,763 | 112,282 | |||||
| Client fund obligations | 1,333,944 | 1,111,373 | |||||
| Total current liabilities | 1,429,707 | 1,223,655 | |||||
| Deferred income taxes | 10,726 | 16,019 | |||||
| Long-term operating leases | 12,765 | 13,447 | |||||
| Other long-term liabilities | 67,986 | 69,346 | |||||
| Total liabilities | 1,521,184 | 1,322,467 | |||||
| Commitments and contingencies | |||||||
| Stockholders' equity: | |||||||
| Common stock | 181 | 178 | |||||
| Treasury stock, at cost, 10,620,260 shares at December 31, 2024 and June 30, 2024 | (245,074) | (245,074) | |||||
| Preferred stock, | — | — | |||||
| Additional paid-in capital | 2,111,961 | 2,081,668 | |||||
| Accumulated deficit | (557,769) | (548,437) | |||||
| Accumulated other comprehensive loss | (281) | (1,409) | |||||
| Total stockholders' equity | 1,309,018 | 1,286,926 | |||||
| Total liabilities and stockholders' equity | $ | 2,830,202 | $ | 2,609,393 | |||
| Paycor HCM, Inc. and Subsidiaries Condensed Consolidated Statements of Operations (Unaudited) (in thousands, except share amounts) | |||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||
| December 31, | December 31, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Revenues: | |||||||||||||||
| Recurring and other revenue | $ | 167,388 | $ | 147,232 | $ | 321,387 | $ | 279,940 | |||||||
| Interest income on funds held for clients | 13,050 | 12,309 | 26,527 | 23,189 | |||||||||||
| Total revenues | 180,438 | 159,541 | 347,914 | 303,129 | |||||||||||
| Cost of revenues | 62,186 | 55,125 | 121,403 | 106,503 | |||||||||||
| Gross profit | 118,252 | 104,416 | 226,511 | 196,626 | |||||||||||
| Operating expenses: | |||||||||||||||
| Sales and marketing | 60,137 | 57,753 | 116,926 | 110,531 | |||||||||||
| General and administrative | 38,554 | 56,173 | 86,850 | 104,922 | |||||||||||
| Research and development | 18,369 | 16,665 | 35,797 | 30,720 | |||||||||||
| Total operating expenses | 117,060 | 130,591 | 239,573 | 246,173 | |||||||||||
| Income (loss) from operations | 1,192 | (26,175) | (13,062) | (49,547) | |||||||||||
| Other (expense) income: | |||||||||||||||
| Interest expense | (1,135) | (1,153) | (2,273) | (2,397) | |||||||||||
| Other | 780 | (1,745) | 2,450 | (814) | |||||||||||
| Income (loss) before benefit for income taxes | 837 | (29,073) | (12,885) | (52,758) | |||||||||||
| Income tax expense (benefit) | 2,885 | (2,824) | (3,553) | (5,913) | |||||||||||
| Net loss | $ | (2,048) | $ | (26,249) | $ | (9,332) | $ | (46,845) | |||||||
| Basic and diluted net loss per share | $ | (0.01) | $ | (0.15) | $ | (0.05) | $ | (0.26) | |||||||
| Weighted average common shares outstanding: | |||||||||||||||
| Basic and diluted | 179,592,666 | 177,567,397 | 179,161,188 | 177,260,396 | |||||||||||
| Paycor HCM, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows (Unaudited) (in thousands) | |||||||
| Six Months Ended | |||||||
| December 31, | |||||||
| 2024 | 2023 | ||||||
| Cash flows from operating activities: | |||||||
| Net loss | $ | (9,332) | $ | (46,845) | |||
| Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||
| Depreciation | 2,848 | 2,997 | |||||
| Amortization of intangible assets and software | 57,533 | 68,312 | |||||
| Amortization of deferred contract costs | 38,638 | 29,876 | |||||
| Stock-based compensation expense | 28,806 | 35,964 | |||||
| Deferred tax benefit | (6,040) | (5,937) | |||||
| Bad debt expense | 3,301 | 2,870 | |||||
| Loss on sale of investments | 147 | 142 | |||||
| Loss on foreign currency exchange | 442 | 4 | |||||
| Gain on lease exit | — | (29) | |||||
| Naming rights accretion expense | 2,012 | 2,061 | |||||
| Change in fair value of deferred consideration | (112) | 2,816 | |||||
| Other | 44 | 44 | |||||
| Changes in assets and liabilities, net of effects from acquisitions: | |||||||
| Accounts receivable | (11,689) | (17,003) | |||||
| Prepaid expenses and other assets | (6,055) | (7,487) | |||||
| Accounts payable | (5,824) | (3,207) | |||||
| Accrued liabilities and other | (12,757) | (10,892) | |||||
| Deferred revenue | 112 | 255 | |||||
| Deferred contract costs | (53,325) | (53,904) | |||||
| Net cash provided by operating activities | 28,749 | 37 | |||||
| Cash flows from investing activities: | |||||||
| Purchases of client funds available-for-sale securities | (114,162) | (151,939) | |||||
| Proceeds from sale and maturities of client funds available-for-sale securities | 106,052 | 103,453 | |||||
| Purchase of property and equipment | (1,756) | (2,068) | |||||
| Acquisition of intangible assets | (1,553) | (4,133) | |||||
| Acquisition of businesses, net of cash acquired | — | (28) | |||||
| Internally developed software costs | (26,484) | (25,308) | |||||
| Net cash used in investing activities | (37,903) | (80,023) | |||||
| Cash flows from financing activities: | |||||||
| Net change in cash and cash equivalents held to satisfy client funds obligations | 221,962 | 270,540 | |||||
| Payment of contingent consideration | (1,329) | — | |||||
| Payment of capital expenditure financing | — | (3,689) | |||||
| Repayments of debt and finance lease obligations | (597) | (536) | |||||
| Withholding taxes paid related to net share settlements | (1,957) | (1,829) | |||||
| Proceeds from employee stock purchase plan | 3,444 | 4,172 | |||||
| Net cash provided by financing activities | 221,523 | 268,658 | |||||
| Impact of foreign exchange on cash and cash equivalents | 21 | 11 | |||||
| Net change in cash, cash equivalents, restricted cash and short-term investments, and funds held for clients | 212,390 | 188,683 | |||||
| Cash, cash equivalents, restricted cash and short-term investments, and funds held for clients, beginning of period | 910,580 | 879,046 | |||||
| Cash, cash equivalents, restricted cash and short-term investments, and funds held for clients, end of period | $ | 1,122,970 | $ | 1,067,729 | |||
| Supplemental disclosure of non-cash investing, financing and other cash flow information: | |||||||
| Capital expenditures in accounts payable | $ | 54 | $ | 39 | |||
| Cash paid for interest | $ | — | $ | 145 | |||
| Capital lease asset obtained in exchange for capital lease liabilities | $ | — | $ | 3,393 | |||
| Reconciliation of cash, cash equivalents, restricted cash and short-term investments, and funds held for clients to the Consolidated Balance Sheets | |||||||
| Cash and cash equivalents | $ | 114,569 | $ | 61,719 | |||
| Funds held for clients | 1,008,401 | 1,006,010 | |||||
| Total cash, cash equivalents, restricted cash and short-term investments, and funds held for clients | $ | 1,122,970 | $ | 1,067,729 | |||
Reconciliations of Non-GAAP Measures to GAAP Measures
Adjusted Gross Profit and Adjusted Gross Profit Margin (Unaudited)
| Three Months Ended | Six Months Ended | ||||||||||||||
| (in thousands) | December 31, 2024 | December 31, 2023 | December 31, 2024 | December 31, 2023 | |||||||||||
| Gross Profit* | $ | 118,252 | $ | 104,416 | $ | 226,511 | $ | 196,626 | |||||||
| Gross Profit Margin | 65.5% | 65.4% | 65.1% | 64.9% | |||||||||||
| Amortization of intangible assets | 914 | 634 | 1,789 | 2,009 | |||||||||||
| Stock-based compensation expense | 1,954 | 2,404 | 3,456 | 3,999 | |||||||||||
| Corporate adjustments | — | — | 21 | — | |||||||||||
| Adjusted Gross Profit* | $ | 121,120 | $ | 107,454 | $ | 231,777 | $ | 202,634 | |||||||
| Adjusted Gross Profit Margin | 67.1% | 67.4% | 66.6% | 66.8% | |||||||||||
* Gross Profit and Adjusted Gross Profit were burdened by depreciation expense of
Adjusted Operating Income (Unaudited)
| Three Months Ended | Six Months Ended | ||||||||||||||
| (in thousands) | December 31, 2024 | December 31, 2023 | December 31, 2024 | December 31, 2023 | |||||||||||
| Income (Loss) from Operations | $ | 1,192 | $ | (26,175) | $ | (13,062) | $ | (49,547) | |||||||
| Operating Margin | 0.7% | (16.4)% | (3.8)% | (16.3)% | |||||||||||
| Amortization of intangible assets | 12,023 | 24,963 | 35,719 | 50,673 | |||||||||||
| Stock-based compensation expense | 16,141 | 23,049 | 28,806 | 35,964 | |||||||||||
| (Gain) loss on lease exit* | (6) | 115 | — | (29) | |||||||||||
| Corporate adjustments** | 2,442 | 1,345 | 3,129 | 2,156 | |||||||||||
| Adjusted Operating Income | $ | 31,792 | $ | 23,297 | $ | 54,592 | $ | 39,217 | |||||||
| Adjusted Operating Income Margin | 17.6% | 14.6% | 15.7% | 12.9% | |||||||||||
* Represents exit costs due to exiting leases of certain facilities.
** Corporate adjustments for the three and six months ended December 31, 2024 relate to professional costs associated with the Paychex merger of
Adjusted Operating Expenses (Unaudited)
| Three Months Ended | Six Months Ended | ||||||||||||||
| (in thousands) | December 31, 2024 | December 31, 2023 | December 31, 2024 | December 31, 2023 | |||||||||||
| Sales and Marketing expenses | $ | 60,137 | $ | 57,753 | $ | 116,926 | $ | 110,531 | |||||||
| Amortization of intangible assets | (1,058) | (1,058) | (2,117) | (2,117) | |||||||||||
| Stock-based compensation expense | (5,330) | (7,224) | (9,515) | (11,542) | |||||||||||
| Adjusted Sales and Marketing expenses | $ | 53,749 | $ | 49,471 | $ | 105,294 | $ | 96,872 | |||||||
| General and Administrative expenses | $ | 38,554 | $ | 56,173 | $ | 86,850 | $ | 104,922 | |||||||
| Amortization of intangible assets | (10,051) | (23,272) | (31,813) | (46,548) | |||||||||||
| Stock-based compensation expense | (6,051) | (9,951) | (10,837) | (15,023) | |||||||||||
| Gain (loss) on lease exit* | 6 | (115) | — | 29 | |||||||||||
| Corporate adjustments** | (2,442) | (1,345) | (3,108) | (2,156) | |||||||||||
| Adjusted General and Administrative expenses | $ | 20,016 | $ | 21,490 | $ | 41,092 | $ | 41,224 | |||||||
| Research and Development expenses | $ | 18,369 | $ | 16,665 | $ | 35,797 | $ | 30,720 | |||||||
| Stock-based compensation expense | (2,806) | (3,470) | (4,998) | (5,400) | |||||||||||
| Adjusted Research and Development expenses | $ | 15,563 | $ | 13,195 | $ | 30,799 | $ | 25,320 | |||||||
* Represents exit costs due to exiting leases of certain facilities.
** Corporate adjustments for the three and six months ended December 31, 2024 relate to professional costs associated with the Paychex merger of
Adjusted Net Income and Adjusted Net Income Per Share (Unaudited)
| Three Months Ended | Six Months Ended | ||||||||||||||
| (in thousands) | December 31, 2024 | December 31, 2023 | December 31, 2024 | December 31, 2023 | |||||||||||
| Net gain (loss) before benefit for income taxes | $ | 837 | $ | (29,073) | $ | (12,885) | $ | (52,758) | |||||||
| Amortization of intangible assets | 12,023 | 24,963 | 35,719 | 50,673 | |||||||||||
| Naming rights accretion expense | 1,006 | 1,031 | 2,012 | 2,061 | |||||||||||
| Change in fair value of deferred consideration | — | 2,816 | (112) | 2,816 | |||||||||||
| Stock-based compensation expense | 16,141 | 23,049 | 28,806 | 35,964 | |||||||||||
| (Gain) loss on lease exit* | (6) | 115 | — | (29) | |||||||||||
| Corporate adjustments** | 2,442 | 1,345 | 3,129 | 2,156 | |||||||||||
| Non-GAAP adjusted income before applicable income taxes | 32,443 | 24,246 | 56,669 | 40,883 | |||||||||||
| Income tax effect on adjustments*** | (7,462) | (5,577) | (13,034) | (9,403) | |||||||||||
| Adjusted Net Income | $ | 24,981 | $ | 18,669 | $ | 43,635 | $ | 31,480 | |||||||
| Adjusted Net Income Per Share | $ | 0.14 | $ | 0.11 | $ | 0.24 | $ | 0.18 | |||||||
| Adjusted shares outstanding**** | 180,681,049 | 177,740,047 | 179,772,462 | 177,537,308 | |||||||||||
* Represents exit costs due to exiting leases of certain facilities.
** Corporate adjustments for the three and six months ended December 31, 2024 relate to professional costs associated with the Paychex merger of
*** Non-GAAP adjusted income before applicable income taxes is tax effected using an adjusted effective income tax rate of
**** Adjusted shares outstanding for the three and six months ended December 31, 2024 and 2023 are based on the if-converted method and include potentially dilutive securities that are excluded from the U.S. GAAP dilutive net income per share calculation because including them in the computation of net income per share would have an anti-dilutive effect.
Adjusted Free Cash Flow and Adjusted Free Cash Flow Margin (Unaudited)
| Three Months Ended | Six Months Ended | ||||||||||||||
| (in thousands) | December 31, 2024 | December 31, 2023 | December 31, 2024 | December 31, 2023 | |||||||||||
| Net cash provided by operating activities | $ | 37,060 | $ | 26,166 | $ | 28,749 | $ | 37 | |||||||
| Purchase of property and equipment* | (418) | (633) | (1,587) | (2,068) | |||||||||||
| Internally developed software costs | (13,043) | (12,054) | (26,484) | (25,308) | |||||||||||
| Corporate adjustments** | 4,885 | 1,345 | 5,572 | 2,156 | |||||||||||
| Adjusted Free Cash Flow | $ | 28,484 | $ | 14,824 | $ | 6,250 | $ | (25,183) | |||||||
| Adjusted Free Cash Flow Margin | 15.8% | 9.3% | 1.8% | (8.3)% | |||||||||||
* Represents purchases of property & equipment, net of
** Corporate adjustments for the three and six months ended December 31, 2024 relate to contingent consideration of
FAQ
What is the value of Paychex's acquisition offer for Paycor (PYCR)?
What was Paycor's (PYCR) revenue growth in Q2 FY2025?
When is the Paycor (PYCR) and Paychex merger expected to close?
How did Paycor's (PYCR) operating profit change in Q2 FY2025?
