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Paylocity (PCTY) Q3 Earnings, Revenues Surpass Estimates

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Wix.com (WIX) Q3 Earnings and Revenues Top Estimates

Wix.com (WIX) delivered earnings and revenue surprises of 56.00% and 1.88%, respectively, for the quarter ended September 2018. Do the numbers hold clues to what lies ahead for the stock?

Paylocity Holding PCTY reported third-quarter fiscal 2018 non-GAAP earnings of 52 cents per share, which surpassed the Zacks Consensus Estimate of 47 cents per share. Non-GAAP earnings also increased 30% from the year-ago quarter.

Quarter Details

The company’s revenues came in at $113.4 million, reflecting an increase of 25.6% year over year and beating the Zacks Consensus Estimate of $111 million.

The top line was also driven by a 25.8% rise in recurring revenues (95.7% of total revenues) and a 23.3% increase in implementation and other revenues.

The company’s non-GAAP gross profit came in at $79.6 million, up 29.1% year over year. Non-GAAP gross margin expanded 190 basis points (bps) year over year to 68.3%

Adjusted EBITDA increased 33.3% from the year-ago quarter to $35.8 million.

Paylocity exited the quarter with cash and cash equivalents of $129.5 million compared with $110 million in the previous quarter. The company has no long-term debt. It generated $35.2 million of cash flow from operational activities during the quarter compared with $26 million during the prior quarter.

Guidance

The company provided outlook for the fourth quarter and fiscal 2018. For the fourth quarter, Paylocity expects revenues in the range of $92.6-$93.6 million. The Zacks Consensus Estimate is pegged at $92.2 million. Adjusted EBITDA is projected in the band of $14-$15 million.

The company raised guidance for fiscal 2018. Paylocity now anticipates revenues in the range of $373.5-$374.5 million (previous guidance $369-$371 million). The Zacks Consensus Estimate is pegged at $370.3 million. Adjusted EBITDA is now projected in the range of $79.6¬$80.6 million (previous guidance $76-$77 million).

Paylocity Holding Corporation Price, Consensus and EPS Surprise

Paylocity Holding Corporation Price, Consensus and EPS Surprise | Paylocity Holding Corporation Quote

Conclusion

Management is particularly optimistic about the timely delivery of year-end tasks. Additionally, they are also banking on the completion of BeneFLEX acquisition, which has expanded the solutions suite and will eventually contribute to revenues.

Zacks Rank and Stocks to Consider

Currently, Paylocity carries a Zacks Rank #3 (Hold).

Some of the better-ranked stocks in the broader technology sector are Micron Technology, Inc. MU, Twitter, Inc. TWTR and Lam Research Corp. LRCX, all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here

Long-term EPS growth rate for Micron, Twitter and Lam Research is projected to be 10%, 23.1% and 17.7%, respectively.

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