Q4 Total revenues of $164.8 million, an increase of 18% year-over-year, while expanding operating margins Q4 Recurring revenues of $150.5 million, an increase of 17% year-over-year FY'24 Total revenues of $654.9 million, an increase of 19% year-over-year, while expanding operating margins FY'25 revenue guidance of $722.0 - $729.0 million, an increase of 11% year-over-year at the top end of the range CINCINNATI, Aug. 14, 2024 (GLOBE NEWSWIRE) -- Paycor HCM, Inc. (NASDAQ:PYCR) ("Paycor"), a leading provider of human capital management ("HCM") software, today announced financial results for the fourth quarter and full fiscal year 2024, which ended June 30, 2024. "Paycor delivered revenue growth of 18% for the quarter and 19% for the year, propelled by strong execution against our strategic growth initiatives to add employees and expand PEPM," said Raul Villar, Jr., Chief Executive Officer of Paycor. "We continued winning market share by delivering substantial value through our robust, modern HCM solution that powers people and performance." "We delivered meaningful adjusted operating income margin expansion year-over-year while strategically investing to differentiate our software and customer experience. This progress exhibits the scalability of our business model, and we remain confident in our ability to deliver attractive growth while driving significantly more operating leverage over the longer-term." Fourth Quarter Fiscal Year 2024 Financial Highlights Total revenues were $164.8 million, compared to $140.0 million for the fourth quarter of fiscal year 2023. Operating loss was $13.4 million, compared to $31.7 million for the fourth quarter of fiscal year 2023. Adjusted operating income* was $25.0 million, compared to $15.4 million for the fourth quarter of fiscal year 2023. Net loss was $18.3 million, compared to $29.4 million for the fourth quarter of fiscal year 2023. Adjusted net income* was $20.4 million, compared to $13.4 million for the fourth quarter of fiscal year 2023. *Adjusted operating income and adjusted net income 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. Fourth Quarter and Recent Business Highlights Launched new Compensation Management solution, enabling frontline leaders to streamline budgeting and pay cycles. Our collaborative tools foster alignment across teams, helping provide equitable and competitive compensation within budget while driving employee engagement. Advanced our interoperability strategy, empowering customers to seamlessly connect their data and systems by increasing the number of pre-built integrations and expanding API endpoints by over 40% in fiscal year 2024 to streamline custom integrations. Secured several new Embedded HCM Solution partners, efficiently expanding our distribution while providing a modern, holistic solution to customers. Fiscal Year 2024 Financial Highlights Total revenues were $654.9 million, compared to $552.7 million for the fiscal year 2023. Operating loss was $55.5 million, compared to $104.7 million for fiscal year 2023. Adjusted operating income* was $112.0 million, compared to $82.6 million for fiscal year 2023. Net loss attributable to Paycor HCM was $58.9 million, compared to $93.2 million for fiscal year 2023. Adjusted net income attributable to Paycor HCM* was $89.4 million, compared to $66.8 million for fiscal year 2023. Business Outlook Based on information as of today, August 14, 2024, Paycor is issuing the following financial guidance: First Quarter Ending September 30, 2024 Total revenues in the range of $161.0 - $163.0 million. Adjusted operating income* in the range of $17.5 - $18.5 million. Fiscal Year Ending June 30, 2025: Total revenues in the range of $722.0 - $729.0 million. Adjusted operating income* in the range of $123.0 - $126.0 million. *We are unable to reconcile forward-looking adjusted operating income to forward-looking income (loss) from operations, the most closely comparable GAAP financial measure, because the information needed to provide a complete reconciliation is unavailable at this time without unreasonable effort. Conference Call Information Paycor will host a conference call today, August 14, 2024, at 5:00 p.m. Eastern Time to discuss its financial results and guidance. To access this call, dial 1-877-407-4018 (domestic) or 1-201-689-8471 (international). The access code is 13741612. A live webcast and replay of the event will be available on the Paycor Investor Relations website at investors.paycor.com. About Paycor Paycor's human capital management (HCM) platform modernizes every aspect of people management, from recruiting, onboarding, and payroll to career development and retention, but what really sets us apart is our focus on leaders. For more than 30 years, we've been listening to and partnering with leaders, so we know what they need: a unified HR platform, easy integration with third party apps, powerful analytics, talent development tools, and configurable technology that supports specific industry needs. That's why more than 30,000 customers trust Paycor to help them solve problems and achieve their goals. 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. We believe that these risks include, but are not limited to: 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 and on the related teleconference call: 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 and discussed on the related teleconference call 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 Media Relations: Madeleine    Paycor HCM, Inc. and Subsidiaries Consolidated Balance Sheets (in thousands, except share amounts)     June 30,2024   June 30,2023 Assets (Unaudited)     Current assets:       Cash and cash equivalents $ 117,958     $ 95,233   Accounts receivable, net allowance for credit losses   48,164       30,820   Deferred contract costs   70,377       54,448   Prepaid expenses   12,749       10,448   Other current assets   3,458       2,581   Current assets before funds held for clients   252,706       193,530   Funds held for clients   1,109,136       1,049,156   Total current assets   1,361,842       1,242,686   Property and equipment, net   35,220       34,573   Operating lease right-of-use assets   14,417       16,834   Goodwill   766,653       767,738   Intangible assets, net   171,493       260,472   Capitalized software, net   67,376       53,983   Long-term deferred contract costs   189,826       162,657   Other long-term assets   2,566       2,232   Total assets $ 2,609,393     $ 2,541,175   Liabilities and Stockholders' Equity       Current liabilities:       Accounts payable $ 27,309     $ 28,350   Accrued expenses and other current liabilities   26,450       24,119   Accrued payroll and payroll related expenses   44,923       43,858   Deferred revenue   13,600       13,083   Current liabilities before client fund obligations   112,282       109,410   Client fund obligations   1,111,373       1,053,926   Total current liabilities   1,223,655       1,163,336   Deferred income taxes   16,019       18,047   Long-term operating leases   13,447       16,061   Other long-term liabilities   69,346       70,047   Total liabilities   1,322,467       1,267,491   Commitments and contingencies       Stockholders' equity:       Common stock $0.001 par value per share, 500,000,000 shares authorized, 178,210,263 shares outstanding at June 30, 2024 and 176,535,236 shares outstanding at June 30, 2023   178       177   Treasury stock, at cost, 10,620,260 shares at June 30, 2024 and June 30, 2023   (245,074 )     (245,074 ) Preferred stock, $0.001 par value, 50,000,000 shares authorized, — shares outstanding at June 30, 2024 and June 30, 2023   —       —   Additional paid-in capital   2,081,668       2,011,194   Accumulated deficit   (548,437 )     (489,495 ) Accumulated other comprehensive loss   (1,409 )     (3,118 ) Total stockholders' equity   1,286,926       1,273,684   Total liabilities and stockholders' equity $ 2,609,393     $ 2,541,175   Paycor HCM, Inc. and Subsidiaries Consolidated Statements of Operations (Unaudited) (in thousands, except share amounts)     Three Months Ended   Fiscal Year Ended   June 30,   June 30,   2024   2023   2024   2023 Revenues:               Recurring and other revenue $ 150,473     $ 128,966     $ 602,386     $ 518,874   Interest income on funds held for clients   14,327       11,077       52,562       33,818   Total revenues   164,800       140,043       654,948       552,692   Cost of revenues   57,996       48,448       223,235       187,140   Gross profit   106,804       91,595       431,713       365,552   Operating expenses:               Sales and marketing   56,679       56,487       223,049       212,094   General and administrative   47,853       52,445       202,696       203,850   Research and development   15,632       14,328