Paycor HCM (PYCR) Q1 2025 earnings summary

Executive summary

• Q1 FY25 revenue increased 17% year-over-year to $167.5M, driven by higher effective PEPM, customer employee growth, and strategic investments in sales and product expansion.

• Recurring revenue grew 16% year-over-year to $154.0M, with average employees on platform up 4–5% and PEPM up 11%.

• Net loss narrowed to $7.3M from $20.6M, with adjusted operating income rising to $22.8M (13.6% margin), reflecting improved operating leverage.

• Product innovation included launches of AI-powered Paycor Assistant, Compensation Management, Time-Off Management, and an expanded integration platform with 300+ partners.

• Served approximately 31,000 clients and 2.6M employees as of September 30, 2024.

Financial highlights

• Q1 FY25 total revenue: $167.5M, up 17% year-over-year; recurring and other revenue: $154.0M, up 16%.

• Adjusted gross profit margin (excl. D&A): 79.2%; adjusted gross profit: $110.7M (66.1% margin).

• Adjusted operating income: $22.8M (13.6% margin), up from $15.9M (11.1% margin) year-over-year.

• Adjusted free cash flow was $(22.2)M, improved from $(40.0)M year-over-year; net cash used in operating activities was $(8.3)M, improved from $(26.1)M.

• Ended quarter with $97.6M–$98M in cash and no debt; $200M undrawn on revolving credit facility.

Outlook and guidance

• Q2 FY25 revenue guidance: $176M–$178M, with adjusted operating income of $26M–$27M.

• FY25 revenue guidance: $726M–$733M (up to 12% growth), with adjusted operating income of $127M–$130M.

• Anticipates 180 bps improvement in adjusted operating income margins for the year.