Paycor HCM (PYCR) Q4 2024 earnings summary

Executive summary

• FY'24 revenue reached $655 million, up 19% year-over-year, with 92% recurring revenue and strong new employee growth, driven by strategic initiatives and platform expansion.

• Increased average employees on platform by 9% and PEPM by 6% year-over-year; effective PEPM up 8% in Q4.

• Expanded sales team by 9%, focusing on top 50 U.S. cities, and increased sales coverage to 55%.

• Embedded HCM channel tripled partners year-over-year, with strong traction and pipeline growth.

• Product innovation and platform enhancements, including new compensation management and talent suite capabilities, contributed to growth.

Financial highlights

• Q4 total revenue: $165 million, up 18% year-over-year; FY'24 revenue: $655 million, up 19%.

• Adjusted operating income for Q4: $25 million (15.2% margin), up 60% year-over-year; FY'24: $112 million (17% margin), up 36%.

• Adjusted free cash flow for Q4: $37 million (23% margin); FY'24: $40 million (6% margin).

• Adjusted gross profit margin: 79% for Q4 and FY'24.

• Ended FY'24 with $118 million in cash and no debt.

Outlook and guidance

• FY'25 revenue guidance: $722–$729 million (up to 11.3% growth), including $48–$50 million interest income.

• Q1 FY'25 revenue guidance: $161–$163 million (up to 14% growth).

• FY'25 adjusted operating income: $123–$126 million (margin 17.0%–17.3%).

• New long-term adjusted free cash flow margin target: >20%.

• Guidance assumes flat labor market contribution and up to 200 bps of rate cuts.