Paylocity Holding Corp (NASDAQ:PCTY) shares are down after it reported second-quarter FY24 results yesterday.

Total revenue increased 20% Y/Y to $326.4 million, beating the consensus of $324.7 million. Recurring & Other Revenue rose 16% Y/Y to $298.4 million in the quarter.

Adjusted operating income rose to $92.8 million from $65.1 million a year ago. Adjusted EPS of $1.49 beat the consensus of $1.28.

As of December 31, 2023, Paylocity had no long-term debt and had not drawn on its credit facility, along with cash and cash equivalents of $366.9 million.

Steve Beauchamp, Co-Chief Executive Officer, said, “Our differentiated value proposition of providing the most modern software in the industry continues to resonate in the marketplace as we saw total revenue growth of 20% and recurring revenue growth of 16% in Q2 of fiscal 24.”

“We also extended our AI leadership in the HCM industry with the launch of AI-driven personalized learning plans, optimized workforce schedules, and embedded generative AI within Rewards & Recognition and Performance Management to improve communication between employees and their managers.” 

Outlook: For the third quarter, the company expects revenue of $395.0 million-$399.0 million, up around 17% Y/Y (vs. consensus of $400.69 million), and adjusted EBITDA of $153.5 million to $156.5 million.

For FY24, Paylocity expects revenue of $1.384 billion to $1.389 billion, up around 18% Y/Y (vs. consensus of $1.41 billion), and adjusted EBITDA of $474.0 million to $478.0 million.

Price Action: PCTY shares are down 5.26% at $162.86 on the last check Friday.