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Online payroll and human resource software provider Paycor (NASDAQ:PYCR) reported results in line with analysts' expectations in Q1 CY2024, with revenue up 15.8% year on year to $187 million. On the other hand, next quarter's revenue guidance of $161 million was less impressive, coming in 1.8% below analysts' estimates. It made a non-GAAP profit of $0.21 per share, improving from its profit of $0.18 per share in the same quarter last year.
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Paycor (PYCR) Q1 CY2024 Highlights:
- Revenue: $187 million vs analyst estimates of $186.4 million (small beat)
- EPS (non-GAAP): $0.21 vs analyst estimates of $0.20 (5.7% beat)
- Revenue Guidance for Q2 CY2024 is $161 million at the midpoint, below analyst estimates of $163.9 million
- Gross Margin (GAAP): 68.6%, down from 69.5% in the same quarter last year
- Free Cash Flow was -$1.02 million, down from $14.82 million in the previous quarter
- Market Capitalization: $3.19 billion
Found in 1990 in Cincinnati, Ohio, Paycor (NASDAQ: PYCR) provides software for small businesses to manage their payroll and HR needs in one place.
HR SoftwareModern HR software has two powerful benefits: cost savings and ease of use. For cost savings, businesses large and small much prefer the flexibility of cloud-based, web-browser-delivered software paid for on a subscription basis rather than the hassle and complexity of purchasing and managing on-premise enterprise software. On the usability side, the consumerization of business software creates seamless experiences whereby multiple standalone processes like payroll processing and compliance are aggregated into a single, easy-to-use platform.
Sales GrowthAs you can see below, Paycor's revenue growth has been strong over the last three years, growing from $99.84 million in Q3 2021 to $187 million this quarter.
This quarter, Paycor's quarterly revenue was once again up 15.8% year on year. We can see that Paycor's revenue increased by $27.48 million quarter on quarter, which is a solid improvement from the $15.95 million increase in Q4 CY2023. Shareholders should applaud the re-acceleration of growth.
Next quarter's guidance suggests that Paycor is expecting revenue to grow 15% year on year to $161 million, slowing down from the 26.2% year-on-year increase it recorded in the same quarter last year. Looking ahead, analysts covering the company were expecting sales to grow 15.8% over the next 12 months before the earnings results announcement.
Cash Is KingIf you've followed StockStory for a while, you know that we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can't use accounting profits to pay the bills. Paycor burned through $1.02 million of cash in Q1 despite being cash flow positive last year.
Paycor has burned through $6.91 million of cash over the last 12 months, resulting in a negative 1.1% free cash flow margin. This low FCF margin stems from Paycor's constant need to reinvest in its business to stay competitive.
Key Takeaways from Paycor's Q1 Results We were impressed by Paycor's strong gross margin improvement this quarter. On the other hand, its revenue guidance missed analysts' expectations and cash flow turned negative year on year. Overall, the results could have been better. The stock is flat after reporting and currently trades at $17.5 per share.s