Artificial Intelligence
Paylocity Announces Fourth Quarter and full Fiscal Year 2023 Financial Results
- Q4 2023 Recurring & Other Revenue of $282.0 million, up 24% year-over-year
- Q4 2023 Total Revenue of $308.5 million, up 35% year-over-year
- FY 2023 Recurring & Other Revenue of $1,098.0 million, up 30% year-over-year
- FY 2023 Total Revenue of $1,174.6 million, up 38% year-over-year
SCHAUMBURG, Ill., Aug. 03, 2023 (GLOBE NEWSWIRE) — Paylocity Holding Corporation (Nasdaq: PCTY), a leading provider of cloud-based HCM and payroll software solutions, today announced financial results for the fourth quarter and full fiscal year 2023, which ended June 30, 2023.
“Recurring & other revenue grew 30% in fiscal 23 as we continue to provide the most modern software in the industry. Our sustained investment in product development allows us to continue to expand our product suite, evidenced by the recent announcement of several new premium offerings and feature enhancements including Advanced Scheduling, Learning Management, and Market Pay. We’re also proud to see our commitment to ongoing product innovation recognized in the marketplace with Paylocity recently being named as a Leader in NelsonHall’s 2023 Next-Generation HCM Technology NEAT report for both the Small / Medium and Mid / Large market segments,” said Steve Beauchamp, Co-Chief Executive Officer of Paylocity.
Key Recent Achievements
- FY 2023 Recurring & Other Revenue of $1,098.0 million, up 30% year-over-year.
- FY 2023 Total Revenue of $1,174.6 million, up 38% year-over-year.
- FY 2023 GAAP net income increased 55% to $140.8 million from $90.8 million in FY 2022 and $2.49 per diluted share from $1.61 in FY 2022.
- FY 2023 Adjusted EBITDA, a non-GAAP measure, increased 58% to $375.2 million from $237.8 million in FY 2022, or 31.9% of total revenue compared to 27.9% in FY 2022.
- FY 2023 Net cash provided by operating activities of $282.7 million.
- FY 2023 Free Cash Flow, a non-GAAP measure, of $215.8 million or 18.4% of total revenue.
- Ending FY 2023 cash and cash equivalents balance of $288.8 million.
- Updated financial targets given sustained revenue growth, increasing profitability and scale.
| Long-Term Financial Targets (1)(2) | |||
| Previous Target | Updated Target | ||
| Total revenue growth | 20% + | 20% + | |
| Adjusted gross profit | 70 – 75% | 75 – 80% | |
| Non-GAAP total research and development | 10 – 15% | 10 – 15% | |
| Non-GAAP sales and marketing | 20 – 25% | 20 – 25% | |
| Non-GAAP general and administrative | 10 – 15% | 5 – 10% | |
| Adjusted EBITDA | 30 – 35% | 35 – 40% | |
| Free Cash Flow | 15 – 20% | 20 – 25% | |
(1) Financial targets except revenue growth based on percentage of total revenue.
(2) We are unable to reconcile forward-looking non-GAAP long-term financial targets to their directly comparable GAAP financial measures because the information which is needed to complete the reconciliations is unavailable at this time without unreasonable effort.
Fourth Quarter Fiscal 2023 Financial Highlights
Revenue:
- Total revenue was $308.5 million, an increase of 35% from the fourth quarter of fiscal year 2022.
- Recurring & other revenue was $282.0 million, an increase of 24% from the fourth quarter of fiscal year 2022.
Operating Income:
- GAAP operating income was $49.4 million and Non-GAAP operating income was $84.0 million in the fourth quarter of fiscal year 2023.
Net Income:
- GAAP net income was $37.3 million or $0.66 per share in the fourth quarter of fiscal year 2023 based on 56.7 million diluted weighted average common shares outstanding.
Adjusted EBITDA:
- Adjusted EBITDA, a non-GAAP measure, was $100.6 million in the fourth quarter of fiscal year 2023.
Fiscal Year 2023 Financial Highlights
Revenue:
- Total revenue was $1,174.6 million, an increase of 38% from fiscal year 2022.
- Recurring & other revenue was $1,098.0 million, representing 93% of total revenue and an increase of 30% from fiscal year 2022 recurring & other revenue.
Operating Income:
- GAAP operating income was $155.0 million and non-GAAP operating income was $320.9 million in fiscal year 2023.
Net Income:
- GAAP net income was $140.8 million or $2.49 per share for fiscal year 2023, based on 56.6 million diluted weighted average common shares outstanding.
Adjusted EBITDA:
- Adjusted EBITDA, a non-GAAP measure, was $375.2 million for fiscal year 2023.
Balance Sheet and Cash Flow:
- Cash and cash equivalents totaled $288.8 million at the end of fiscal year 2023.
- Net cash provided by operating activities for the fiscal year 2023 was $282.7 million compared to $155.1 million for fiscal year 2022.
- Free cash flow, a non-GAAP measure, was $215.8 million or 18.4% of total revenue for fiscal year 2023.
A reconciliation of GAAP to non-GAAP financial measures has been provided in this press release, including the accompanying tables. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures.”
Business Outlook
Based on information available as of August 3, 2023, Paylocity is issuing guidance for the first quarter and full fiscal year 2024 as indicated below.
First Quarter 2024:
- Total revenue is expected to be in the range of $314.1 million to $318.1 million, which represents approximately 25% growth over fiscal year 2023 first quarter total revenue.
- Adjusted EBITDA, a non-GAAP measure, is expected to be in the range of $89.5 million to $92.5 million.
Fiscal Year 2024:
- Total revenue is expected to be in the range of $1.405 billion to $1.410 billion, which represents approximately 20% growth over fiscal year 2023 total revenue.
- Adjusted EBITDA, a non-GAAP measure, is expected to be in the range of $464.0 million to $468.0 million.
We are unable to reconcile forward-looking non-GAAP financial measures included in our guidance to their directly comparable GAAP financial measures because the information which is needed to complete the reconciliations is unavailable at this time without unreasonable effort.
Conference Call Details
Paylocity will host a conference call to discuss its fourth quarter and full fiscal year 2023 results at 4:30 p.m. Central Time today (5:30 Eastern Time). A live audio webcast of the conference call, together with detailed financial information, can be accessed through https://investors.paylocity.com/events-and-presentations where you will be provided with dial in details. A replay of the call will be available and archived via webcast at https://investors.paylocity.com/.
About Paylocity
Paylocity is a leading provider of cloud-based HCM and payroll software solutions headquartered in Schaumburg, IL. Founded in 1997 and publicly traded since 2014, Paylocity offers an intuitive, easy-to-use product suite that helps businesses tackle today’s challenges while moving them toward the promise of tomorrow. Known for its unique culture and consistently recognized as one of the best places to work, Paylocity accompanies its clients on the journey to create great workplaces and help people achieve their best through automation, data-driven insights, and engagement. For more information, visit www.paylocity.com.
Non-GAAP Financial Measures
The company uses certain non-GAAP financial measures in this release, including Adjusted EBITDA, Adjusted EBITDA margin, adjusted gross profit, adjusted gross profit margin, non-GAAP operating income, non-GAAP net income, non-GAAP net income per share, non-GAAP sales and marketing and non-GAAP sales and marketing margin, non-GAAP total research and development and non-GAAP total research and development margin, non-GAAP general and administrative and non-GAAP general and administrative margin, free cash flow and free cash flow margin. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position or cash flow that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. We define Adjusted EBITDA as net income (loss) before interest expense, income tax expense (benefit), and depreciation and amortization expense, adjusted to eliminate stock-based compensation expense and employer payroll taxes related to stock releases and option exercises and other items as described later in this release. We calculate Adjusted EBITDA margin as adjusted EBITDA as described in the preceding sentence divided by total revenues. Adjusted gross profit is adjusted to eliminate stock-based compensation expense and employer payroll taxes related to stock releases and option exercises and amortization of capitalized internal-use software costs and certain acquired intangibles. Adjusted gross profit margin is calculated as adjusted gross profit as described in the preceding sentence divided by total revenues. Non-GAAP operating income is adjusted to eliminate stock-based compensation expense and employer payroll taxes related to stock releases and option exercises, the amortization of acquired intangibles and other items as described later in this release. Non-GAAP sales and marketing expense is adjusted to eliminate stock-based compensation expense and employer payroll taxes related to stock releases and option exercises and other items as described later in this release. Non-GAAP sales and marketing margin is calculated by dividing non-GAAP sales and marketing by total revenues. Non-GAAP general and administrative expense is adjusted to eliminate stock-based compensation expense and employer payroll taxes related to stock releases and option exercises, the amortization of certain acquired intangibles and other items as described later in this release. Non-GAAP general and administrative margin is calculated by dividing non-GAAP general and administrative margin by total revenues. Non-GAAP net income and non-GAAP net income per share are adjusted to eliminate stock-based compensation expense and employer payroll taxes related to stock releases and option exercises, the amortization of acquired intangibles and other items as described later in this release, including the income tax effect on these items. Non-GAAP total research and development is adjusted for capitalized internal-use software costs paid and to eliminate stock-based compensation expense and employer payroll taxes related to stock releases and option exercises and other items as described later in this release. Non-GAAP total research and development margin is calculated by dividing non-GAAP total research and development by total revenues. Free cash flow is defined as net cash provided by operating activities less capitalized internal-use software costs, purchase of property and equipment and lease allowances used for tenant improvements. Free cash flow margin is calculated by dividing free cash flow as defined in the preceding sentence divided by total revenues. Please note that other companies may define their non-GAAP financial measures differently than we do. Management presents certain non-GAAP financial measures in this release because it considers them to be important supplemental measures of performance. Management uses these non-GAAP financial measures for planning purposes, including analysis of the company’s performance against prior periods, the preparation of operating budgets and to determine appropriate levels of operating and capital investments. Management believes that these non-GAAP financial measures provide additional insight for analysts and investors in evaluating the company’s financial and operational performance. Management also intends to provide these non-GAAP financial measures as part of the company’s future earnings discussions and, therefore, the inclusion of the non-GAAP financial measures should provide consistency in the company’s financial reporting. Non-GAAP financial measures have limitations as an analytical tool. Investors are encouraged to review the reconciliation of the non-GAAP measures to their most directly comparable GAAP measures provided in this release.
Safe Harbor/Forward Looking Statements
This press release contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, included herein regarding Paylocity’s future operations, ability to scale its business, future financial position and performance, future revenues, projected costs, prospects, plans and objectives of management are forward-looking statements. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “will,” “would,” “seek” and similar expressions (or the negative of these terms) are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements include, among other things, statements about management’s estimates regarding future revenues and financial performance, long-term financial targets and other statements about management’s beliefs, intentions or goals. Paylocity may not actually achieve the expectations disclosed in the forward-looking statements, and you should not place undue reliance on Paylocity’s forward-looking statements. These forward-looking statements involve risks and uncertainties that could cause actual results or events to differ materially from the expectations disclosed in the forward-looking statements, including, but not limited to the general economic conditions in regions in which Paylocity does business, changes in interest rates, business disruptions, reductions in employment and an increase in business failures that have occurred or may occur in the future; Paylocity’s ability to leverage AI Assist and other forms of artificial intelligence and machine learning in its technology, which may be constrained by current and future laws, regulations, interpretive positions or standards governing new and evolving technologies and ethical considerations that could restrict or impose burdensome and costly requirements on its ability to continue to leverage data in innovative ways; Paylocity’s ability to retain existing clients and to attract new clients to enter into subscriptions for its services; the challenges associated with a growing company’s ability to effectively service clients in a dynamic and competitive market; challenges associated with expanding and evolving a sales organization to effectively address new geographies and products and services; challenges related to cybersecurity threats and evolving cybersecurity regulations; Paylocity’s reliance on and ability to expand its referral network of third parties; Paylocity’s reliance on third party payroll partners in foreign jurisdictions in its Blue Marble business; difficulties associated with accurately forecasting revenue and appropriately planning expenses; challenges with managing growth effectively; risks related to regulatory, legislative and judicial uncertainty in Paylocity’s markets; Paylocity’s ability to protect and defend its intellectual property; the risk that Paylocity’s security measures are compromised or a threat actor gains unauthorized access to customer data; unexpected events in the market for Paylocity’s solutions; changes in the competitive environment in Paylocity’s industry and the markets in which it operates; adverse changes in general economic or market conditions; changes in the employment rates of Paylocity’s clients and the resultant impact on revenue; the possibility that Paylocity may be adversely affected by other economic, business, and/or competitive factors; and other risks and potential factors that could affect Paylocity’s business and financial results identified in Paylocity’s filings with the Securities and Exchange Commission (the “SEC”), including its 10-K filed with the SEC on August 5, 2022. Additional information will also be set forth in Paylocity’s future quarterly reports on Form 10-Q, annual reports on Form 10-K and other filings that Paylocity makes with the SEC. These forward-looking statements represent Paylocity’s expectations as of the date of this press release. Subsequent events may cause these expectations to change, and Paylocity disclaims any obligations to update or alter these forward-looking statements in the future, whether as a result of new information, future events or otherwise.
| PAYLOCITY HOLDING CORPORATION | |||||||
| Consolidated Balance Sheets | |||||||
| (in thousands, except per share data) | |||||||
| June 30, | |||||||
| 2022 | 2023 | ||||||
| Assets | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 139,756 | $ | 288,767 | |||
| Accounts receivable, net | 15,754 | 25,085 | |||||
| Deferred contract costs | 59,501 | 78,109 | |||||
| Prepaid expenses and other | 28,896 | 35,061 | |||||
| Total current assets before funds held for clients | 243,907 | 427,022 | |||||
| Funds held for clients | 3,987,776 | 2,621,415 | |||||
| Total current assets | 4,231,683 | 3,048,437 | |||||
| Capitalized internal-use software, net | 61,985 | 86,127 | |||||
| Property and equipment, net | 62,839 | 64,069 | |||||
| Operating lease right-of-use assets | 49,210 | 44,067 | |||||
| Intangible assets, net | 45,475 | 34,527 | |||||
| Goodwill | 101,949 | 102,054 | |||||
| Long-term deferred contract costs | 229,067 | 294,222 | |||||
| Long‑term prepaid expenses and other | 7,746 | 6,331 | |||||
| Deferred income tax assets | 19,060 | 15,846 | |||||
| Total assets | $ | 4,809,014 | $ | 3,695,680 | |||
| Liabilities and Stockholders’ Equity | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 8,374 | $ | 6,153 | |||
| Accrued expenses | 124,384 | 143,287 | |||||
| Total current liabilities before client fund obligations | 132,758 | 149,440 | |||||
| Client fund obligations | 3,987,776 | 2,625,355 | |||||
| Total current liabilities | 4,120,534 | 2,774,795 | |||||
| Long-term operating lease liabilities | 69,119 | 62,471 | |||||
| Other long-term liabilities | 3,681 | 3,731 | |||||
| Deferred income tax liabilities | 2,217 | 11,820 | |||||
| Total liabilities | $ | 4,195,551 | $ | 2,852,817 | |||
| Stockholders’ equity: | |||||||
| Preferred stock, $0.001 par value, 5,000 authorized, no shares issued and outstanding at June 30, 2022 and June 30, 2023 | $ | — | $ | — | |||
| Common stock, $0.001 par value, 155,000 shares authorized at June 30, 2022 and June 30, 2023; 55,190 shares issued and outstanding at June 30, 2021 and 55,912 shares issued and outstanding at June 30, 2023 | 55 | 56 | |||||
| Additional paid-in capital | 289,843 | 380,632 | |||||
| Retained earnings | 325,868 | 466,690 | |||||
| Accumulated other comprehensive loss | (2,303 | ) | (4,515 | ) | |||
| Total stockholders’ equity | $ | 613,463 | $ | 842,863 | |||
| Total liabilities and stockholders’ equity | $ | 4,809,014 | $ | 3,695,680 | |||
| PAYLOCITY HOLDING CORPORATION | |||||||||||||||
| Consolidated Statements of Operations and Comprehensive Income | |||||||||||||||
| (in thousands, except per share data) | |||||||||||||||
| Three Months Ended June 30, |
Year Ended June 30, |
||||||||||||||
| 2022 | 2023 | 2022 | 2023 | ||||||||||||
| Revenues: | |||||||||||||||
| Recurring and other revenue | $ | 226,867 | $ | 282,026 | $ | 847,694 | $ | 1,098,036 | |||||||
| Interest income on funds held for clients | 2,080 | 26,427 | 4,957 | 76,562 | |||||||||||
| Total revenues | 228,947 | 308,453 | 852,651 | 1,174,598 | |||||||||||
| Cost of revenues | 77,394 | 96,706 | 287,002 | 367,039 | |||||||||||
| Gross profit | 151,553 | 211,747 | 565,649 | 807,559 | |||||||||||
| Operating expenses: | |||||||||||||||
| Sales and marketing | 59,599 | 75,895 | 214,455 | 296,716 | |||||||||||
| Research and development | 28,884 | 40,549 | 102,908 | 163,994 | |||||||||||
| General and administrative | 44,244 | 45,951 | 163,692 | 191,823 | |||||||||||
| Total operating expenses | 132,727 | 162,395 | 481,055 | 652,533 | |||||||||||
| Operating income | 18,826 | 49,352 | 84,594 | 155,026 | |||||||||||
| Other income (expense) | (197 | ) | 2,617 | (997 | ) | 3,588 | |||||||||
| Income before income taxes | 18,629 | 51,969 | 83,597 | 158,614 | |||||||||||
| Income tax expense (benefit) | 3,483 | 14,715 | (7,180 | ) | 17,792 | ||||||||||
| Net income | $ | 15,146 | $ | 37,254 | $ | 90,777 | $ | 140,822 | |||||||
| Other comprehensive loss, net of tax | (741 | ) | (2,275 | ) | (2,369 | ) | (2,212 | ) | |||||||
| Comprehensive income | $ | 14,405 | $ | 34,979 | $ | 88,408 | $ | 138,610 | |||||||
| Net income per share: | |||||||||||||||
| Basic | $ | 0.27 | $ | 0.67 | $ | 1.65 | $ | 2.53 | |||||||
| Diluted | $ | 0.27 | $ | 0.66 | $ | 1.61 | $ | 2.49 | |||||||
| Weighted-average shares used in computing net income per share: | |||||||||||||||
| Basic | 55,157 | 55,864 | 55,036 | 55,706 | |||||||||||
| Diluted | 56,432 | 56,665 | 56,445 | 56,596 | |||||||||||
Stock-based compensation expense and employer payroll taxes related to stock releases and option exercises for each of the three and twelve months ended June 30 are included in the above line items:
| Three Months Ended June 30, |
Year Ended June 30, |
||||||||||
| 2022 | 2023 | 2022 | 2023 | ||||||||
| Cost of revenues | $ | 2,778 | $ | 3,750 | $ | 12,610 | $ | 18,446 | |||
| Sales and marketing | 5,947 | 7,967 | 22,929 | 38,376 | |||||||
| Research and development | 4,814 | 8,020 | 19,945 | 38,719 | |||||||
| General and administrative | 12,704 | 12,276 | 45,625 | 58,964 | |||||||
| Total stock-based compensation expense and employer payroll taxes related to stock releases and option exercises | $ | 26,243 | $ | 32,013 | $ | 101,109 | $ | 154,505 | |||
| PAYLOCITY HOLDING CORPORATION | |||||||||||
| Consolidated Statements of Cash Flows | |||||||||||
| (in thousands) | |||||||||||
| Year Ended June 30, | |||||||||||
| 2021 | 2022 | 2023 | |||||||||
| Cash flows from operating activities: | |||||||||||
| Net income | $ | 70,819 | $ | 90,777 | $ | 140,822 | |||||
| Adjustments to reconcile net income to net cash provided by operating activities | |||||||||||
| Stock-based compensation expense | 63,052 | 96,202 | 147,300 | ||||||||
| Depreciation and amortization expense | 42,972 | 50,218 | 60,866 | ||||||||
| Deferred income tax expense (benefit) | (13,642 | ) | (7,180 | ) | 13,540 | ||||||
| Provision for credit losses | 316 | 311 | 1,245 | ||||||||
| Net amortization of premiums (accretion of discounts) on available-for-sale securities | 347 | 381 | (5,412 | ) | |||||||
| Amortization of debt issuance costs | 171 | 185 | 286 | ||||||||
| Other | 632 | 318 | 1,396 | ||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Accounts receivable | (1,654 | ) | (7,605 | ) | (9,407 | ) | |||||
| Deferred contract costs | (56,850 | ) | (73,263 | ) | (80,781 | ) | |||||
| Prepaid expenses and other | (4,004 | ) | (14,767 | ) | (3,994 | ) | |||||
| Accounts payable | 2,394 | 2,553 | (1,554 | ) | |||||||
| Accrued expenses and other | 20,297 | 16,923 | 18,416 | ||||||||
| Net cash provided by operating activities | 124,850 | 155,053 | 282,723 | ||||||||
| Cash flows from investing activities: | |||||||||||
| Purchases of available-for-sale securities and other | — | (433,962 | ) | (598,895 | ) | ||||||
| Proceeds from sales and maturities of available-for-sale securities | 101,467 | 116,848 | 446,751 | ||||||||
| Capitalized internal-use software costs | (28,594 | ) | (34,515 | ) | (45,004 | ) | |||||
| Purchases of property and equipment | (9,461 | ) | (18,069 | ) | (21,910 | ) | |||||
| Acquisitions of businesses, net of cash acquired | (14,992 | ) | (107,576 | ) | — | ||||||
| Other investing activities | — | (2,500 | ) | (1,104 | ) | ||||||
| Net cash provided by (used in) investing activities | 48,420 | (479,774 | ) | (220,162 | ) | ||||||
| Cash flows from financing activities: | |||||||||||
| Net change in client fund obligations | 432,373 | 2,228,038 | (1,362,421 | ) | |||||||
| Borrowings under credit facility | — | 50,000 | — | ||||||||
| Repayment of credit facility | (100,000 | ) | (50,000 | ) | — | ||||||
| Proceeds from exercise of stock options | 146 | — | — | ||||||||
| Proceeds from employee stock purchase plan | 12,214 | 14,103 | 16,916 | ||||||||
| Taxes paid related to net share settlement of equity awards | (64,191 | ) | (69,761 | ) | (88,312 | ) | |||||
| Payment of debt issuance costs | (64 | ) | (87 | ) | (885 | ) | |||||
| Net cash provided by (used in) financing activities | 280,478 | 2,172,293 | (1,434,702 | ) | |||||||
| Net change in cash, cash equivalents and funds held for clients’ cash and cash equivalents | 453,748 | 1,847,572 | (1,372,141 | ) | |||||||
| Cash, cash equivalents and funds held for clients’ cash and cash equivalents—beginning of year | 1,492,133 | 1,945,881 | 3,793,453 | ||||||||
| Cash, cash equivalents and funds held for clients’ cash and cash equivalents—end of year | $ | 1,945,881 | $ | 3,793,453 | $ | 2,421,312 | |||||
| Supplemental Disclosure of Non-Cash Investing and Financing Activities | |||||||||||
| Purchases of property and equipment and internal-use software, accrued but not paid | $ | 581 | $ | 2,052 | $ | — | |||||
| Liabilities assumed for acquisitions | $ | 281 | $ | 4,581 | $ | 117 | |||||
| Supplemental Disclosure of Cash Flow Information | |||||||||||
| Cash paid for interest | $ | 870 | $ | 311 | $ | 404 | |||||
| Cash paid (refunds received) for income taxes | $ | (136 | ) | $ | 11 | $ | 1,359 | ||||
| Reconciliation of cash, cash equivalents and funds held for clients’ cash and cash equivalents to the Consolidated Balance Sheets | |||||||||||
| Cash and cash equivalents | $ | 202,287 | $ | 139,756 | $ | 288,767 | |||||
| Funds held for clients’ cash and cash equivalents | 1,743,594 | 3,653,697 | 2,132,545 | ||||||||
| Total cash, cash equivalents and funds held for clients’ cash and cash equivalents | $ | 1,945,881 | $ | 3,793,453 | $ | 2,421,312 | |||||
| Paylocity Holding Corporation | |||||||||||
| Reconciliation of GAAP to non-GAAP Financial Measures | |||||||||||
| (In thousands except per share data) | |||||||||||
| Three Months Ended June 30, |
Year Ended June 30, |
||||||||||
| 2022 | 2023 | 2022 | 2023 | ||||||||
| Reconciliation from Gross profit to Adjusted gross profit: | |||||||||||
| Gross profit | $ | 151,553 | $ | 211,747 | $ | 565,649 | $ | 807,559 | |||
| Amortization of capitalized internal-use software costs | 6,744 | 8,936 | 25,267 | 31,440 | |||||||
| Amortization of certain acquired intangibles | 1,853 | 1,853 | 1,853 | 7,414 | |||||||
| Stock-based compensation expense and employer payroll taxes related to stock releases and option exercises | 2,778 | 3,750 | 12,610 | 18,446 | |||||||
| Other items (1) | 27 | — | 121 | 19 | |||||||
| Adjusted gross profit | $ | 162,955 | $ | 226,286 | $ | 605,500 | $ | 864,878 | |||
| Three Months Ended June 30, |
Year Ended June 30, |
||||||||||
| 2022 | 2023 | 2022 | 2023 | ||||||||
| Reconciliation from Operating income to Non-GAAP Operating income: | |||||||||||
| Operating income | $ | 18,826 | $ | 49,352 | $ | 84,594 | $ | 155,026 | |||
| Stock-based compensation expense and employer payroll taxes related to stock releases and option exercises | 26,243 | 32,013 | 101,109 | 154,505 | |||||||
| Amortization of acquired intangibles | 2,770 | 2,637 | 8,752 | 10,948 | |||||||
| Other items (2) | 561 | — | 2,170 | 446 | |||||||
| Non-GAAP Operating income | $ | 48,400 | $ | 84,002 | $ | 196,625 | $ | 320,925 | |||
| Three Months Ended June 30, |
Year Ended June 30, |
||||||||||||
| 2022 | 2023 | 2022 | 2023 | ||||||||||
| Reconciliation from Net income to Non-GAAP Net income: | |||||||||||||
| Net income | $ | 15,146 | $ | 37,254 | $ | 90,777 | $ | 140,822 | |||||
| Stock-based compensation expense and employer payroll taxes related to stock releases and option exercises | 26,243 | 32,013 | 101,109 | 154,505 | |||||||||
| Amortization of acquired intangibles | 2,770 | 2,637 | 8,752 | 10,948 | |||||||||
| Other items (2) | 561 | — | 2,378 | 446 | |||||||||
| Income tax effect on adjustments (3) | 662 | 2,896 | (19,398 | ) | (15,003 | ) | |||||||
| Non-GAAP Net income | $ | 45,382 | $ | 74,800 | $ | 183,618 | $ | 291,718 | |||||
| Three Months Ended June 30, |
Year Ended June 30, |
||||||||||
| 2022 | 2023 | 2022 | 2023 | ||||||||
| Calculation of Non-GAAP Net income per share: | |||||||||||
| Non-GAAP Net income | $ | 45,382 | $ | 74,800 | $ | 183,618 | $ | 291,718 | |||
| Diluted weighted-average number of common shares | 56,432 | 56,665 | 56,445 | 56,596 | |||||||
| Non-GAAP Net income per share | $ | 0.80 | $ | 1.32 | $ | 3.25 | $ | 5.15 | |||
| Three Months Ended June 30, |
Year Ended June 30, |
|||||||||||
| 2022 | 2023 | 2022 | 2023 | |||||||||
| Reconciliation from Net income to Adjusted EBITDA | ||||||||||||
| Net income | $ | 15,146 | $ | 37,254 | $ | 90,777 | $ | 140,822 | ||||
| Interest expense | 112 | 188 | 498 | 752 | ||||||||
| Income tax expense (benefit) | 3,483 | 14,715 | (7,180 | ) | 17,792 | |||||||
| Depreciation and amortization expense | 13,799 | 16,385 | 50,218 | 60,866 | ||||||||
| EBITDA | 32,540 | 68,542 | 134,313 | 220,232 | ||||||||
| Stock-based compensation expense and employer payroll taxes related to stock releases and option exercises | 26,243 | 32,013 | 101,109 | 154,505 | ||||||||
| Other items (2) | 561 | — | 2,378 | 446 | ||||||||
| Adjusted EBITDA | $ | 59,344 | $ | 100,555 | $ | 237,800 | $ | 375,183 | ||||
| Three Months Ended June 30, |
Year Ended June 30, |
||||||||||
| 2022 | 2023 | 2022 | 2023 | ||||||||
| Reconciliation of Non-GAAP sales and marketing: | |||||||||||
| Sales and marketing | $ | 59,599 | $ | 75,895 | $ | 214,455 | $ | 296,716 | |||
| Stock-based compensation expense and employer payroll taxes related to stock releases and option exercises | 5,947 | 7,967 | 22,929 | 38,376 | |||||||
| Other items (1) | 32 | — | 194 | 22 | |||||||
| Non-GAAP sales and marketing | $ | 53,620 | $ | 67,928 | $ | 191,332 | $ | 258,318 | |||
| Three Months Ended June 30, |
Year Ended June 30, |
||||||||||
| 2022 | 2023 | 2022 | 2023 | ||||||||
| Reconciliation of Non-GAAP total research and development: | |||||||||||
| Research and development | $ | 28,884 | $ | 40,549 | $ | 102,908 | $ | 163,994 | |||
| Capitalized internal-use software costs | 8,230 | 14,278 | 34,515 | 45,004 | |||||||
| Stock-based compensation expense and employer payroll taxes related to stock releases and option exercises | 4,814 | 8,020 | 19,945 | 38,719 | |||||||
| Other items (1) | 204 | — | 890 | 399 | |||||||
| Non-GAAP total research and development | $ | 32,096 | $ | 46,807 | $ | 116,588 | $ | 169,880 | |||
| Three Months Ended June 30, |
Year Ended June 30, |
||||||||||
| 2022 | 2023 | 2022 | 2023 | ||||||||
| Reconciliation of Non-GAAP general and administrative: | |||||||||||
| General and administrative | $ | 44,244 | $ | 45,951 | $ | 163,692 | $ | 191,823 | |||
| Stock-based compensation expense and employer payroll taxes related to stock releases and option exercises | 12,704 | 12,276 | 45,625 | 58,964 | |||||||
| Amortization of certain acquired intangibles | 917 | 784 | 6,899 | 3,534 | |||||||
| Other items (2) | 298 | — | 965 | 6 | |||||||
| Non-GAAP general and administrative | $ | 30,325 | $ | 32,891 | $ | 110,203 | $ | 129,319 | |||
| Year Ended June 30, |
|||||||
| 2022 | 2023 | ||||||
| Reconciliation of Free Cash Flow: | |||||||
| Net cash provided by operating activities | $ | 155,053 | $ | 282,723 | |||
| Capitalized internal-use software costs | (34,515 | ) | (45,004 | ) | |||
| Purchases of property and equipment | (18,069 | ) | (21,910 | ) | |||
| Free Cash Flow | $ | 102,469 | $ | 215,809 | |||
(1) Represents acquisition-related costs.
(2) Represents acquisition and other nonrecurring transaction-related costs and lease exit activity.
(3) Includes the income tax effect on non-GAAP net income adjustments related to stock-based compensation expense and employer payroll taxes related to stock releases and option exercises, amortization of acquired intangibles and other items, which include acquisition and other nonrecurring transaction-related costs and lease exit activity.
Artificial Intelligence
Lucinity’s AI Innovation Recognized at Microsoft’s Prestigious Global Partner Awards 2024
REYKJAVIK, Iceland, June 28, 2024 /PRNewswire/ — Lucinity has been recognized as a finalist in the AI Innovation category at the prestigious Microsoft Global Partner Awards 2024, recognizing its breakthrough AI solution and contribution to financial security through its collaboration with Microsoft.
Lucinity beat more than 4,700 companies to be named a finalist at the annual Microsoft Global Partner Awards, which highlights Lucinity’s achievements as a Microsoft partner in optimizing business processes, improving customer experiences, and opening new pathways for digital transformation.
This achievement comes in addition to winning two prestigious awards at Microsoft Partner Awards 2024 last month, including Partner of the Year – Iceland, and the Sustainability and Social Impact award.
The accolade recognizes Lucinity’s significant advancements in AI for financial crime operations, particularly through their AI-powered copilot, Luci. This innovative solution utilizes Microsoft Azure OpenAI technology to integrate advanced generative AI into financial crime investigations and regulatory compliance, optimizing processes and saving significant time and resources for financial institutions.
The Lucinity platform streamlines compliance, provides instant insights, and reduces typical investigation times from three hours to just 30 minutes. The technology can also save financial institutions an estimated $100 million in productivity savings, as well as savings in training and recruitment.
Microsoft comments on Lucinity’s award recognition, saying “Financial crime profoundly impacts our global community, with far-reaching economic, security, and social implications. It can harm a country’s reputation and increase exposure to criminal activities, emphasizing the critical need for robust anti-money laundering initiatives and persistent vigilance. Lucinity, with their innovative AI solutions, has really tried to combat this huge global challenge. They use ‘Human AI’ to enhance financial crime prevention, combining AI with human expertise for efficient, user-friendly solutions. Additionally, Lucinity has developed a tool called Luci, an AI-powered copilot that helps transform financial crime prevention from a process that took hours to one that takes minutes.”
“Being recognized as a finalist at the Microsoft Global Partner Awards is validation of our impactful collaboration with Microsoft in financial crime operations. Our partnership has been pivotal for our innovations, enabling us to use Azure OpenAI to bring tools like Luci to life and deliver impactful results for our clients,” says Guðmundur Kristjánsson, Founder & CEO of Lucinity.
Contact:Name: Celina PabloEmail: [email protected]: +354 792 4321
Logo: https://mma.prnewswire.com/media/2208676/4669079/Lucinity_Logo.jpg
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Artificial Intelligence
Asia Pacific View: Foreigners Looking for the Most Practical Smart Technology at the 2024 World Intelligence Expo
BEIJING, June 28, 2024 /PRNewswire/ — Bionic robots that speak both Chinese and English can have the same skin and nails as humans? A flying car powered solely by wind can have a maximum payload of 160 kg? A smart wheelchair can control its operation with just the “mind”? Kevin and Daria, two foreign bloggers, have experienced during the World Intelligence Expo held in Tianjin how the artificial intelligence can empower people’s future lives in industries such as technology, trade, logistics and cultural tourism.
With the theme of “Intelligent Travel Empowering Future”, the Expo integrates exhibitions, experiences and events, attracting more than 550 exhibitors and institutions from all over the world, including more than 70 well-known enterprises such as Huawei, Alibaba, Baidu and Danfoss, and 57 universities and research institutions such as Peking University, Tsinghua University, Nankai University and Tianjin University. The Expo set up 10 major themes such as artificial intelligence, intelligent networked vehicles, intelligent manufacturing and robots, covering the frontier hot spots of the intelligent industry. A number of cutting-edge new technologies, new products, and new experiences from all over the world were showcased centrally, reminding people that technology will completely change the lifestyles in the future.
At the exhibition site, various intelligent robot products such as humanoid robots, bionic robots, and intelligent robot dogs interact with the audience on the spot. They are no longer fantasies in science fiction or movies, but play an important role in monitoring, rescue, cultural tourism and other fields. In the low-altitude economic exhibition area, a number of drones, flying vehicles, and aerospace technology companies collectively display advanced technology products. A low-altitude aircraft shaped like a helicopter brought by the German company Tensor can independently complete cargo transportation, takeoff and landing according to pre-set routes according to the instructions. Robotic arms incorporating technologies such as 5G, IoT, edge computing, rocker robotics, and artificial intelligence can shoot high-frame-rate video and support autofocus, achieving effects that cannot be achieved in traditional shooting modes. Viewers can also have more novel experiences with the help of smart technology.
The Expo also hosted three major events such as the Asia-Pacific Robotics World Cup Tianjin International Invitational, the World Intelligent Driving Challenge, and the International Intelligent Sports Conference. A number of technological achievements and innovative applications were demonstrated in the competitions. For exhibiting companies, this Expo is also an opportunity to further promote the transformation of enterprises to information technology and digitalization, and will also bring huge business opportunities.
Contact: Guo RanPhone: 008610-68332663Email: [email protected]
Video: https://www.youtube.com/watch?v=VjjzurfN_r0 Logo: https://mma.prnewswire.com/media/2451195/logo_Asia_Pacific_View_Logo.jpg
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USA News Group Commentary
Issued on behalf of Avant Technologies Inc.
VANCOUVER, BC, June 28, 2024 /PRNewswire/ — USA News Group – The world is changing rapidly thanks to artificial intelligence (AI), with what’s being called the Transformative AI era which comes with great benefits and also potential dangers. The economic impacts are global, with a new report from The Bank for International Settlements (BIS) urging central banks to adapt rapidly to AI advances. Now it’s become apparent how important it is for companies to understand how to harness the full potential of GenAI to secure strategic revenue growth in the coming years. The surge of AI’s usefulness is accelerating innovation in R&D, while behind the scenes tech companies are advancing the infrastructure required to keep this revolution going, including new developments from Avant Technologies Inc. (OTCQB: AVAI), Accenture plc (NYSE: ACN), Cloudflare, Inc. (NYSE: NET), Alphabet Inc. (NASDAQ: GOOG, GOOGL), and Amazon.com, Inc. (NASDAQ: AMZN).
Known for pioneering advancements in AI, Avant Technologies Inc. (OTCQB: AVAI) has persistently refined and expanded its premier offering, Avant AI™. This sophisticated AI platform, celebrated for its machine learning and deep learning capabilities, is the culmination of Avant’s efforts to deliver unprecedented and cost-effective compute infrastructure that unlocks the full potential of AI and ushers in a new era of technological advancement.
“There is a real unmet need as rapid growth across the entirety of the AI and big data industries is outpacing the necessary infrastructure for an industry that demands exponential power and capacity while remaining cost effective,” said Avant’s CEO William Hisey in a recent address of progress on AI supercomputer-driven data centers. “Avant’s ‘edge-native’ approach doesn’t rely on cloud-based services so we can offer AI and big data companies many advantages over the more familiar ‘cloud-native’ approach, including, reduced latency, improved security and privacy, increased scalability, and reduced costs.”
In a recent strategic development, Avant entered into a Binding Letter of Intent (BLOI) with Flow Wave, LLC (FW), a prominent Florida-based firm specializing in immersible computer server technology. This agreement allows Avant to acquire up to 50 cutting-edge immersible computer servers from FW, in a transaction valued at $50 million.
“By integrating proprietary machine learning algorithms with open-source innovations into these servers, Avant is developing a highly intelligent system designed to optimize resource allocation, enhance performance, and drive unprecedented levels of efficiency and automation,” said Hisey. “This marks the beginning of a new era for Avant Technologies, positioning us at the forefront of the supercomputer-driven data center industry and setting new standards for managing and storing AI applications.”
Flow Wave Immersible AI Supercomputer Servers are engineered for demanding AI and machine learning applications, delivering powerful processing capabilities that accelerate data analysis. Their cutting-edge cooling system is both energy-efficient and cost-effective, reducing environmental impact. These servers’ compact design facilitates easy installation in space-constrained data centers, and their robust construction ensures longevity and lower maintenance requirements.
In response to digital era challenges, Avant intends to acquire up to 50 of these high-performance servers. Their superior cooling technology boosts performance while conserving energy, aligning with Avant’s goal of providing top-tier AI infrastructure and maximizing efficiency. Additional details about the acquisition will be shared once the final agreement is secured.
In Q3 2024, Accenture plc (NYSE: ACN) brought in over $900 million in new Generative AI bookings, for a total of $2 billion fiscal year-to-date. Despite missing its overall earnings targets, the market responded by sending its shares upward.
“We achieved strong new bookings of over $21 billion, up 22% over last year, and continued to accelerate our strategy to be the reinvention partner of choice, with another 23 clients with quarterly bookings of over $100 million, bringing the total of such bookings to 92 year-to-date,” said Julie Sweet, Chair and CEO of Accenture. “We also achieved two significant milestones this quarter — with $2 billion in Generative AI sales year-to-date and $500 million in revenue year-to-date — which demonstrate our early lead in this critical technology.”
Back in May, Accenture took steps to help its clients to scale their Generative AI responsibly.
“Clients are eager to embrace the potential of generative AI, and we are ready to help them build responsible AI into every use,” said Sweet. “We do this for ourselves, and we can use that example to help our clients find success faster. Our focus is to enable our clients to innovate AI safely and be ready to seize the opportunities that AI will bring in the decades ahead.”
Recently, the cloud-based security solution provider Cloudflare, Inc. (NYSE: NET) unveiled the general availability of its AI Gateway platform. Marketed as a comprehensive interface for managing and scaling generative AI workloads, the platform has transitioned from its beta phase, which started in September 2023, to full client use after successfully handling over 500 million requests.
This launch coincides with Cloudflare’s announcement of a partnership with Hugging Face, a leading platform for AI developers. The collaboration offers a one-click global deployment for AI applications via the Workers AI platform, now also generally available. As the first serverless inference partner integrated on the Hugging Face Hub, this allows developers to deploy AI models quickly, easily, and cost-effectively on a global scale, without the need for managing infrastructure or paying for unused compute capacity.
“Workers AI is one of the most affordable and accessible solutions to run inference,” said Matthew Prince, CEO and co-founder, Cloudflare. “With Hugging Face and Cloudflare both deeply aligned in our efforts to democratize AI in a simple, affordable way, we’re giving developers the freedom and agility to choose a model and scale their AI apps from zero to global in an instant.”
In the education space, Alphabet Inc. (NASDAQ: GOOG, GOOGL) through Google, is bringing new AI tools to Google Workspace for teen students using their school accounts to help them learn responsibly and confidently in an AI-first future, and empowering educators with new tools to help create great learning experiences.
“In the coming months, we’re making Gemini available to teen students that meet our minimum age requirements while using their Google Workspace for Education accounts in English in over 100 countries around the world, free of charge for all education institutions,” said Google in a blog post. “To ensure schools are always in control, Gemini will be off by default for teens until admins choose to turn it on as an Additional Service in the Admin console.”
Google has also developed a number of resources and trainings to help students, parents and educators use generative AI tools responsibly and effectively, including a video on how teens can responsibly use AI while learning.
After recently hitting a $2-trillion valuation, Amazon.com, Inc. (NASDAQ: AMZN) continues to be a big player in the AI space. Now it’s reportedly working on its own AI chatbot that some say might be smarter than ChatGPT, named Metis, which will generate answers by grabbing info from the internet.
Metis is driven by an internal Amazon AI model known as Olympus, drawing inspiration from Greek mythology. According to sources, Olympus is a more advanced version of Amazon’s publicly available Titan model.
Amazon’s CEO Andy Jassy has noted that nearly every division within the company is engaged in some form of AI project. As a pioneer in cloud computing, Amazon has been developing machine learning, a subset of AI, for many years. Jassy recently announced that Amazon’s AI initiatives are projected to generate over $1 billion in annual revenue, with expectations of driving “tens of billions of dollars” in sales in the coming years.
However, Amazon has lagged in the realm of consumer AI assistants. An internal document from last year highlighted that Amazon “does not have a publicly or internally available product that looks and works exactly like ChatGPT.”
According to a source reported by Business Insider, the tentative launch date for Metis is September, right around the time when Amazon is set to host a big Alexa event, although the timeline could still change.
Source: https://usanewsgroup.com/2023/10/26/unlocking-the-trillion-dollar-ai-market-what-investors-need-to-know/
CONTACT:
USA NEWS [email protected](604) 265-2873
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