Paylocity Holdng (PCTY)

Working capital turnover

Jun 30, 2025 Mar 31, 2025 Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020
Revenue (ttm) US$ in thousands 1,595,221 1,551,771 1,498,504 1,447,885 1,402,515 1,353,681 1,292,257 1,238,904 1,174,598 1,095,092 1,001,205 924,234 852,651 791,155 731,238 681,530 635,627 598,765 584,358 570,403
Total current assets US$ in thousands 607,832 673,485 4,237,260 3,193,860 3,426,630 4,154,080 3,806,700 2,982,900 3,048,440 3,566,010 3,309,020 2,479,620 4,231,680 4,516,990 2,087,090 3,332,030 2,032,880 2,298,320 2,495,820 1,673,040
Total current liabilities US$ in thousands 210,428 202,363 3,705,620 2,500,700 3,117,360 3,765,190 3,422,860 2,672,230 2,774,800 3,354,660 3,189,100 2,411,580 4,120,530 4,438,440 2,006,170 3,273,450 1,867,020 2,138,370 2,271,260 1,444,530
Working capital turnover 4.01 3.29 2.82 2.09 4.53 3.48 3.37 3.99 4.29 5.18 8.35 13.58 7.67 10.07 9.04 11.63 3.83 3.74 2.60 2.50

June 30, 2025 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $1,595,221K ÷ ($607,832K – $210,428K)
= 4.01

The working capital turnover ratios for Paylocity Holding over the observed periods reveal significant fluctuations indicating dynamic operational efficiency and liquidity management.

Initially, from September 30, 2020, to June 30, 2021, the ratio showed a steady upward trend, increasing from 2.50 to 3.83. This suggests an improved ability to generate sales relative to working capital during this period, possibly reflecting operational scaling or enhanced efficiency.

A notable spike occurred at September 30, 2021, where the ratio jumped to 11.63, indicating a substantial increase in sales revenue generated per unit of working capital. This sharp rise could be attributable to factors such as increased sales efficiency, reduction in working capital levels, or a favorable shift in operational dynamics.

Following this peak, the ratio displayed a downward trajectory, declining to 8.35 by December 31, 2022. Despite the decrease, the ratio remained relatively high compared to pre-2021 levels, suggesting continued efficiency but with some diminishing return or seasonal influences.

Between March 31, 2023, and September 30, 2023, the ratio further decreased to 3.99, indicating a decline in the efficiency of working capital utilization in generating sales. The subsequent data through December 2024 shows fluctuations within a narrower range, with ratios oscillating between approximately 2.09 and 4.53, reflecting periods of varying operational efficiency and potentially changing working capital management strategies.

Looking ahead, projections for the period through June 2025 indicate the ratio stabilizes around 3.29 to 4.01, suggesting a normalization of working capital turnover post-2023, possibly approaching a steady operational state.

In summary, the historical pattern of Paylocity Holding’s working capital turnover demonstrates periods of rapid efficiency gains followed by stabilization and slight declines. The data illustrates the company's capacity to leverage working capital effectively during certain periods, with fluctuations likely driven by operational, market, or strategic factors affecting sales performance and working capital management.