According to a Research and Markets report, the global Human Capital Management (HCM) market is estimated to grow 10% annually over the next few years to $26.5 billion industry by 2024 from $16.7 billion in 2019. The growth in the industry is expected to be driven by the continued adoption of cloud-based solutions such as those offered by Paylocity (Nasdaq: PCTY).

Paylocity’s Financials

For the second quarter, Paylocity’s revenues grew 23% over the year to $132.4 million, ahead of the Street’s forecast of $130 million. Recurring revenues grew 25% to $128 million. Adjusted EPS grew 36% to $0.36 and was also significantly ahead of the market’s forecast of $0.23 for the quarter.

Paylocity expects to end the third quarter with revenues of $168.5-$169.5 million, ahead of the Street’s forecast of $167 million. It expects to end the year with revenues of $572.5-$573.5 million, compared with the Street’s estimate of $566.94 million.

Paylocity’s Product Upgrades

Paylocity recently rolled out several new features that are focused on attracting and retaining the cloud-focused user. Its On Demand Payment offering allows employees with the financial flexibility to access their earned wages during the active pay cycle. The product will come in very useful in the current times of economic turmoil. On Demand Payment provides seamless user experience and gives employees the opportunity to request access to wages within minutes using their mobile devices.

To drive a collaborative approach to HCM, it released Community, a social collaboration platform that helps in improving employee connection, engagement, and productivity. Community operates on a digital open-door policy allowing HR and employees to share relevant content with coworkers so that they can collaborate in real-time while providing transparent access to the organization’s larger initiatives. Since the release of the product, Paylocity has noticed how it has become an important tool for HR to communicate around company events, benefit updates, and recognition.

Paylocity is also helping employees train themselves through its Learning Management System (LMS). LMS operates on a self-directed and independent approach to allow employees to train based on their time schedule. By mirroring training on YouTube videos, Paylocity’s training modules allow organizations to design, record and share custom courses with their colleagues.

For its payroll offering, Paylocity introduced a W-4 Readiness Kit that enables clients to ensure compliance with the IRS’s new W-4 rules. The new W-4 rules were effective January of this year, and the kit provides its customers with access to relevant content to transition to these new rules.

Paylocity focuses on small and medium-sized businesses. It sees significant growth coming from clients with less than 50 employees. Its current initiatives are geared to helping these organizations manage their employee and payroll processes at par with those followed by bigger organizations.

Its stock is trading at $92.64 with a market capitalization of $4.2 billion. Prior to the recent stock market turbulence, its stock was doing very well. It had touched a year high of $150.73 in February. But the stock has not been able to sustain its growth in these uncertain times. It fell to a year low levels of $67.22 earlier this week.