What factors could drive PCTY's EPS surprise in Q3 2025?

Paylocity's EPS surprise in Q3 2025 could be driven by several key factors: 1. **Revenue Growth**: Paylocity has consistently demonstrated strong revenue growth, with total revenue increasing by 19% in Q4 2024 and 19% for the full fiscal year 2024. The company's recurring revenue also grew by 17% for the fiscal year 2024. If this trend continues, it could contribute to an EPS surprise in Q3 2025. 2. **New Client Acquisition**: Paylocity added 2,850 new clients in fiscal 2024, bringing the total to 39,050. The addition of new clients, especially those with higher average recurring revenue, could enhance revenue and potentially lead to an EPS surprise. 3. **Average Recurring Revenue Per Client**: Paylocity's average recurring revenue per client grew by 8% to nearly $33,000. An increase in this metric, indicating higher average revenue from existing clients, could positively impact EPS. 4. **Strategic Initiatives**: Paylocity has been innovating and expanding its product offerings, such as the launch of new AI-driven tools. These strategic initiatives could enhance operational efficiency and drive revenue growth, potentially leading to an EPS surprise. 5. **Market Position and Competition**: Paylocity's strong market position and competitive advantages, such as its focus on mid-market innovation and the integration of AI, could protect its margins and contribute to EPS growth. 6. **Financial Performance Metrics**: Paylocity reported a robust adjusted EBITDA of $126.2 million for Q2 FY2025, up from $112.6 million in the same quarter last year. If this trend is sustained, it could indicate strong profitability and support an EPS surprise. It's important to note that while these factors could contribute to an EPS surprise, they are not definitive predictors. Other factors such as market conditions, economic trends, and company-specific developments could also impact Paylocity's financial performance in Q3 2025.