What happened
Shares of Paycore HCM (PYCR -1.42%) traded as much as 12% higher Wednesday morning after the human capital management software company announced results for its fiscal 2022 fourth quarter, which ended June 30. However, as of 10 a.m. ET, the stock had given back much of those gains and was up by roughly 3.4%.
So what
After the closing bell Tuesday, Paycore reported a net loss of $0.14 per share on revenue of nearly $111 million for the quarter, which was an improvement from the same period a year ago, when the company reported a net loss of $0.23 per share on revenue of roughly $87.6 million.
"We completed our first year as a public company with accelerated revenue growth of 26% for the quarter and 22% for the year," said Paycor CEO Raul Villar Jr. in a statement. "Our strategy of designing technology for leaders, configuring by industry, and providing the most open HCM platform is driving revenue growth to the highest levels on recent record. ... We are in great position to continue capturing market share as the multi-billion-dollar HCM market shifts to the cloud."
For its fiscal 2023, Paycor is guiding for revenue in the range of $510 million to $516 million and adjusted operating income in the range of $58 million to $61 million. If it hits the top end of those ranges, it will amount to an approximately 20% increase in revenue and a roughly 28% rise in adjusted operating income.
Now what
Paycor's guidance for its current fiscal year looks solid, but there are risks. If a more severe recession occurs, that could lead to less hiring at companies, which would reduce demand for Paycor's products.
The company also is not profitable yet, and its valuation relative to its expected earnings is quite high. So while the business is growing, investors should keep an eye on its progress toward profitability, especially if macroeconomic conditions worsen and the labor market starts to deteriorate.