Paylocity delivered a solid Q2 FY2025 performance, underscoring durable organic growth and meaningful margin expansion. Total revenue reached $377.0 million, up 16% year over year, with recurring and other revenue at $347.7 million, up 17%. Adjusted gross margin expanded 110 basis points to 73.8% versus 72.7% in the prior-year quarter, while GAAP gross margin stood at 66.96%. Adjusted EBITDA rose to $126.2 million (33.5% margin), contributing to a bottom-line result of net income of $37.5 million and GAAP diluted EPS of $0.66â$0.67 for the quarter. Cash generation remained robust, with operating cash flow of $54.2 million and free cash flow of $51.2 million, and the balance sheet remained proudly cash-positive with net debt of approximately negative $100 million. Management raised guidance for Q3 and full-year 2025, reflecting continued momentum into the back half of the year, improved go-to-market execution, and the integration progress from the Airbase acquisition. The quarter also featured notable strategic progress in AI and data-automation capabilities, including a widely available AI assistant chatbot and substantial productivity gains in reporting. Management reiterated a patient, long-horizon approach to product expansion, cross-sell opportunities (including Airbase to current Paylocity clients), and a measured path to monetization of AI enhancements. The operating trajectory remains solid, though the company faces competitive dynamics in a crowded HR technology landscape and integration risk with the Airbase platform. Overall, Paylocity is positioned to capitalize on its modern platform, strong cash flow, and expanding product suite while continuing to navigate a competitive, albeit improving, macro environment.