Paylocity (PCTY) investor relations material

Executive summary

• Fiscal 2026 recurring revenue grew 12.2% year-over-year to $1.651 billion, with total revenue up 11% to $1.8 billion; Q4 recurring revenue rose 12.4% to $415.6 million.

• Adjusted EBITDA for FY 2026 reached $654.9 million (37% margin), up 12.3% year-over-year; net income was $269.7 million, up 18.8%.

• Client base grew 7% year-over-year to 44,400, with average revenue per client rising over 5% to $37,200.

• Launched Ignite AI, Elevate Solutions, Paylocity Retirement, and acquired Grayscale and Aidora, expanding AI-driven capabilities.

• Maintained industry-leading revenue retention rates above 92% and received multiple external recognitions for workplace and product excellence.

Financial highlights

• FY 2026 total revenue reached $1.771 billion, up 11% year-over-year; Q4 total revenue was $444.7 million.

• Adjusted EBITDA for FY 2026 was $654.9 million (37% margin); excluding interest income, $534.9 million (32.4% margin).

• Free cash flow margin for FY 2026 was 24.2%, with free cash flow of $427.8 million; excluding interest income, free cash flow was $307.8 million (18.6% margin).

• Q4 GAAP results: gross profit $300.4 million, operating income $84.4 million, net income $60.3 million.

• Diluted share count reduced by 3.1% in FY 2026, with 54.8 million diluted weighted average shares outstanding.

Outlook and guidance

• FY 2027 recurring and other revenue expected at $1.777–$1.792 billion (8% growth); total revenue $1.880–$1.895 billion (7% growth).

• Adjusted EBITDA guidance for FY 2027: $690–$700 million; excluding interest income, $587–$597 million.

• Deferred contract cost amortization period extended from 7 to 8 years, increasing adjusted EBITDA margin by 120–140 bps in 2027.

• Guidance assumes two 25 bps interest rate cuts in the back half of FY 2027 and flat workforce levels.

• Q1 2027 recurring and other revenue guidance: $414–$419 million (approx. 10% growth); total revenue: $439.5–$444.5 million (approx. 8% growth).