Paylocity (PCTY) Q3 2026 earnings summary

Executive summary

• Q3 2026 recurring and other revenue reached $469.9 million, up 11.6% year-over-year, with total revenue at $502.3 million, driven by strong sales, product innovation, and expanded AI capabilities.

• Net income for Q3 2026 was $111.3 million ($2.05 per share), up from $91.5 million ($1.61 per share) in Q3 2025, with adjusted EBITDA rising to $220.2 million.

• Acquisitions of Grayscale Labs in April 2026 and Airbase Inc. in October 2024 expanded AI-powered recruiting and spend management capabilities.

• $350 million in share repurchases completed in the first nine months of fiscal 2026; board authorized an additional $1 billion, totaling $1.35 billion available as of May 2026.

• Recognized with multiple industry awards for workplace culture, product excellence, and innovation.

Financial highlights

• Q3 2026 recurring and other revenue was $469.9 million, up 11.6% year-over-year; total revenue reached $502.3 million, a 10.5% increase.

• Adjusted gross profit margin was 77.3%, with gross margin improving to 72% year-over-year.

• Adjusted EBITDA for Q3 2026 was $220.2 million (43.8% margin), up from $197.1 million in Q3 2025.

• Free cash flow for the trailing twelve months ended March 31, 2026 was $421.0 million (24.4% margin), up from $335.8 million (21.6%) a year earlier.

• Cash and cash equivalents at March 31, 2026, totaled $299.7 million; long-term debt was $81.3 million.

Outlook and guidance

• Fiscal 2026 recurring and other revenue expected between $1.638 billion and $1.643 billion (11–12% growth year-over-year); total revenue guidance is $1.755–$1.760 billion (10% growth year-over-year).

• Fiscal 2026 adjusted EBITDA expected between $638.0 million and $642.0 million; Q4 2026 adjusted EBITDA expected between $128.6 million and $132.6 million.

• Q4 2026 recurring and other revenue expected at $402.2–$407.2 million (9–10% growth year-over-year); total revenue expected at $428.4–$433.4 million (7–8% growth).

• Guidance assumes flat workforce levels, no further Fed rate cuts, and continued investment in R&D and operational efficiency.

• Long-term targets include 80%+ adjusted gross profit margin, 40–45% adjusted EBITDA margin, and 25–30% free cash flow margin.