Paylocity (NASDAQ:PCTY) Issues Earnings Results

Key Points

• Paylocity beat quarterly expectations: Adjusted EPS was $2.09 versus $1.93 expected, while revenue of $451.7 million topped estimates and grew 10.7% year over year.
• The company raised its fiscal 2027 outlook to $1.910 billion–$1.925 billion in revenue and $711.5 million–$721.5 million in adjusted EBITDA.
• Paylocity repurchased $152.5 million of shares during the quarter and highlighted AI product adoption, including growing use of Ignite AI and early recruiting-productivity gains among customers.

Paylocity (NASDAQ:PCTY - Get Free Report) released its quarterly earnings results on Thursday. The software maker reported $2.09 earnings per share (EPS) for the quarter, topping the consensus estimate of $1.93 by $0.16, FiscalAI reports. Paylocity had a net margin of 15.23% and a return on equity of 27.02%. The business had revenue of $451.67 million for the quarter, compared to analyst estimates of $443.12 million. During the same period in the previous year, the company earned $1.75 earnings per share. The business's revenue for the quarter was up 10.7% on a year-over-year basis.

Here are the key takeaways from Paylocity's conference call:

• Paylocity reported Q1 recurring and other revenue of $424.5 million, up 12%, and total revenue of $451.7 million, up nearly 11%, beating its guidance. Adjusted EBITDA was $159.5 million, a 35.3% margin, also above expectations.
• The company raised fiscal 2027 guidance, increasing its total revenue outlook by $30 million at the midpoint to $1.910 billion–$1.925 billion and adjusted EBITDA guidance to $711.5 million–$721.5 million. The outlook assumes no further interest-rate changes this fiscal year and includes an estimated $118 million in interest income on client funds.
• Management highlighted growing AI adoption and monetization opportunities: Ignite AI has answered nearly 30 million questions and surfaced more than 3 billion recommendations, while Recruiting Optimizer is offered as a premium solution. The company cited early customer results including 35% higher recruiting productivity and roles filled 25% faster.
• Management described demand as stable and Q1 growth as balanced across new customers, ARPU, product sales into the existing base, and client retention; referral partners generated more than 25% of new business. It also repurchased 1.1 million shares for $152.5 million and said it expects to remain active under its buyback program.
• Gross margin declined year over year, which management attributed to timing and staffing for newer offerings, rather than AI-related costs. It expects margins to improve through the year, while total R&D investment rose nearly 15% year over year to support product development.

Paylocity Price Performance

Shares of PCTY traded up $3.58 on Friday, reaching $173.15. The stock had a trading volume of 1,225,928 shares, compared to its average volume of 596,017. The firm has a 50-day moving average of $156.11 and a 200 day moving average of $127.44. The firm has a market capitalization of $9.03 billion, a PE ratio of 30.49, a PEG ratio of 2.06 and a beta of 0.43. The company has a quick ratio of 1.09, a current ratio of 1.09 and a debt-to-equity ratio of 0.07. Paylocity has a twelve month low of $92.99 and a twelve month high of $180.88.

Wall Street Analysts Forecast Growth

A number of equities analysts recently issued reports on the company. BMO Capital Markets raised their target price on Paylocity from $143.00 to $175.00 and gave the stock an "outperform" rating in a research note on Wednesday, August 5th. Weiss Ratings raised shares of Paylocity from a "hold (c-)" rating to a "hold (c)" rating in a research note on Tuesday, September 22nd. Robert W. Baird set a $201.00 price target on Paylocity in a research note on Wednesday, August 5th. Citigroup boosted their price target on shares of Paylocity from $168.00 to $208.00 and gave the stock a "buy" rating in a research note on Tuesday, October 27th. Finally, TD Cowen raised their target price on shares of Paylocity from $168.00 to $177.00 and gave the company a "buy" rating in a report on Thursday, August 20th. Twelve analysts have rated the stock with a Buy rating and five have given a Hold rating to the stock. According to MarketBeat, Paylocity presently has an average rating of "Moderate Buy" and an average price target of $177.47.

Paylocity News Roundup

Here are the key news stories impacting Paylocity this week:

• Positive Sentiment: For Q1 fiscal 2027, Paylocity reported adjusted earnings of $2.09 per share, versus the $1.93 consensus, and revenue of $451.7 million, above the $443.1 million estimate. Revenue increased 10.7% year over year, while recurring and other revenue rose 12%. The company’s full-year outlook slightly exceeded expectations. Paylocity Announces First Quarter Fiscal 2027 Financial Results
• Positive Sentiment: Analyst target increases added to the upbeat tone: Citizens JMP raised its target to $200 and kept a market outperform rating; Truist raised its target to $200 and maintained Buy; and BTIG lifted its target to $210 and reiterated Buy. Citizens JMP recommendations Truist target change BTIG Research recommendations
• Positive Sentiment: Paylocity repurchased $152.5 million of shares during the quarter, continuing a buyback program that may support per-share results. It also completed the acquisition of Aidora to expand AI-powered leave-management capabilities. Quarterly results release
• Neutral Sentiment: Barclays raised its price target to $176 but maintained an Equal Weight rating, signaling a more cautious view than the other target revisions. Barclays recommendations

Insider Buying and Selling at Paylocity

In other news, Chairman Steven Beauchamp sold 15,000 shares of the business's stock in a transaction dated Thursday, October 15th. The shares were sold at an average price of $165.22, for a total value of $2,478,300.00. Following the completion of the sale, the chairman owned 1,243,389 shares of the company's stock, valued at approximately $205,432,730.58. The trade was a 1.19% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Steven I. Sarowitz sold 19,459 shares of the stock in a transaction dated Thursday, August 27th. The stock was sold at an average price of $157.78, for a total transaction of $3,070,241.02. Following the sale, the director owned 4,453,495 shares in the company, valued at approximately $702,672,441.10. This trade represents a 0.44% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold 151,704 shares of company stock valued at $25,137,741 over the last quarter. Insiders own 19.40% of the company's stock.

About Paylocity

Paylocity Holding Corporation NASDAQ: PCTY provides cloud-based human capital management (HCM) and payroll software for organizations. Its platform is designed to help employers manage payroll, human resources, employee benefits, talent acquisition, onboarding, performance, learning, and workforce administration through an integrated system.

The company also offers tools for time and labor management, scheduling, employee communications, engagement, surveys, expense management, and other workplace activities.

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