Paylocity (NASDAQ:PCTY) Releases Earnings Results, Beats Expectations By $0.16 EPS

Paylocity (NASDAQ:PCTY) posted its quarterly earnings results on Thursday. The software maker reported $2.09 EPS for the quarter, beating the consensus estimate of $1.93 by $0.16, FiscalAI reports. Paylocity had a return on equity of 27.02% and a net margin of 15.23%. The firm had revenue of $451.67 million during the quarter, compared to analysts’ expectations of $443.12 million. During the same quarter last year, the firm 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 Stock Up 2.1%

Shares of NASDAQ PCTY traded up $3.58 during midday trading on Friday, reaching $173.15. 1,225,928 shares of the company’s stock were exchanged, compared to its average volume of 596,017. The business’s fifty day moving average price is $156.11 and its two-hundred day moving average price is $127.44. Paylocity has a 52-week low of $92.99 and a 52-week high of $180.88. The stock has a market capitalization of $9.03 billion, a PE ratio of 30.49, a price-to-earnings-growth ratio of 2.06 and a beta of 0.43. The company has a debt-to-equity ratio of 0.07, a quick ratio of 1.09 and a current ratio of 1.09.

Insider Transactions at Paylocity

In other Paylocity news, Director Steven Sarowitz sold 19,459 shares of the stock in a transaction that occurred on 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 transaction, the director owned 4,453,495 shares of the company’s stock, valued at $702,672,441.10. This trade represents a 0.44% decrease in their position. The transaction was disclosed in a filing with the SEC, which is available at the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Chairman Steven R. Beauchamp sold 15,000 shares of the stock in a transaction that occurred on Thursday, October 15th. The stock was sold at an average price of $165.22, for a total value of $2,478,300.00. Following the sale, the chairman owned 1,243,389 shares in the company, valued at $205,432,730.58. The trade was a 1.19% decrease in their ownership of the stock. 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.

Analyst Upgrades and Downgrades

Several brokerages have commented on PCTY. Jefferies Financial Group reissued a “buy” rating and issued a $165.00 price target on shares of Paylocity in a research report on Wednesday, August 5th. Citigroup increased their target price on shares of Paylocity from $168.00 to $208.00 and gave the company a “buy” rating in a research report on Tuesday, October 27th. Barclays increased their price objective on Paylocity from $162.00 to $176.00 and gave the company an “equal weight” rating in a report on Friday. BMO Capital Markets upped their price objective on Paylocity from $143.00 to $175.00 and gave the company an “outperform” rating in a research note on Wednesday, August 5th. Finally, Wall Street Zen downgraded shares of Paylocity from a “buy” rating to a “hold” rating in a research report on Saturday, October 24th. Twelve analysts have rated the stock with a Buy rating and five have issued a Hold rating to the stock. Based on data from MarketBeat.com, the stock has a consensus rating of “Moderate Buy” and an average price target of $177.47.

More Paylocity News

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

Paylocity Company Profile

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.