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

by · The Markets Daily

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

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 Trading Up 2.1%

NASDAQ:PCTY opened at $173.15 on Friday. The company has a market capitalization of $9.03 billion, a PE ratio of 33.56, a price-to-earnings-growth ratio of 2.06 and a beta of 0.43. The stock has a fifty day simple moving average of $156.11 and a 200-day simple moving average of $127.44. Paylocity has a 52-week low of $92.99 and a 52-week high of $180.88. The company has a quick ratio of 1.09, a current ratio of 1.09 and a debt-to-equity ratio of 0.07.

Analysts Set New Price Targets

Several analysts have recently weighed in on PCTY shares. Robert W. Baird set a $201.00 price target on shares of Paylocity in a research note on Wednesday, August 5th. Citigroup lifted their price target on Paylocity from $168.00 to $208.00 and gave the company a “buy” rating in a report on Tuesday, October 27th. UBS Group set a $175.00 price target on Paylocity in a research note on Tuesday, September 29th. Zacks Research downgraded shares of Paylocity from a “strong-buy” rating to a “hold” rating in a report on Monday, July 27th. Finally, Weiss Ratings raised shares of Paylocity from a “hold (c-)” rating to a “hold (c)” rating in a report on Tuesday, September 22nd. Twelve research analysts have rated the stock with a Buy rating and five have issued a Hold rating to the company’s stock. Based on data from MarketBeat, the stock has a consensus rating of “Moderate Buy” and a consensus price target of $177.47.

View Our Latest Research Report on PCTY

Insider Activity

In other news, Director Steven I. 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 value of $3,070,241.02. Following the completion of the sale, the director directly owned 4,453,495 shares of the company’s stock, valued at approximately $702,672,441.10. This represents a 0.44% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Chairman Steven Beauchamp sold 15,000 shares of Paylocity stock in a transaction dated 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 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 ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold 151,704 shares of company stock worth $25,137,741 in the last ninety days. Corporate insiders own 19.40% of the company’s stock.

Paylocity News Summary

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

(Get Free Report)

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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