Paylocity Announces Fourth Quarter and Full Fiscal Year 2025 Financial Results

• Q4 2025 Recurring & Other Revenue of $369.9 million, up 14% year-over-year

• Q4 2025 Total Revenue of $400.7 million, up 12% year-over-year

• FY 2025 Recurring & Other Revenue of $1,471.8 million, up 15% year-over-year

• FY 2025 Total Revenue of $1,595.2 million, up 14% year-over-year

• Repurchased 800,000 shares of common stock for $150 million during FY 2025

• Increased share repurchase authorization by $500 million

• Announced the launch of Paylocity for Finance - expands the platform’s reach into the Office of the CFO, unifying HR and Finance through a single system of record
  
  

SCHAUMBURG, Ill., Aug. 05, 2025 (GLOBE NEWSWIRE) -- Paylocity Holding Corporation (Nasdaq: PCTY), a leading provider of cloud-based HCM, payroll and spend management software solutions, today announced financial results for the fourth quarter and full fiscal year 2025, which ended June 30, 2025.

“Fiscal 25 was a very strong year as our differentiated position in the market was reflected in solid sales and operational execution, helping to drive 15% recurring and other revenue growth and 14% total revenue growth. Our strong growth was driven by the continued expansion of average revenue per client and a 7% increase in our client base – while also focusing on efficiency and productivity across our organization. Most recently, we announced the launch of Paylocity for Finance, expanding our modern workforce platform into the Office of the CFO, and bringing both finance and HR teams together through a unified system grounded in the employee record. By unifying data to connect critical workflows, we’re delivering enhanced visibility, improved efficiency, and an exceptional user experience that drives value through increased adoption across teams. In addition to strong revenue and profitability growth in fiscal 25, we also returned capital to shareholders by repurchasing $150 million or approximately 800,000 shares of our stock. I would also like to thank all of our employees for their efforts supporting our clients, and congratulate our teams for another successful year,” said Toby Williams, President and Chief Executive Officer of Paylocity.

Key Recent Achievements

• FY 2025 Recurring & other revenue of $1,471.8 million, up 15% year-over-year.

• FY 2025 Total revenue of $1,595.2 million, up 14% year-over-year.

• FY 2025 GAAP net income increased 10% to $227.1 million from $206.8 million in FY 2024 and $4.02 per diluted share from $3.63 in FY 2024.

• FY 2025 Adjusted EBITDA, a non-GAAP measure, increased 15% to $583.0 million from $505.6 million in FY 2024, or 36.5% of Total revenue compared to 36.0% in FY 2024.

• FY 2025 Adjusted EBITDA excluding interest income on funds held for clients, a non-GAAP measure, increased 19% to $459.6 million from $384.7 million in FY 2024, or 31.2% of Recurring and other revenue compared to 30.0% in FY 2024.
  
  

Fourth Quarter Fiscal 2025 Financial Highlights

Revenue:

• Total revenue was $400.7 million, an increase of 12% from the fourth quarter of fiscal year 2024.

• Recurring & other revenue was $369.9 million, an increase of 14% from the fourth quarter of fiscal year 2024.
  
  

Operating Income:

• GAAP operating income was $66.2 million and non-GAAP operating income was $105.6 million in the fourth quarter of fiscal year 2025, compared to GAAP operating income of $62.9 million and non-GAAP operating income of $96.3 million in the fourth quarter of fiscal year 2024.
  
  

Net Income:

• GAAP net income was $48.6 million or $0.86 per share in the fourth quarter of fiscal year 2025 based on 56.3 million diluted weighted average common shares outstanding, compared to $48.8 million or $0.86 per share in the fourth quarter of fiscal year 2024 based on 56.9 million diluted weighted average common shares outstanding.
  
  

Adjusted EBITDA:

• Adjusted EBITDA, a non-GAAP measure, was $130.7 million in the fourth quarter of fiscal year 2025 compared to $120.2 million in the fourth quarter of fiscal year 2024.

• Adjusted EBITDA excluding interest income on funds held for clients, a non-GAAP measure, was $99.9 million in the fourth quarter of fiscal year 2025 compared to $87.6 million in the fourth quarter of fiscal year 2024.
  
  

Fiscal Year 2025 Financial Highlights

Revenue:

• Total revenue was $1,595.2 million, an increase of 14% from fiscal year 2024.

• Recurring & other revenue was $1,471.8 million, an increase of 15% from fiscal year 2024.
  
  

Operating Income:

• GAAP operating income was $304.0 million and non-GAAP operating income was $484.4 million in fiscal year 2025, compared to GAAP operating income of $260.1 million and non-GAAP operating income of $421.9 million in fiscal year 2024.
  
  

Net Income:

• GAAP net income was $227.1 million or $4.02 per share for fiscal year 2025, based on 56.6 million diluted weighted average common shares outstanding, compared to $206.8 million or $3.63 per share for fiscal year 2024 based on 57.0 million diluted weighted average common shares outstanding.
  
  

Adjusted EBITDA:

• Adjusted EBITDA, a non-GAAP measure, was $583.0 million for fiscal year 2025 compared to $505.6 million for fiscal year 2024.

• Adjusted EBITDA excluding interest income on funds held for clients, a non-GAAP measure, was $459.6 million for fiscal year 2025 compared to $384.7 million for fiscal year 2024.
  
  

Balance Sheet and Cash Flow:

• Cash and cash equivalents totaled $398.1 million at the end of fiscal year 2025.

• Long-term debt totaled $162.5 million as of the end of fiscal year 2025, representing borrowings under our credit facility to fund the acquisition of Airbase on October 1, 2024. This reflects approximately $162.5 million repaid on our outstanding balance during the second half of fiscal year 2025.

• Net cash provided by operating activities for the fiscal year 2025 was $418.2 million compared to $384.7 million for fiscal year 2024.

• Free cash flow, a non-GAAP measure, was $342.8 million or 21.5% of Total revenue for fiscal year 2025 compared to $305.9 million or 21.8% of Total revenue for fiscal year 2024.

• Free cash flow excluding interest income on funds held for clients, a non-GAAP measure, was $219.3 million or 14.9% of Recurring and other revenue for fiscal year 2025 compared to $185.1 million or 14.4% of Recurring and other revenue for fiscal year 2024.
  
  

A reconciliation of GAAP to non-GAAP financial measures has been provided in this press release, including the accompanying tables. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures.”

Business Outlook

Based on information available as of August 5, 2025, Paylocity is issuing guidance for the first quarter and full fiscal year 2026 as indicated below.

First Quarter 2026:

• Recurring and other revenue is expected to be in the range of $370.0 million to $375.0 million, which represents approximately 12% growth over fiscal year 2025 first quarter recurring and other revenue.

• Total revenue is expected to be in the range of $397.5 million to $402.5 million, which represents approximately 10% growth over fiscal year 2025 first quarter total revenue.

• Adjusted EBITDA, a non-GAAP measure, is expected to be in the range of $131.0 million to $135.0 million.

• Adjusted EBITDA excluding interest income on funds held for clients, a non-GAAP measure, is expected to be in the range of $103.5 million to $107.5 million.
  
  

Fiscal Year 2026:

• Recurring and other revenue is expected to be in the range of $1.597 billion to $1.612 billion, which represents approximately 9% growth over fiscal year 2025 recurring and other revenue.

• Total revenue is expected to be in the range of $1.707 billion to $1.722 billion, which represents approximately 8% growth over fiscal year 2025 total revenue.

• Adjusted EBITDA, a non-GAAP measure, is expected to be in the range of $608.5 million to $618.5 million.

• Adjusted EBITDA excluding interest income on funds held for clients, a non-GAAP measure, is expected to be in the range of $498.5 million to $508.5 million.
  
  

We are unable to reconcile forward-looking non-GAAP financial measures included in our guidance to their directly comparable GAAP financial measures because the information which is needed to complete the reconciliations is unavailable at this time without unreasonable effort.

Conference Call Details

Paylocity will host a conference call to discuss its fourth quarter and full fiscal year 2025 results today at 4:00 p.m. Central Time (5:00 p.m. Eastern Time). A live audio webcast of the conference call, together with detailed financial information, can be accessed through https://investors.paylocity.com/events-and-presentations where you will be provided with dial in details. A replay of the call will be available and archived via webcast at https://investors.paylocity.com/.

About Paylocity

Paylocity is a leading provider of cloud-based HR, payroll, and spend management software solutions headquartered in Schaumburg, IL. Founded in 1997 and publicly traded since 2014, Paylocity offers an intuitive, easy-to-use product suite that helps businesses tackle today’s challenges while moving them toward the promise of tomorrow. Known for its unique culture and consistently recognized as one of the best places to work, Paylocity accompanies its clients on the journey to create great workplaces and help people achieve their best through automation, data-driven insights, and engagement. For more information, visit www.paylocity.com.

Non-GAAP Financial Measures

The company uses certain non-GAAP financial measures when reporting and discussing its financial results, including the financial measures in this release that are designated as being “non-GAAP.” Management presents certain non-GAAP financial measures in this release because it considers them to be important supplemental measures of performance, as they provide investors with the company’s view of its financial performance. Management uses non-GAAP financial measures for planning purposes, including analysis of the company's performance against prior periods, the preparation of operating budgets and to determine appropriate levels of operating and capital investments. Management believes that these non-GAAP financial measures provide additional insight for analysts and investors in evaluating the company's financial and operational performance, including comparisons of current results to prior periods’ results by excluding items the company does not believe reflect fundamental business performance and are not representative or indicative of its results of operations. Non-GAAP financial measures have limitations as an analytical tool and other companies may define their non-GAAP financial measures differently than we do. Investors are encouraged to review the reconciliation of the non-GAAP measures to their most directly comparable GAAP measures provided in the accompanying tables to this release, as well as the definitions of those non-GAAP measures following such tables.

Safe Harbor/Forward Looking Statements

This press release contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, included herein regarding Paylocity’s future operations, future financial position and performance, anticipated results of operations, prospects, plans and objectives of management are forward-looking statements. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “will,” “would,” “seek” and similar expressions (or the negative of these terms) are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements include statements about management's estimates regarding future revenues and financial performance, and other statements about management’s beliefs, intentions or goals and are expressed in good faith and believed to be reasonable at the time such statements are made. Paylocity may not actually achieve the expectations disclosed in the forward-looking statements, and you should not place undue reliance on such statements. These forward-looking statements involve risks and uncertainties, many of which are beyond Paylocity’s control, that could cause actual results or events to differ materially from the expectations disclosed in the forward-looking statements. Factors that could cause actual results or events to differ materially from what is presented include, but are not limited to, the general economic conditions in regions in which Paylocity does business, changes in interest rates, business disruptions, reductions in employment and increases in business failures that have occurred or may occur in the future; Paylocity’s ability to leverage AI Assist and other forms of artificial intelligence and machine learning in its technology, which may be constrained by current and future laws, regulations, interpretive positions or standards governing new and evolving technologies and ethical considerations that could restrict or impose burdensome and costly requirements on its ability to continue to leverage data in innovative ways; Paylocity’s ability to retain existing clients and to attract new clients to enter into subscriptions for its services; the challenges associated with a growing company’s ability to effectively service clients in a dynamic and competitive market; challenges associated with expanding and evolving a sales organization to effectively address new geographies and products and services; challenges related to cybersecurity threats and evolving cybersecurity regulations; Paylocity’s reliance on and ability to expand its referral network of third parties; Paylocity’s reliance on third party payroll partners in foreign jurisdictions in its Blue Marble business; difficulties associated with accurately forecasting revenue and appropriately planning expenses; challenges with managing growth effectively; risks related to acquisitions and investments in other businesses and technologies; risks related to regulatory, legislative and judicial uncertainty in Paylocity’s markets; Paylocity’s ability to protect and defend its intellectual property and its use of open source software in its products; the risk that Paylocity’s security measures are compromised or a threat actor gains unauthorized access to customer data; unexpected events in the market for Paylocity’s solutions; changes in the competitive environment in Paylocity’s industry and the markets in which it operates; adverse changes in general economic or market conditions; changes in the employment rates of Paylocity’s clients and the resultant impact on revenue; the possibility that Paylocity may be adversely affected by other economic, business, and/or competitive factors; and other risks and potential factors that could affect Paylocity’s business and financial results that are identified in Paylocity’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on August 2, 2024, as well as any revisions or supplements to the information in subsequent reports filed or furnished to the SEC. These forward-looking statements represent Paylocity’s expectations as of the date of this press release. Subsequent events may cause these expectations to change, and unless legally required, Paylocity disclaims any obligations to update or alter these forward-looking statements in the future, whether as a result of new information, future events or otherwise.

Stock-based compensation expense and employer payroll taxes related to stock releases and option exercises for each of the three and twelve months ended June 30 are included in the above line items:

(1) Represents acquisition-related costs and severance cost adjustments related to certain roles that have been eliminated. We exclude one-off severance costs that we incur as part of the normal course of our business operations.

(2) Represents acquisition and nonrecurring transaction-related costs, lease exit activity and severance costs related to certain roles that have been eliminated. We exclude one-off severance costs that we incur as part of the normal course of our business operations.

(3) Includes the income tax effect on non-GAAP net income adjustments related to stock-based compensation expense and employer payroll taxes related to stock releases and option exercises, amortization of acquired intangibles and other items, which include acquisition and nonrecurring transaction-related costs, lease exit activity and severance costs related to certain roles that have been eliminated. We exclude one-off severance costs that we incur as part of the normal course of our business operations.

(4) Represents acquisition and nonrecurring transaction-related costs.

(5) Represents acquisition and nonrecurring transaction-related costs and lease exit activity.

(6) Represents cash paid for acquisition and nonrecurring transaction-related costs and severance costs related to certain roles that have been eliminated.

Definitions of our Non-GAAP Measures

Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted EBITDA Excluding Interest Income on Funds Held for Clients, and Adjusted EBITDA Excluding Interest Income on Funds Held for Clients Margin

Adjusted EBITDA is calculated as net income before interest expense, income tax expense, and depreciation and amortization expense, adjusted to eliminate stock-based compensation expense and employer payroll taxes related to stock releases and option exercises and other items as described above in this release. Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by total revenues.

Adjusted EBITDA excluding interest income on funds held for clients is calculated in the same manner as Adjusted EBITDA and is further adjusted to eliminate interest income on funds held for clients. Adjusted EBITDA excluding interest income on funds held for clients margin is Adjusted EBITDA excluding interest income on funds held for clients divided by recurring and other revenue.

Adjusted Gross Profit and Adjusted Gross Profit Margin

Adjusted gross profit is adjusted to eliminate stock-based compensation expense and employer payroll taxes related to stock releases and option exercises, the amortization of capitalized internal-use software costs and certain acquired intangibles and other items as described above in this release.

Adjusted gross profit margin is calculated as adjusted gross profit as described in the preceding sentence divided by total revenues.

Non-GAAP Operating Income, Non-GAAP Net Income, and Non-GAAP Income Per Share

Non-GAAP operating income is adjusted to eliminate stock-based compensation expense and employer payroll taxes related to stock releases and option exercises, the amortization of acquired intangibles and other items as described above in this release.

Non-GAAP net income and non-GAAP net income per share are adjusted to eliminate stock-based compensation expense and employer payroll taxes related to stock releases and option exercises, the amortization of acquired intangibles and other items as described above in this release, including the income tax effect on these items.

Non-GAAP Sales and Marketing Expense, Non-GAAP Sales and Marketing Expense Margin, Non-GAAP Total Research and Development, Non-GAAP Total Research and Development Margin, Non-GAAP General and Administrative Expense, and Non-GAAP General and Administrative Expense Margin

Non-GAAP sales and marketing expense is adjusted to eliminate stock-based compensation expense and employer payroll taxes related to stock releases and option exercises and other items as described above in this release. Non-GAAP sales and marketing margin is calculated by dividing non-GAAP sales and marketing by total revenues.

Non-GAAP total research and development is adjusted for capitalized internal-use software costs paid and to eliminate stock-based compensation expense and employer payroll taxes related to stock releases and option exercises and other items as described above in this release. Non-GAAP total research and development margin is calculated by dividing non-GAAP total research and development by total revenues.

Non-GAAP general and administrative expense is adjusted to eliminate stock-based compensation expense and employer payroll taxes related to stock releases and option exercises, the amortization of certain acquired intangibles and other items as described above in this release. Non-GAAP general and administrative margin is calculated by dividing non-GAAP general and administrative expense by total revenues.

Free Cash Flow, Free Cash Flow Margin, Free Cash Flow Excluding Interest on Funds Held for Clients, Free Cash Flow Excluding Interest on Funds Held for Clients Margin, Adjusted Free Cash Flow Excluding Interest on Funds Held for Clients and Adjusted Free Cash Flow Excluding Interest on Funds Held for Clients Margin

Free cash flow is defined as net cash provided by operating activities less capitalized internal-use software costs and purchases of property and equipment. Free cash flow margin is calculated by dividing free cash flow by total revenues.

Free cash flow excluding interest income on funds held for clients is defined in the same manner as free cash flow but also excludes interest income on funds held for clients. Free cash flow margin excluding interest income on funds held for clients is calculated by dividing free cash flow excluding interest income on funds held for clients by recurring and other revenue.

Adjusted free cash flow excluding interest income on funds held for clients is defined in the same manner as free cash flow excluding interest income on funds held for clients plus cash paid for other items as described above in this release. Adjusted free cash flow margin excluding interest income on funds held for clients is calculated by dividing adjusted free cash flow excluding interest income on funds held for clients by recurring and other revenue.