Q3 Fiscal 2026
Investor Presentation
Our Business
We are a leading provider of cloud-based HR, Finance, and IT solutions with AI embedded into everyday workflows that services a diversified set of clients across verticals & geographies
Headquarters
Schaumburg, IL
clients
employees target market
avg. client size
employees
Demonstrated ability to drive strong revenue growth with increasing profitability
Rule of
70%
▲
Rule of
56%
▲
Rule of
50%
▲
Rule of
47%
▲
11% YoY
growth
$197
$220
▲
$1,175
$375
$1,403
$506
$1,595
$583
$1,758
$640
$455
$502
FY23 FY24 FY25 FY26
Guidance
Q3 FY25 Q3 FY26
Total RevenueAdj. EBITDA
(FYE June 30, $mm)
*Rule of % = Total Revenue Growth + Adj. EBITDA Margin
3
HCM Addressable Market (TAM)
We remain squarely focused on increasing our limited penetration of a large, and growing, total addressable market
Current average client size of
150+employees
41,650 clients
as of June 30, 2025
Approximately
1.3 million businesses
in the 10-5,000 segment of the market
On average purchase ~50%+ of suite
73 million employeesin the 10-5,000
segment of the market
~3% penetrated into addressable market
Source: U.S. Census Bureau
Further increasing TAM with Finance and IT solutions
4
HCM Competitive Landscape
by Paychex
Core Market
in-house solutions
~3,000 regional providers
Enterprise Market (10,000+
Average Client Size
Employees)
5,000
Employees
Mid-Market
(51-1,000
Employees)
SMB Market
(1-50
Employees)
Workday
Limited overlap in target market. Enterprise solutions focused on companies with several thousand employees and up - do not see them often competitively
Ultimate Kronos Group / Dayforce
Enterprise solution focusing primarily on >1,000 employee companies - seen in deals at the higher-end of our target market
Paycom
Average client size is larger than ours, generally seen at the middle / higher-end of our target market
Paycor (by Paychex)
Average client size is smaller than ours, generally seen at the middle / lower-end of our target market
ADP / PAYX
Biggest competitors - compete
throughout our target market
Regionals
Smaller to mid-part of our market
In-House
Primarily lower end of the market
Paylocity differentiates with a payroll, HCM, spend management, and IT platform with AI embedded directly into everyday workflows that is built for the modern workforce + best-in-class client support
Focused on taking share in our target market of roughly
1.3 million businesses
5
FINANCE
HR
IT
6
UNIFIED PLATFORM FOR
HR, FINANCE, & IT
HR
Talent, benefits, engagement,
and compliance
Finance
Payroll, time tracking, GL integration, and budgeting
IT
System Access and Asset Management
The Most Modern Platform HCM, Finance, & IT
7
Sustained R&D Investment Drives Product Expansion and Revenue Growth
Over 180% increase in Realized ARPU since 2014 Ongoing Product Innovation
Community
Video
Learning
Employee Voice
Market Pay
Recruiting & Onboarding
Benefits
Time & Labor
Payroll
HCM
Human Resources
Performance & Compensation
$94m
$22.0k
$117m
$25.5k
$170m
$30.3k
$200m
$32.8k
$227m
$35.3k
FY21 FY22 FY23 FY24 FY25
Expense Management
AP
Automation
Corporate Cards
Guided Procurement
Headcount Planning
Asset Management
Access Management
Total Non-GAAP R&D Realized ARPU (1)(1) ARPU = Recurring & Other Revenue / # of Clients
Finance & IT
8
The Most Complete HCM Platform for The Modern Workforce
HR
Time & Labor
Recruiting
Payroll
Process Payroll in a few Clicks
Submit payroll through a simple navigation flow reducing manual data entry and minimizing errors
Simplify Tasks for HR and Employees
Save time and money with intuitive scheduling and time tracking, bringing your team into the future of work
Find and Retain Top Talent
Benefits
Get top candidates in the door quickly and keep them on the path to success to drive satisfaction and growth
Setup Frictionless Benefits
Easily set up enrollment, navigate compliance and automate processes
9
Providing HR the tools to better engage with their employees
Employee Voice
Learning
Employee Home
Recognition & Rewards
Community & Video
Feeling heard & valued
Create engagement with opportunities for feedback & recognition
Flexibility & wellbeing
Empower employees to manage their shifts & pay schedule without HR overhead
Connection across the org
Foster transparency and a sense of belonging with open communication
Mobile & on-demand
Everything employees need at
their fingertips on any device
10
Finance & spend management software that puts CFOs in control
Expense Management
Guided Procurement All Spend on a Single Platform
Enables real-time visibility, faster close, seamless
adoption for every part of the organization
A Singular Employee Record
AP Automation
A single source of truth for Finance and HR processes for increased synergy, greater efficiencies, and better decision making
A Unified, Differentiated Experience Enhances employee satisfaction and increases efficiencies across HR- and spend-related processes
Significant TAM Expansion
Corporate Cards
Opportunity to move into high-growth
Office of the CFO category 11
Complete control over IT identity and hardware management
Asset Management
Access Management
Automated Access Management
Provision and deprovision accounts automatically using employee lifecycle data for a single source of truth between HR and IT
Smarter Asset Management
Track, order, assign, and update employee hardware from a unified platform to stay organized across all employee devices
Fewer Manual Touchpoints
Leverage employee data to drive system access, reducing risk and IT workload while freeing up hours of IT and HR time for strategic work
12
HCM Competitive Landscape
Where Our Clients Come From
Combination of ADP / Paychex represents our largest source of new clients
In-house solutions
(did not use a traditional 3rd party provider)
Local / regional
Why we win
Industry-leading product suite combined with strong focus on client service resulting in 92%+ revenue retention
payroll providers
All other competitors and new business formation
13
Go-To-Market StrategyWe hire experienced sales professionals
Most have prior HCM platform, HR technology, spend management, IT or B2B sales experience
All sales are direct through our salesforce
Our reps are focused on deals with 10-5,000 employees with our largest opportunities supported by our most experienced teams
reps in fiscal 2026
From 885 reps in
fiscal 2025
All major U.S. geographies covered, but
room to add reps in every state
Our client base is well diversified across all industry verticals and geographies
14
Strong Referral Channel
Channel Value Proposition
Paylocity is the most complete platform for the modern workforce which helps our channel partners reach employees in new ways
We do not compete with our channel partners
We do not sell insurance or benefits; other major payroll / HCM competitors compete with brokers and financial advisors for insurance business ssets
Flexible platform
Integrations and open APIs for insurance, 401k and other providers. We continue to invest in integrations to add value for the broker community
Partner Portal e
Providing visibility to brokers and helping drive change at their clients by providing unique data insights
of our new client revenue comes from referrals from channels
15
Continued Client Service Investments Support Strong Revenue Retention
Over 92%+ net revenue retention as a public company
Net Revenue Retention
Providing the most
modern platform
Delivering world class service
Retention Churn(1)*Net Revenue Retention = total revenue for the preceding 12 months, less the annualized value of revenue lost during the preceding 12 months, divided by our total revenue for the preceding 12 months. We calculate the annualized value of revenue lost by summing the recurring fees paid by lost clients over the previous twelve months prior to their termination if they have been a client for a minimum of twelve months. For those lost clients who became clients within the last twelve months, we sum the recurring fees for the period that they have been a client and then annualize the amount. We exclude interest income on
funds held for clients from the revenue retention calculation. (1)Includes controllable and uncontrollable churn 16
Financials
Recurring and Other Revenue
Long-Term Financial Targets
Increased profitability targets reflect commitment to driving greater operational efficiency over time
Current
Total Revenue $3Bn
Adjusted Gross Profit 80%+
Note: Financial targets based on percentage of total revenue
Squarely focused on revenue growth while demonstrating
meaningful leverage in our business model
15% YoY
growth
▲
11% YoY
growth
▲
30% YoY
growth
▲
17% YoY
growth
▲
$ millions
Non-GAAP total R&D | 10% - 15% |
Non-GAAP Sales & Marketing | 15% - 20% |
Non-GAAP General & Administrative | 5% - 7% |
Adjusted EBITDA | 40% - 45% |
Free Cash Flow | 25% - 30% |
Stock-Based Compensation | 5% |
$848
$853
$1,098
$1,175
$1,282
$1,403
$1,472
$1,595
$1,641
$1,758
FY22 FY23 FY24 FY25 FY26
Guidance
Recurring and Other Revenue Total Revenue17
Financials (cont.)
Driving continued margin expansion on an annual basis
Adjusted EBITDA
excluding interest income on funds held for clients
$385
$299
$ millions
31.9%
Margin
▲
27.2%
Margin
▲
30.0%
Margin
▲
31.2%
Margin
▲
$460
$523
Driving greater leverage over time
Successfully driven ~470bps of Adj. EBITDA margin leverage excl. interest income on funds held for clients since FY23
Intend to drive leverage primarily through
cost of sales and G&A on a go forward basis
FY23 FY24 FY25 FY26 Guidance
18
Financials (cont.)
Driving continued margin expansion on an annual basis
Free Cash Flow
excluding interest income on funds held for clients
$ millions
14.9%
Margin
18.6%
Margin
▲
Demonstrating meaningful FCF leverage
Successfully driven 550bps+ of FCF margin leverage excl. interest income on funds held for clients since FY23
12.7%
Margin
▲
$139
14.4% ▲
Margin
$219
▲
$299
Repurchased ~4.1m shares of common stock at an average price of $157.55 per share for
~$650m in aggregate since May 2024
Recently increased share repurchase authorization by $1.0Bn in April 2026; $1.35Bn total authorization available as of May 2026
$185
FY23 FY24 FY25 LTM Mar FY26
Strong Balance Sheet - $300m Cash & Cash Equivalents as of 3/31/26
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Financials (cont.)
Driving consistent growth in Earnings per Share on an annual basis
Earnings per Share
Based on Diluted share count
Driving consistent EPS growth through:
Margin leverage - through a combination of economies of scale and operating expense management, primarily in gross margin and G&A
Stock-based compensation - reduced by
~350bps as a % of revenue from FY23 to FY25
Share repurchases of ~$650m in aggregate since May 2024, reducing weighted average shares outstanding by over 2%
$2.49
$1.61
$3.63
$4.02
FY22 FY23 FY24 FY25
20
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