PCTYNasdaqServices-Prepackaged SoftwareUS GAAP · USD

Paylocity Holding Corp

Paylocity Holding Corp is a U.S.-based software company that provides cloud-based human capital management, payroll, and spend management solutions. Its platform is used by employers to manage the employee lifecycle, payroll processing, benefits administration, time and labor, and related workforce workflows through a single SaaS system.

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Revenue1,771m USD
+11.0 %y/y
Operating profit (EBIT)386m USD
+27.0 %y/y
EBIT margin21.8%
+2.7 ppy/y
Net income270m USD
+18.8 %y/y
Free cash flow497m USD
+22.7 %y/y

Fiscal year 2026 · change from previous year

Development 2021–2026

05001,0001,5002,000m USD2021: 636 m USD2021: EBIT 58 m USD20212022: 853 m USD2022: EBIT 85 m USD20222023: 1,175 m USD2023: EBIT 155 m USD20232024: 1,403 m USD2024: EBIT 260 m USD20242025: 1,595 m USD2025: EBIT 304 m USD20252026: 1,771 m USD2026: EBIT 386 m USD20261,771386
RevenueOperating profit (EBIT)
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Business

Share of revenue
HCM software35 %

Core human capital management tools for employee records, HR workflows, recruiting, and lifecycle management.

Payroll and tax services40 %

Payroll processing, payroll reporting, and tax filing services delivered through the platform.

Benefits and time management15 %

Benefits enrollment, time and labor, and related workforce administration modules.

Spend management5 %

Software for managing employee-related and business spend within the broader platform.

Interest income on client funds5 %

Interest earned on funds held for clients in connection with payroll processing.

Products

Reported · share of revenue
96.1%FY2026100 %
  • Recurring Fees96.1 %
  • Nonrecurring Fees3.9 %

Source: 10-K FY2026, revenue the company reports per product line (SEC XBRL). Shares are of the lines shown and add up to 100 %.

Customers

Paylocity sells primarily to U.S. employers, with a client base concentrated in organizations averaging over 150 employees. Its customers span for-profit and non-profit businesses across industries such as business services, financial services, healthcare, manufacturing, restaurants, retail, and technology. The platform is designed for organizations that want to outsource or automate payroll and HR administration while improving employee experience and internal communication.

Mid-market employers

U.S. companies averaging over 150 employees that buy HCM and payroll software to automate HR and compliance workflows.

For-profit businesses

Commercial customers across industries that use the platform for payroll, benefits, time tracking, and spend management.

Non-profit organizations

Non-profit clients that need payroll processing, employee administration, and compliance support.

Referral-driven buyers

Prospects introduced by brokers, 401(k) advisors, benefits administrators, HR consultants, and accountants.

Strategy

Paylocity’s strategy is to deepen its position as a cloud HCM platform by expanding product breadth, improving the employee experience, and increasing automation across HR and payroll workflows. It also relies on a direct sales force and a broad referral ecosystem to generate new client demand, while continuing to invest in platform capabilities, infrastructure, and integrations that support retention and cross-sell.

Broaden the platform beyond payrollMedium term

More modules increase customer stickiness and raise the value of each client relationship.

Scale referral-led and direct sales acquisitionShort term

The company uses brokers, advisors, and a direct sales force to reach mid-market employers efficiently.

Invest in platform and infrastructureMedium term

Ongoing product and infrastructure investment supports growth, integrations, and service reliability.

Geography

Paylocity’s business is concentrated in the United States, where it serves clients across defined geographic sales territories. The company’s operating model, sales force, and partner ecosystem are built around the U.S. market, and the available disclosure does not indicate meaningful international revenue concentration.

Risks

Paylocity depends on recurring SaaS demand from employers, so slower hiring, weaker economic conditions, or reduced client spending can affect adoption and retention. The business also faces cybersecurity, third-party integration, and client-funds risks because it processes sensitive payroll and employee data and holds funds on behalf of customers.

Sorted by severity
LowMediumHighLowMediumHighImpact →Likelihood →Cybersecurity and data breach exposure1Economic slowdown and employment weakness2Client funds investment and liquidity risk3Third-party integration and vendor dependency4Seasonality in payroll and tax-related activity5
Impact is the risk’s severity and likelihood how probable it is over the next few years, both assessed from the company’s reports. Numbers match the list.
  1. Cybersecurity and data breach exposureImpact: HighLikelihood: Medium

    The platform handles sensitive payroll, HR, and employee data and relies on third-party systems.

    ExposureClient dataPlatform integrityReputation
  2. Economic slowdown and employment weaknessImpact: HighLikelihood: Medium

    Demand for payroll and HCM software is tied to client hiring levels and workforce activity.

    ExposureNew client salesRetentionContract expansion
  3. Client funds investment and liquidity riskImpact: HighLikelihood: Low

    Funds held for clients are invested in marketable securities and deposited in consolidated accounts.

    ExposureTreasury assetsClient trustLiquidity
  4. Third-party integration and vendor dependencyImpact: MediumLikelihood: Low

    The product ecosystem depends on external partners such as benefits, 401(k), and insurance providers.

    ExposureService continuityData exchangeCustomer experience
  5. Seasonality in payroll and tax-related activityImpact: MediumLikelihood: Low

    W-2 preparation and payroll tax collection create seasonal revenue and gross profit patterns.

    ExposureQuarterly comparabilityWorking capital
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Accounting

Judgemental items
Revenue recognition for recurring service fees

Most revenue comes from monthly payroll and HR services, so contract timing and service delivery matter.

Impact: Affects reported revenue timing and comparability

Seasonality in fiscal third quarter

W-2 preparation and payroll tax collection increase activity in the March quarter.

Impact: Creates quarter-to-quarter swings in revenue and gross profit

Interest income on funds held for clients

This revenue line depends on client fund balances and market interest rates.

Impact: Can materially change total revenue mix

Estimates and judgments

Management uses estimates for revenue, expenses, and asset/liability balances.

Impact: Actual results may differ from reported amounts

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Last updated: 24/09/2026