Paylocity Raises Fiscal 2027 Outlook After 12% Recurring and Other Revenue Growth

The Tip Desk · November 7, 2026 · 3 min read

Recurring and other revenue reached $424.5 million in the quarter ended September 30, 2026, and the company lifted full-year revenue and profitability guidance.

Paylocity Holding Corporation (PCTY), a cloud-based provider of HCM, finance and IT software, reported recurring and other revenue of $424.5 million for the first quarter of fiscal 2027, up 12.0% from a year earlier, and raised its full-year outlook for both revenue and profitability.

Total revenue was $451.7 million, up 10.7% year over year. Recurring and other revenue growth of 12.0% was slightly below the 12.4% year-over-year pace recorded in the fourth quarter of fiscal 2026. President and Chief Executive Officer Toby Williams said fiscal 2027 was off to a strong start, citing go-to-market execution, revenue retention and AI-driven products, and said first-quarter results and momentum into selling season were helping to drive a strong increase to fiscal 2027 guidance.

GAAP operating income was $82.2 million, compared with $74.2 million a year earlier. Non-GAAP operating income was $133.9 million. GAAP net income was $57.6 million, or $1.07 a share on 53.7 million diluted weighted-average shares, versus $48.0 million, or $0.86 a share, a year earlier. Adjusted EBITDA was $159.5 million; excluding interest income on funds held for clients, it was $132.3 million.

Gross profit was $304.1 million. Adjusted gross profit was $333.2 million. Sales and marketing expense was $101.1 million. Research and development expense was $59.0 million. General and administrative expense was $61.7 million. Interest income on funds held for clients was $27.2 million.

The company completed the acquisition of Aidora Inc. in July 2026 to expand AI-powered leave management, using $10.6 million of cash for acquisitions in the quarter. Williams said growth continued to be led by Ignite AI, including a recently announced Recruiting Optimizer, and that the company was pleased with early response to Elevate Solutions and Paylocity for Retirement.

Cash and cash equivalents were $194.5 million as of September 30, 2026. Long-term debt was $131.3 million after $50.0 million of credit-facility borrowings. Net cash provided by operating activities was $79.7 million in the quarter. For the trailing twelve months ended September 30, 2026, net cash from operating activities was $526.5 million, or 29.0% of total revenue, and free cash flow was $416.7 million, or 23.0% of total revenue.

Paylocity repurchased $152.5 million, or 1.1 million shares, in the quarter. Since May 2024 it has repurchased $850.2 million, or 5.7 million shares.

For the second quarter of fiscal 2027, the company expects recurring and other revenue of $423.0 million to $428.0 million, about 10% growth over the fiscal 2026 second quarter, and total revenue of $452.5 million to $457.5 million, about 9% growth. Adjusted EBITDA is expected at $152.5 million to $156.5 million, or $123.0 million to $127.0 million excluding interest income on funds held for clients.

For full fiscal 2027, Paylocity now expects recurring and other revenue of $1.792 billion to $1.807 billion, about 9% growth over fiscal 2026, and total revenue of $1.910 billion to $1.925 billion, about 8% growth. Adjusted EBITDA is expected at $711.5 million to $721.5 million, or $593.5 million to $603.5 million excluding interest income on funds held for clients.