Paylocity Q4 Earnings Call Highlights

Paylocity delivered solid fiscal 2026 results: Total revenue rose 11% to approximately $1.8 billion, recurring revenue increased 12.2%, and the client base grew 7% to about 44,400. Full-year adjusted EBITDA reached $654.9 million, while free cash flow increased 24.8%. AI and product expansion are central to the growth strategy. Paylocity launched Ignite AI, acquired leave-management provider Aidora, and is integrating AI recruiting capabilities from Grayscale as premium offerings across its HCM platform. Fiscal 2027 guidance calls for slower growth but continued profitability gains: The company expects recurring and other revenue growth of about 8%, total revenue growth of about 7%, and adjusted EBITDA of $690 million to $700 million. Paylocity also repurchased $398.1 million of stock during fiscal 2026 and has $1.3 billion remaining under its authorization.

Paylocity NASDAQ: PCTY reported fourth-quarter fiscal 2026 recurring revenue growth of 12.4% and total revenue growth of 11%, as the human capital management software provider highlighted product expansion, artificial intelligence initiatives and continued client growth. For the fiscal year ended June 30, 2026, Paylocity generated approximately $1.8 billion in total revenue, up 11%, while recurring revenue increased 12.2%. The company ended the year with about 44,400 clients, a 7% increase from fiscal 2025, and average revenue per client rose more than 5% to roughly $37,200.

Executive Chairman Steve Beauchamp said the company’s investments in research and development have supported recurring revenue growth and higher client spending. He pointed to Paylocity’s platform spanning HCM, finance and IT functions, along with its expanding AI capabilities.

Paylocity emphasized its recent launch of Ignite AI, a set of AI capabilities embedded in existing customer workflows. The offering includes a candidate-fit agent for recruiting, a talent-rediscovery agent designed to identify potential candidates from existing talent pools, and an answers-and-insight agent intended to help HR and payroll teams obtain client-specific information through natural-language questions. The company also introduced an Ignite AI Hub, a centralized dashboard intended to provide customers visibility into AI usage, including questions answered, tasks completed and issues resolved. Beauchamp said AI interactions nearly doubled sequentially during the quarter. President and CEO Toby Williams said AI is becoming a larger part of conversations with prospective customers, particularly when customers evaluate tools to improve efficiency in payroll, recruiting and time-and-labor management. However, management said its approach to monetization will vary based on the value provided to clients. “We’re really focused on delivering value to the clients,” Beauchamp said. “When we deliver enough value to the clients, we look to be able to monetize that value.”

The company recently acquired Aidora, an AI-native leave-of-absence management provider. Williams said Paylocity plans to integrate Aidora’s capabilities into its suite as a premium offering. The company is also integrating AI-powered recruiting automation capabilities from its prior Grayscale acquisition, which it expects to offer as a premium product. Other recent product initiatives include Elevate Solutions, a managed-services offering, and Paylocity Retirement, which brings retirement-plan administration and employee savings tools to the company’s platform. Williams said financial advisors have responded positively to the retirement offering.