Paylocity (PCTY) Q1 2027 earnings summary

Executive summary

• Q1 FY27 revenue rose 10.7% YoY to $451.7M; recurring and other revenue increased 12% to $424.5M.

• Adjusted EBITDA reached $159.5M, up from $146.4M; net income was $57.6M and diluted EPS was $1.07.

• Strong execution, retention and product adoption supported higher FY27 revenue and profitability guidance.

Financial highlights

• Gross profit was $304.1M versus $279.8M; operating income was $82.2M versus $74.2M.

• Adjusted EBITDA margin was 35.3%; adjusted EBITDA excluding client-fund interest income was $132.3M, up from $117.1M.

• Interest income on funds held for clients declined 7% to $27.2M; recurring and other revenue accounted for 94% of total revenue versus 93% a year earlier.

• Operating cash flow was $79.7M versus $86.5M; TTM free cash flow was $416.7M, or 23.0% of revenue, versus $336.0M, or 20.5%.

• Diluted weighted-average shares fell to 53.7M from 55.9M.

Outlook and guidance

• Q2 recurring and other revenue guidance is $423.0M–$428.0M (~10% YoY growth); total revenue is $452.5M–$457.5M (~9% growth).

• Q2 adjusted EBITDA guidance is $152.5M–$156.5M, or $123.0M–$127.0M excluding client-fund interest income.

• FY27 recurring and other revenue guidance is $1.792B–$1.807B (~9% growth); total revenue is $1.910B–$1.925B (~8% growth), up $15M and $30M at the respective midpoints.

• FY27 adjusted EBITDA guidance is $711.5M–$721.5M, or $593.5M–$603.5M excluding client-fund interest income.

• Guidance assumes no further rate changes in FY27 after the September 25 bps increase and flat YoY workforce levels.