Paylocity (PCTY) Q3 2025 earnings summary

Executive summary

• Q3 2025 total revenue reached $454.5 million, up 13% year-over-year, with recurring and other revenue at $421.1 million, up 15% year-over-year, driven by strong sales execution and client growth.

• Product innovation, including AI Assistant enhancements and new recruiting/onboarding features, continues to drive differentiation and higher average revenue per client.

• Airbase acquisition completed and fully integrated, expanding spend management capabilities and receiving positive market feedback.

• Broker channel remains a key growth driver, representing over 25% of new business in Q3.

• Expanded product suite and client base, now serving 39,050 clients with an average client size of 150+ employees.

Financial highlights

• Adjusted gross profit for Q3 2025 was $350.1 million (77% margin), up from $304.6 million in Q3 FY2024.

• Adjusted EBITDA for Q3 2025 was $197.1 million (43.4% of revenue), up from $167.9 million in Q3 FY2024.

• GAAP operating income for Q3 2025 was $127.0 million; net income was $91.5 million ($1.61 per diluted share).

• Cash and cash equivalents at quarter-end were $477.8 million; $243.8 million outstanding on credit facility (Airbase acquisition), with $81 million repaid in Q3.

• Repurchased $150 million in shares (approx. 800,000 shares) through April 2025; $200 million remains under the buyback program.

Outlook and guidance

• FY25 recurring and other revenue guidance raised to $1.460–$1.465 billion (14% growth); total revenue guidance to $1.580–$1.585 billion (13% growth).

• FY25 Adjusted EBITDA expected at $571–$575 million; excluding interest income, $451–$455 million.

• Q4 2025 recurring and other revenue expected at $358.1–$363.1 million (11% growth); total revenue at $385.5–$390.5 million (9% growth).

• Guidance assumes flat workforce levels in Q4 and continued investment in R&D and sales.

• Long-term targets include $2B+ revenue, 75-80% adjusted gross profit, and 35-40% adjusted EBITDA margin.