The Q4 beat confirms strong execution, but FY2027 guidance points to a material deceleration (11% → 7-8% revenue growth). The deferred contract cost accounting change adds ~1.3% to EBITDA margins but is non-cash. Watch the conference call for commentary on client adds, ARPU trends, and whether the 7% growth floor is conservative. The stock may trade range-bound as the market weighs the beat against the slowdown.
Price Chart
Executive Summary
Paylocity reported Q4 FY2026 total revenue of $444.7M (+11.0% YoY) and non-GAAP EPS of $1.84 (+18% YoY), beating consensus estimates of $431.7M and $1.61. However, FY2027 guidance implies deceleration to ~7-8% total revenue growth from 11% in FY2026, and the company changed its deferred contract cost amortization to 8 years, artificially boosting EBITDA margins by 120-140 bps. The beat is positive but the growth deceleration tempers the outlook.
Key Financial Metrics
Key Facts
- Q4 FY2026 total revenue of $444.7M (+11.0% YoY) beat consensus of $431.7M
- Q4 non-GAAP EPS $1.84 vs consensus $1.61 (+14.2% surprise)
- FY2026 total revenue $1.771B (+11.0% YoY); recurring revenue $1.651B (+12.2%)
- FY2027 guidance: total revenue $1.880-1.895B (~7% growth), recurring revenue $1.777-1.792B (~8% growth)
- GAAP net income $60.3M Q4 / $269.7M FY, diluted EPS $1.12 / $4.92
- Adjusted EBITDA FY2026 $654.9M (37.0% margin); FY2027 guided $690-700M
- Operating cash flow FY2026 $533.3M (30.1% margin); free cash flow $427.8M (24.2% margin)
- Deferred contract cost amortization changed from 7 to 8 years, expected to boost FY2027 EBITDA margins by 120-140 bps
- Repurchased $398.1M or 2.8M shares in FY2026; $697.8M or 4.6M shares since May 2024
- Acquired Grayscale Labs in April 2026 for AI-powered recruiting
- Long-term debt $81.3M at June 30, 2026; cash and equivalents $271.9M
- Client base increased ~7% YoY; average revenue per client expanding
Financial Impact
Q4 revenue beat by ~$13M (3.0%) and EPS beat by $0.23 (14.2%); FY2027 guidance implies 7% revenue growth vs 11% in FY2026, a deceleration of ~400 bps
Risk Factors
- Decelerating revenue growth from 11% to 7-8% in FY2027 could lead to multiple compression
- Guidance implies ~8% recurring revenue growth vs recent 12%+; any further slowdown would be negative
- Elevate Solutions and AI product launches may take time to contribute materially
- Heavy buyback ($398M in FY2026) reduces share count but signals limited organic reinvestment opportunities
- Interest income on funds held for clients declined YoY ($119.96M vs $123.42M) due to rate environment
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 6 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0001591698-26-000066 |
| Document: pcty-20260804.htm | 0001591698-26-000066 |
| Document: 0001591698-26-000066-index-headers.html | 0001591698-26-000066 |
| Document: 0001591698-26-000066-index.html | 0001591698-26-000066 |
| Document: 0001591698-26-000066.txt | 0001591698-26-000066 |
| 8-K Data (Synthetic) | 0001591698-26-000066 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Oct 26, 2026 today | Insider Cluster | $176.46 | awaiting T+1 | — | $176.46 (+0.00%) |
Oct 23, 2026 3d ago | Institutional Cluster | $177.19 $176.46 | ▼ −0.41% | ▼ −1.12% | $176.46 (−0.41%) |
Oct 22, 2026 4d ago | DEFA14A / DEF 14A | $177.67 $177.19 | ▼ −0.27% | ▲ +0.25% | $176.46 (−0.68%) |
Oct 22, 2026 5d ago | Insider Cluster | $177.19 $176.46 | ▲ +0.41% | ▲ +1.12% | $176.46 (+0.41%) |
Oct 21, 2026 5d ago | Insider Cluster | $177.67 $177.19 | ▲ +0.27% | ▼ −0.25% | $176.46 (+0.68%) |
Oct 19, 2026 8d ago | Insider Cluster | $170.06 $169.33 | ▲ +0.43% | ▲ +0.95% | $176.46 (−3.76%) |
Oct 16, 2026 10d ago | Insider Cluster | $166.17 $170.06 | ▲ +2.34% | ▲ +2.01% | $176.46 (+6.19%) |
Sep 10, 2026 6w ago | Press Release | $142.86 $141.66 | ▼ −0.84% | ▼ −1.69% | $176.46 (+23.52%) |
Sep 9, 2026 6w ago | Insider Cluster | $142.86 $141.66 | ▼ −0.84% | ▼ −1.69% | $176.46 (+23.52%) |
Sep 1, 2026 7w ago | Insider Cluster | $154.29 $154.29 | · 0.00% | ▼ −1.05% | $176.46 (+14.37%) |
US Market Status
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