Operating income scaled to $158.3 million in 2026Q3, reflecting improved efficiency despite structural gross margin ceilings hovering between 67% and 72%.
| Metric | TTM | Jun'25 | Jun'24 | Jun'23 | Jun'22 | Jun'21 | Jun'20 | Jun'19 | Jun'18 | Jun'17 | Jun'16 | Jun'15 | Jun'14 | Jun'13 | Jun'12 | Jun'11 |
|---|
| Sales/Revenue | 1.73B | 1.6B | 1.4B | 1.17B | 852.65M | 635.63M | 561.33M | 467.63M | 377.53M | 300.01M | 230.7M | 152.7M | 108.69M | 77.29M | 55.1M | 39.48M |
| Revenue Growth % | 14.67% | 13.74% | 19.4% | 37.76% | 34.14% | 13.24% | 20.04% | 23.87% | 25.84% | 30.04% | 51.08% | 40.49% | 40.62% | 40.29% | 39.54% | - |
| Cost of Goods Sold | 530.34M | 498.22M | 441.73M | 367.04M | 287M | 219.3M | 182.01M | 153.85M | 149.2M | 123.99M | 98.08M | 70.9M | 55.09M | 39.67M | 29.09M | 21.75M |
| COGS % of Revenue | - | 31.23% | 31.5% | 31.25% | 33.66% | 34.5% | 32.42% | 32.9% | 39.52% | 41.33% | 42.52% | 46.43% | 50.69% | 51.32% | 52.81% | 55.07% |
| Gross Profit | 1.2B | 1.1B | 960.79M | 807.56M | 565.65M | 416.33M | 379.32M | 313.78M | 228.33M | 176.02M | 132.62M | 81.8M | 53.59M | 37.63M | 26M | 17.74M |
| Gross Margin % | 69.3% | 68.77% | 68.5% | 68.75% | 66.34% | 65.5% | 67.58% | 67.1% | 60.48% | 58.67% | 57.48% | 53.57% | 49.31% | 48.68% | 47.19% | 44.93% |
| Gross Profit Growth % | - | 14.18% | 18.97% | 42.77% | 35.87% | 9.76% | 20.89% | 37.42% | 29.72% | 32.73% | 62.12% | 52.64% | 42.43% | 44.71% | 46.58% | - |
| Operating Expenses | 829.41M | 792.97M | 700.69M | 652.53M | 481.06M | 358.29M | 313.15M | 257.56M | 212.38M | 168.73M | 136.17M | 95.72M | 60.61M | 37.6M | 23.23M | 17.73M |
| OpEx % of Revenue | - | 49.71% | 49.96% | 55.55% | 56.42% | 56.37% | 55.79% | 55.08% | 56.26% | 56.24% | 59.02% | 62.69% | 55.77% | 48.64% | 42.17% | 44.89% |
| Selling, General & Admin | 612.29M | 587.12M | 522.36M | 488.54M | 378.15M | 281.58M | 250.38M | 207.23M | 174.74M | 139.63M | 109.43M | 75.86M | 50.26M | 30.77M | 21.45M | 16.16M |
| SG&A % of Revenue | - | 36.81% | 37.24% | 41.59% | 44.35% | 44.3% | 44.61% | 44.31% | 46.28% | 46.54% | 47.43% | 49.68% | 46.24% | 39.81% | 38.92% | 40.93% |
| Research & Development | 216.9M | 205.85M | 178.33M | 163.99M | 102.91M | 76.71M | 62.77M | 50.33M | 37.65M | 29.1M | 26.74M | 19.86M | 10.36M | 6.83M | 1.79M | 1.56M |
| R&D % of Revenue | - | 12.9% | 12.72% | 13.96% | 12.07% | 12.07% | 11.18% | 10.76% | 9.97% | 9.7% | 11.59% | 13.01% | 9.53% | 8.83% | 3.25% | 3.96% |
| Other Operating Expenses | 219K | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Operating Income | 369.37M | 304.02M | 260.09M | 155.03M | 84.59M | 58.04M | 66.17M | 56.22M | 15.95M | 7.3M | -3.55M | -13.92M | -7.02M | 31K | 2.77M | 13K |
| Operating Margin % | 21.38% | 19.06% | 18.54% | 13.2% | 9.92% | 9.13% | 11.79% | 12.02% | 4.22% | 2.43% | -1.54% | -9.12% | -6.46% | 0.04% | 5.02% | 0.03% |
| Operating Income Growth % | - | 16.89% | 67.77% | 83.26% | 45.74% | -12.28% | 17.69% | 252.52% | 118.6% | 305.52% | 74.5% | -98.36% | -22738.71% | -98.88% | 21192.31% | - |
| EBITDA | 478.37M | 403.66M | 336.52M | 215.89M | 134.81M | 101.02M | 104.08M | 90.79M | 46.15M | 28.32M | 10.32M | -5.31M | -682K | 5.6M | 7.39M | 3.79M |
| EBITDA Margin % | 27.69% | 25.3% | 23.99% | 18.38% | 15.81% | 15.89% | 18.54% | 19.41% | 12.22% | 9.44% | 4.47% | -3.48% | -0.63% | 7.25% | 13.42% | 9.6% |
| EBITDA Growth % | 28.74% | 19.95% | 55.87% | 60.14% | 33.46% | -2.95% | 14.65% | 96.72% | 62.95% | 174.37% | 294.33% | -678.89% | -112.17% | -24.22% | 94.94% | - |
| D&A (Non-Cash Add-back) | 109.01M | 99.64M | 76.43M | 60.87M | 50.22M | 42.97M | 37.91M | 34.56M | 30.2M | 21.03M | 13.87M | 8.61M | 6.34M | 5.57M | 4.62M | 3.78M |
| EBIT | 369.64M | 304.02M | 260.09M | 155.03M | 84.59M | 58.04M | 66.17M | 56.22M | 15.95M | 7.3M | -3.55M | -13.92M | -7.02M | 31K | 2.77M | 13K |
| Net Interest Income | 0 | -13.05M | -758K | -752K | -498K | 0 | -695K | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Interest Income | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Interest Expense | 0 | 13.05M | 758K | 752K | 498K | 0 | 695K | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Income/Expense | -439K | 5.04M | 16.92M | 3.59M | -997K | -939K | 947K | 1.82M | 802K | 73K | -124K | 54K | 163K | -16K | -196K | -179K |
| Pretax Income | 368.93M | 309.06M | 277.01M | 158.61M | 83.6M | 57.1M | 67.12M | 58.05M | 16.75M | 7.37M | -3.67M | -13.87M | -6.86M | 15K | 2.57M | -166K |
| Pretax Margin % | 21.36% | 19.37% | 19.75% | 13.5% | 9.8% | 8.98% | 11.96% | 12.41% | 4.44% | 2.46% | -1.59% | -9.08% | -6.31% | 0.02% | 4.67% | -0.42% |
| Income Tax | 110.88M | 81.94M | 70.25M | 17.79M | -7.18M | -13.71M | 2.66M | 4.22M | -21.85M | 651K | 177K | 105K | 255K | -602K | 884K | -36K |
| Effective Tax Rate % | 30.06% | 26.51% | 25.36% | 11.22% | -8.59% | -24.02% | 3.97% | 7.28% | -130.42% | 8.83% | -4.82% | -0.76% | -3.72% | -4013.33% | 34.37% | 21.69% |
| Net Income | 258.04M | 227.13M | 206.77M | 140.82M | 90.78M | 70.82M | 64.45M | 53.82M | 38.6M | 6.72M | -3.85M | -13.97M | -7.11M | 617K | 1.69M | -130K |
| Net Margin % | 14.94% | 14.24% | 14.74% | 11.99% | 10.65% | 11.14% | 11.48% | 11.51% | 10.22% | 2.24% | -1.67% | -9.15% | -6.54% | 0.8% | 3.06% | -0.33% |
| Net Income Growth % | 21.56% | 9.85% | 46.83% | 55.13% | 28.18% | 9.87% | 19.75% | 39.45% | 474.55% | 274.45% | 72.44% | -96.51% | -1252.35% | -63.45% | 1398.46% | - |
| Net Income (Continuing) | 258.04M | 227.13M | 206.77M | 140.82M | 90.78M | 70.82M | 64.45M | 53.82M | 38.6M | 6.72M | -3.85M | -13.97M | -7.11M | 617K | 1.69M | -130K |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| EPS (Diluted) | 4.69 | 4.02 | 3.63 | 2.49 | 1.61 | 1.26 | 1.16 | 0.97 | 0.70 | 0.12 | -0.08 | -0.28 | -0.19 | -0.05 | 0.02 | -0.00 |
| EPS Growth % | 16.46% | 10.74% | 45.78% | 54.66% | 27.78% | 8.62% | 19.59% | 38.57% | 483.33% | 258.73% | 73% | -47.37% | -266.8% | -329.2% | - | - |
| EPS (Basic) | - | 4.08 | 3.68 | 2.53 | 1.65 | 1.30 | 1.20 | 1.02 | 0.74 | 0.13 | -0.08 | -0.28 | -0.20 | -0.05 | 0.02 | -0.00 |
| Diluted Shares Outstanding | 55.02M | 56.55M | 56.98M | 56.6M | 56.45M | 56.3M | 55.81M | 55.41M | 54.89M | 54.06M | 50.91M | 50.13M | 36.71M | 44.19M | 44.19M | 44.19M |
| Basic Shares Outstanding | 54.28M | 55.65M | 56.21M | 55.71M | 55.04M | 54.32M | 53.55M | 52.91M | 52.42M | 51.41M | 50.91M | 49.9M | 36.12M | 44.19M | 44.19M | 44.19M |
| Dividend Payout Ratio | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
Mid-market employment volatility
According to recent financial filings, Paylocity's revenue growth has exhibited significant volatility, fluctuating from a 12.5% contraction in 2025Q1 to a 10.5% expansion by 2026Q3, suggesting that the company's PEPM model remains highly sensitive to broader US mid-market employment trends and seasonal tax processing cycles.
The erratic revenue trajectory appears to reflect the company's heavy reliance on client headcount, which acts as a double-edged sword during economic shifts. Investors should monitor whether the recent stabilization in growth rates indicates a successful expansion of the product suite or merely a temporary recovery in client hiring patterns.
As reported in quarterly income statements, Paylocity maintains gross margins near 69% to 72%, which, based on industry data, suggests a structural ceiling driven by the labor-intensive nature of multi-state tax compliance and high-touch client support requirements inherent in the HCM software vertical.
While the company demonstrates strong profitability, the inability to consistently breach the 75% gross margin threshold highlights the service-heavy nature of its business model. Future margin improvement likely depends on the successful integration of AI-driven support tools to reduce the human capital intensity of its service delivery.
Based on the provided income statement data, Paylocity has successfully scaled operating income from $41.2 million in 2025Q1 to $158.3 million in 2026Q3, indicating that the company is beginning to realize significant operating leverage as its revenue base expands relative to fixed overhead costs.
The expansion of operating margins to 31.5% in the most recent quarter suggests that management is effectively managing its SG&A and R&D spend relative to top-line growth. However, this trend warrants further investigation to determine if it is sustainable or if it relies on temporary reductions in discretionary spending.
As evidenced by the periodic spikes in stock-based compensation, which reached $43.7 million in 2025Q2, the quality of reported net income appears periodically impacted by non-cash talent acquisition costs that can significantly distort the underlying profitability of the core software business.
The variability in SBC expenses suggests that investors should focus on adjusted earnings metrics to gain a clearer picture of operational performance. The absence of SBC in certain quarters may imply a shift in compensation strategy or accounting timing that requires careful scrutiny to avoid overestimating the company's cash-generating capacity.
Quick answers to the most common questions about buying PCTY stock.
For fiscal year 2025, Paylocity Holding Corporation (PCTY) reported total revenue of $1.60B. This represents a 3940.2% increase compared to $39.5M in 2011.
Paylocity Holding Corporation (PCTY) is profitable, generating $227.1M in net income for the fiscal year ending 2025 with a net profit margin of 14.2%.
Paylocity Holding Corporation (PCTY) reported an operating income of $304.0M, resulting in an operating profit margin of 19.1%. This margin reflects the operational efficiency of the business before interest and taxes.
Paylocity Holding Corporation (PCTY) generated $1.10B in gross profit for the year, representing a gross profit margin of 68.8%. This demonstrates the company's core pricing power and production efficiency.