On this page of StockholderLetter.com we present the latest annual shareholder letter from Paylocity Holding Corp — ticker symbol PCTY. Reading current and past PCTY letters to shareholders can bring important insights into the investment thesis.
Fiscal year 2025 Annual Report
Message from Our President and Chief Executive Officer In fiscal 2025, Paylocity delivered significant growth at scale. Our recurring and other revenue was $1.5B, a 15% year-over-year increase, and our total revenue was $1.6B, a 14% year-over-year increase, as our focus on providing the most complete platform for the modern workforce continued to differentiate us from competitors and resonate with clients and prospects. We also increased profitability in fiscal 2025, with adjusted EBITDA of $583.0M or 36.5% margin, adjusted EBITDA excluding interest income on funds held for clients of $459.6M or 31.2% margin, free cash flow of $342.8M or 21.5% margin, and free cash flow excluding interest income on funds held for clients of $219.3M or 14.9% margin.* Our focus on innovation and operational excellence with a client-centered approach has positioned us for sustained success in a rapidly changing world of work. This year we delivered continued innovation and expanded our HCM suite, while also broadening our platform with spend management capabilities to better serve HR and finance leaders increasing Paylocity s total addressable market beyond HCM and further into the Office of the CFO. Fiscal 2025 also marked key product milestones that are pivotal to driving our strategy as the most modern platform provider in the industry. We introduced the Paylocity AI Assistant to simplify HR tasks with real-time conversational support; launched enhancements to our Recruiting platform to streamline hiring and improve candidate quality; and unveiled Benefits Decision Support to guide employees through personalized benefits enrollment. And in spend management, Paylocity for Finance (formerly known as Airbase by Paylocity) was recognized as a Visionary in the 2025 Gartner Magic Quadrant for Accounts Payable Applications, validating the strength of our finance solutions. We also continue to invest in our go-to-market initiatives, expanding our sales force, strengthening referral channels, and further growing our brand presence. These efforts contributed to a 7% increase in our client base, ending fiscal 2025 with 41,650 clients. We also maintained revenue retention of greater than 92%, which is a testament to the strength of our client service and the strategic value we deliver. Looking ahead, we see significant opportunities to extend our market leadership. Companies increasingly demand unified business platforms that can adapt to the shifting needs of the modern workforce while helping to drive business results. With ongoing investments in our market-leading product innovation and world-class client service, Paylocity is well positioned to deliver lasting value to our clients, growth in our business, and opportunity for our employees. Thank you to our employees, clients, and partners for your trust and collaboration. We remain committed to moving forward together shaping the future of work with vision and purpose. Toby Williams President and Chief Executive Officer *Refer to Financial Highlights and Appendix A for additional details on non-GAAP financial measures.
Fiscal Year 2025 Highlights $1.6B 14% Total revenue Adjusted EBITDA $583.0M Free cash flow $342.8M YoY growth Adjusted EBITDA margin 36.5% Adjusted EBITDA excluding interest income on funds held for clients Adjusted EBITDA $459.6M Free cash flow margin 21.5% Free cash flow excluding interest income on funds held for clients $219.3M excluding interest income on funds held for clients margin 31.2% Free cash flow excluding interest income on funds held for clients margin 14.9% Paylocity recognized by Gartner Peer Insights Voice of the Customer for Cloud HCM Suites for 1,000+ Employee Enterprises 41,650 Clients 6.5M+ 92%+ Employees on platform Revenue retention 6,700 Employees Headquarters Schaumburg, IL Founded in 1997
Innovation A Modern Platform that Evolves with Your Business We deliver first-to-market innovations that solve complex challenges and drive business outcomes for our more than 41,650 clients. Building on our award-winning HCM suite, we re unifying work across HR and finance so organizations can stop piecing things together and start moving forward faster. With a focus on the future, our solutions push the boundaries of traditional HR and finance technology to streamline processes, boost efficiency, simplify spend management, and deliver seamless, intuitive experiences to make leaders, administrators, and employees more productive. Single Platform with Flexible Data The foundation of our platform is a single employee system of record, with end-to-end HR and finance capabilities that ensure efficiency and compliance across the employee lifecycle. We also make it easy to connect Paylocity with other business systems through hundreds of integrations with benefits, 401(k), and other providers with open APIs. This comprehensive platform serves as a single pane of glass, empowering HR and finance leaders to consolidate data and gain a holistic view of their business. Insights, Recommendations, and AI Standard reporting for compliance meets the needs of some companies, but we take it a step further. AI is woven intentionally throughout our platform to deliver value every day with intelligent automation, tailored insights, and embedded experiences that provide real-time guidance to administrators and employees. Employee Experience When employees feel engaged, they re more likely to stay and to do their best work. Paylocity offers tools like native video, collaboration, recognition and rewards, chat, and automated surveys that enable employers to engage with and retain their top talent. Unmatched Client Service We build deep, long-lasting partnerships with clients. From initial implementation to ongoing service, we have a track record of going beyond the transactional to move clients toward their strategic goals. We consider clients our co-creators, regularly soliciting and prioritizing their feedback in our product and service roadmaps.
Product The Most Complete Platform for the Modern Workforce Payroll Time & Labor SaaS-based Payroll Time & Attendance Global Payroll Scheduling Tax Filing, Direct Deposit Time Collection On Demand Payment Employee Experience Community Video Recognition & Rewards Employee Voice Human Resources Employee Self-Service Compliance & Record Keeping Workflows & Documents Talent Recruiting Onboarding Performance Compensation Learning Benefits Benefit Enrollment & Updates Advanced Reporting TPA Solutions Finance Headcount Planning Expense Management Bill Pay | AP Automation Corporate Cards Procurement
 • shareholder letter icon 10/23/2025 Letter Continued (Full PDF)
 • stockholder letter icon 10/20/2023 PCTY Stockholder Letter
 • stockholder letter icon 10/24/2024 PCTY Stockholder Letter
 • stockholder letter icon More "Application Software" Category Stockholder Letters
 • Benford's Law Stocks icon PCTY Benford's Law Stock Score = 87


PCTY Shareholder/Stockholder Letter Transcript:

Fiscal year
2025
Annual
Report

Message from Our President
and Chief Executive Officer
In fiscal 2025, Paylocity delivered significant growth at scale. Our recurring and other revenue
was $1.5B, a 15% year-over-year increase, and our total revenue was $1.6B, a 14% year-over-year
increase, as our focus on providing the most complete platform for the modern workforce continued
to differentiate us from competitors and resonate with clients and prospects. We also increased
profitability in fiscal 2025, with adjusted EBITDA of $583.0M or 36.5% margin, adjusted EBITDA
excluding interest income on funds held for clients of $459.6M or 31.2% margin, free cash flow of
$342.8M or 21.5% margin, and free cash flow excluding interest income on funds held for clients of
$219.3M or 14.9% margin.*
Our focus on innovation and operational excellence with a client-centered approach has
positioned us for sustained success in a rapidly changing world of work. This year we delivered
continued innovation and expanded our HCM suite, while also broadening our platform with spend
management capabilities to better serve HR and finance leaders     increasing Paylocity   s total
addressable market beyond HCM and further into the Office of the CFO.
Fiscal 2025 also marked key product milestones that are pivotal to driving our strategy as the most
modern platform provider in the industry. We introduced the Paylocity AI Assistant to simplify HR
tasks with real-time conversational support; launched enhancements to our Recruiting platform
to streamline hiring and improve candidate quality; and unveiled Benefits Decision Support to
guide employees through personalized benefits enrollment. And in spend management, Paylocity
for Finance (formerly known as Airbase by Paylocity) was recognized as a Visionary in the 2025
Gartner   Magic Quadrant    for Accounts Payable Applications, validating the strength of our
finance solutions.
We also continue to invest in our go-to-market initiatives, expanding our sales force, strengthening
referral channels, and further growing our brand presence. These efforts contributed to a 7% increase
in our client base, ending fiscal 2025 with 41,650 clients. We also maintained revenue retention of
greater than 92%, which is a testament to the strength of our client service and the strategic value
we deliver.
Looking ahead, we see significant opportunities to extend our market leadership. Companies
increasingly demand unified business platforms that can adapt to the shifting needs of the modern
workforce while helping to drive business results. With ongoing investments in our market-leading
product innovation and world-class client service, Paylocity is well positioned to deliver lasting value
to our clients, growth in our business, and opportunity for our employees.
Thank you to our employees, clients, and partners for your trust and collaboration. We remain
committed to moving forward together     shaping the future of work with vision and purpose.
Toby Williams
President and Chief Executive Officer
*Refer to Financial Highlights and Appendix A for additional details on non-GAAP financial measures.

Fiscal Year 2025 Highlights
$1.6B
14%
Total revenue
Adjusted EBITDA
$583.0M
Free cash flow
$342.8M
YoY growth
Adjusted EBITDA margin
36.5%
Adjusted EBITDA
excluding interest income
on funds held for clients
Adjusted EBITDA
$459.6M
Free cash flow margin
21.5%
Free cash flow
excluding interest income
on funds held for clients
$219.3M
excluding interest income on
funds held for clients margin
31.2%
Free cash flow
excluding interest income on
funds held for clients margin
14.9%
Paylocity recognized by Gartner Peer Insights Voice of the Customer for Cloud
HCM Suites for 1,000+ Employee Enterprises
41,650
Clients
6.5M+
92%+
Employees
on platform
Revenue
retention
6,700
Employees
Headquarters
Schaumburg, IL
Founded in
1997

Innovation
A Modern Platform that
Evolves with Your Business
We deliver first-to-market innovations that solve complex challenges and drive business outcomes for
our more than 41,650 clients. Building on our award-winning HCM suite, we   re unifying work across
HR and finance so organizations can stop piecing things together and start moving forward faster.
With a focus on the future, our solutions push the boundaries of traditional HR and finance technology
to streamline processes, boost efficiency, simplify spend management, and deliver seamless, intuitive
experiences to make leaders, administrators, and employees more productive.
Single Platform with Flexible Data
The foundation of our platform is a single employee system of record, with end-to-end HR and finance
capabilities that ensure efficiency and compliance across the employee lifecycle. We also make it easy
to connect Paylocity with other business systems through hundreds of integrations with benefits, 401(k),
and other providers with open APIs. This comprehensive platform serves as a single pane of glass,
empowering HR and finance leaders to consolidate data and gain a holistic view of their business.
Insights, Recommendations, and AI
Standard reporting for compliance meets
the needs of some companies, but we take
it a step further. AI is woven intentionally
throughout our platform to deliver value
every day with intelligent automation,
tailored insights, and embedded
experiences that provide real-time
guidance to administrators and employees.
Employee Experience
When employees feel engaged, they   re
more likely to stay     and to do their best
work. Paylocity offers tools like native video,
collaboration, recognition and rewards,
chat, and automated surveys that enable
employers to engage with and retain their
top talent.
Unmatched Client Service
We build deep, long-lasting partnerships
with clients. From initial implementation to
ongoing service, we have a track record of
going beyond the transactional to move
clients toward their strategic goals. We
consider clients our    co-creators,    regularly
soliciting and prioritizing their feedback in
our product and service roadmaps.

Product
The Most Complete Platform for the
Modern Workforce
Payroll
Time & Labor
    SaaS-based Payroll
    Time & Attendance
    Global Payroll
    Scheduling
    Tax Filing, Direct Deposit
    Time Collection
    On Demand Payment
Employee Experience
    Community
    Video
    Recognition & Rewards
    Employee Voice
Human Resources
    Employee Self-Service
    Compliance & Record Keeping
    Workflows & Documents
Talent
    Recruiting
    Onboarding
    Performance
    Compensation
    Learning
Benefits
    Benefit Enrollment &
Updates
    Advanced Reporting
    TPA Solutions
Finance
    Headcount Planning
    Expense Management
    Bill Pay | AP Automation
    Corporate Cards
    Procurement



shareholder letter icon 10/23/2025 Letter Continued (Full PDF)
 

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