Paylocity (PCTY) BMO 2025 Virtual Software Conference summary

Business performance and growth strategy

• Achieved mid-teens revenue growth for the year, outperforming initial guidance with strong execution and stable demand environment.

• Growth strategy centers on new client acquisition, expanding product offerings, and driving revenue per user (RPU) through both new sales and upselling to existing clients.

• Maintains flexibility in targeting both lower and upper ends of the mid-market, with average client size stable around 150 employees.

• Broker channel remains a key pipeline source, contributing over 25% of new business, supported by strong technology integration and non-competitive positioning.

• Consistent leadership and operational approach have enabled scalable growth from $300M to $1.6B in revenue over eight years.

Product innovation and adoption

• Rapid product development over the past 18 months, including new tools like Recognition & Rewards, Employee Voice, Scheduling Plus, and Headcount Planning.

• Targets 10–20% adoption for new products over several years, with early ramping seen in recent launches.

• Airbase acquisition expands finance and spend management capabilities; full integration into the platform is expected by the first half of fiscal 2026.

• Sales approach for new products mirrors previous launches, balancing field and inside sales expertise.

Financial outlook and margin profile

• Fiscal 2026 planning assumes a stable demand environment and flattish workforce levels, with continued investment in sales headcount and productivity.

• Already within midterm margin targets for EBITDA and free cash flow, with room to reach the top end; no ceiling implied by current targets.

• Fiscal 2025 delivered about 200 basis points of adjusted EBITDA leverage; Fiscal 2026 may see moderated margin expansion due to planned investments.