Quick Facts / Company Snapshot
| Metric | Value |
| Company Name | Paylocity Holding Corporation |
| Ticker Symbol | NASDAQ: PCTY |
| Year Founded | 1997 |
| Headquarters | Schaumburg, Illinois, United States |
| President & CEO | Toby J. Williams |
| Total Clients | 41,650 |
| Total Employees on Platform | 6.5M+ |
| Company Employees | 6,700 |
| FY25 Total Revenue | $1,595.2 million |
| FY25 Net Income | $227.1 million |
| FY25 Adjusted EBITDA | $583.0 million |
| Recurring & Other Revenue % | 92.26% |
| Annual Revenue Retention Rate | >92% |
| Free Cash Flow | $342.8 million |
| Cash & Cash Equivalents | $398.1 million |
| Funds Held for Clients | $2,704.1 million |
| Core Business | Cloud-based HCM, Payroll, & Spend Management |
| Independent Audit Firm | KPMG LLP |
| Total Assets | $4,389.4 million |
| Total Liabilities | $3,155.7 million |
Company Overview
Paylocity Holding Corporation is a leading cloud-based provider of human capital management (HCM), payroll, and spend management software solutions formulated for the modern workforce. Operating on a Software-as-a-Service (SaaS) delivery model, the company unifies human resources and finance workflows into a single, comprehensive ecosystem. The organization serves approximately 41,650 clients across the United States, supporting more than 6.5 million employees on its platform while maintaining an impressive revenue retention rate greater than 92%.
The platform is designed to eliminate the fragmentation traditionally found in corporate administrative software by offering an intuitive, mobile-focused suite. The technology features an integration marketplace with open APIs that connect seamlessly with hundreds of third-party systems, including 401(k), benefits, and insurance providers. Through continuous technological advancement, including the integration of artificial intelligence (AI) and machine learning, Paylocity has evolved from a traditional payroll processor into a holistic provider capable of supporting the “Office of the CFO”.
Business Segments
Paylocity operates as a single reporting segment, as its chief operating decision maker reviews financial results in totality to guide resource allocation and assess performance. However, the company derives its revenues through distinct operational streams, which are categorized below.
Recurring and Other Revenue
- Scope and Operations: This stream includes ongoing subscriptions to the cloud-based software solutions. Clients pay a base fee alongside a per-employee-per-month fee. It also incorporates implementation fees, preparation of W-2 documents, and other professional services.
- FY25 Revenue: $1,471.8 million
- % of Total Revenue: 92.26%
Interest Income on Funds Held for Clients
- Scope and Operations: The company collects funds from clients prior to performing payroll, tax filing, and spend management obligations. Until these funds are remitted, Paylocity earns interest by maintaining them in demand deposit accounts and investing a portion in highly liquid, investment-grade marketable securities.
- FY25 Revenue: $123.4 million
- % of Total Revenue: 7.74%
History and Evolution
Paylocity was founded in 1997 with a vision to modernize payroll processing. Over the decades, the organization successfully transitioned into a publicly traded entity on the NASDAQ Global Select Market under the ticker PCTY. A significant phase of evolution occurred as the company expanded its software capabilities beyond basic payroll into a full-suite Human Capital Management platform.
In recent years, the company has executed strategic acquisitions to deepen its functional footprint. On November 30, 2023, the organization acquired TraceHQ.com, Inc. for $12.1 million to enhance headcount planning capabilities. This was followed by the transformative acquisition of Airbase Inc. on October 1, 2024, for a cash consideration of $320.2 million. The Airbase acquisition expanded Paylocity’s market addressability directly into the Office of the CFO by introducing robust spend management, corporate cards, and procurement tools to the platform.
Products and Services
Paylocity delivers a unified architecture driven by a single employee record. The solutions are modular, allowing clients to configure the platform to their specific organizational needs.
Payroll
- Revenue Contribution: Consolidated within the $1,471.8 million Recurring Revenue stream (92.26% of Total).
- Profile: The foundational software calculates wages, deductions, and withholdings automatically. It supports Global Payroll across more than 100 countries to manage international compliance. Additionally, it includes On Demand Payment, affording employees early access to earned wages, and precise Garnishments management.
Human Resources
- Revenue Contribution: Consolidated within Recurring Revenue.
- Profile: Automates administrative HR tasks. Includes an Employee Self-Service portal, automated Workflows & Documents for paperless file management, and an HR Compliance Dashboard to track employment verification and Equal Employment Opportunity regulations.
Time & Labor
- Revenue Contribution: Consolidated within Recurring Revenue.
- Profile: Tracks time and attendance while eliminating manual accrual monitoring. The Scheduling module uses AI-driven shift recommendations and allows for shift swapping. Time Collection utilizes varied devices from biometric kiosks to smartwatches with geofencing capabilities.
Talent
- Revenue Contribution: Consolidated within Recurring Revenue.
- Profile: Covers the entire talent lifecycle. Recruiting allows automated job board posting and candidate masking to reduce hiring bias. Onboarding ensures digital I-9 verification. It also provides Market Pay benchmarks, Learning Management Systems (LMS) with SCORM compliance, Performance journals, and Total Rewards Compensation statements.
Employee Experiences
- Revenue Contribution: Consolidated within Recurring Revenue.
- Profile: Focuses on retention and culture. Features include Community (a corporate social feed), native Video tools for leadership announcements, Employee Voice for automated sentiment surveys, and Recognition & Rewards facilitating digital gift cards. It integrates the patent-pending Modern Workforce Index (MWI) to measure organizational health.
Finance & Spend Management (Paylocity for Finance)
- Revenue Contribution: Consolidated within Recurring Revenue.
- Profile: Enhanced significantly by the Airbase acquisition, this suite provides Headcount Planning, Expense Management with real-time policy enforcement, Accounts Payable (AP) Automation, virtual and physical Corporate Cards, and Guided Procurement workflows.
Benefits
- Revenue Contribution: Consolidated within Recurring Revenue.
- Profile: Offers guided enrollment via AI-powered Benefit Decision Support. Also provides Third-Party Administrative (TPA) solutions for HSA, FSA, HRA, and COBRA coverage administration.
Brand Portfolio
Paylocity primarily operates under its master corporate brand, ensuring a cohesive user experience across its single platform.
Paylocity
- Revenue Contribution: $1,595.2 million (100% of Total Revenue)
- Profile: The primary brand covering the vast majority of the company’s software and service offerings, representing cloud-based HCM and payroll excellence.
Paylocity for Finance (formerly Airbase by Paylocity)
- Revenue Contribution: Consolidated within Total Revenue.
- Profile: The designated brand identity for the company’s spend management solutions, aimed at CFOs and finance leaders.
BeneFLEX
- Revenue Contribution: Consolidated within Total Revenue.
- Profile: Associated with the company’s benefit administration solutions, subject to HIPAA compliance, managing health and retirement enrollments.
Geographical Presence
Paylocity’s physical footprint and primary revenue generation are highly concentrated in the domestic United States, although its software supports international workforces.
United States
- Revenue Contribution: Substantially all of the $1,595.2 million Total Revenue.
- % of Total Revenue: ~100%
- Profile: The U.S. serves as the primary operational hub, housing the corporate headquarters, multiple operations centers, and data centers. The direct sales force is organized into defined geographic territories throughout the country. The client base spans multiple domestic industries including business services, financial services, healthcare, and retail.
International
- Revenue Contribution: Immaterial/Not independently disclosed.
- Profile: While physical operations are primarily domestic, Paylocity’s Global Payroll solution enables U.S.-based multinational clients to process payroll across more than 100 countries. The company engages international business partners to facilitate compliance in these jurisdictions.
Profit and Loss
The following table details the Consolidated Statements of Operations for the fiscal year ended June 30, 2025, alongside the previous year.
| Income Statement Metric (in thousands) | FY 2024 | FY 2025 |
| Recurring and other revenue | $1,281,680 | $1,471,801 |
| Interest income on funds held for clients | $120,835 | $123,420 |
| Total revenues | $1,402,515 | $1,595,221 |
| Cost of revenues | $441,729 | $498,223 |
| Gross profit | $960,786 | $1,096,998 |
| Sales and marketing expenses | $334,954 | $374,216 |
| Research and development expenses | $178,333 | $205,851 |
| General and administrative expenses | $187,406 | $212,907 |
| Total operating expenses | $700,693 | $792,974 |
| Operating income | $260,093 | $304,024 |
| Other income | $16,922 | $5,039 |
| Income before income taxes | $277,015 | $309,063 |
| Income tax expense | $70,249 | $81,936 |
| Net income | $206,766 | $227,127 |
Key Margins & Metrics (FY25):
- Gross Margin: 69%
- Operating Margin: 19%
- Adjusted EBITDA: $583.0 million
- Adjusted EBITDA Margin: 36.5%
Balance Sheet
The corporate financial position remains highly liquid with robust asset capitalization.
| Balance Sheet Metric (in thousands) | As of June 30, 2024 | As of June 30, 2025 |
| Cash and cash equivalents | $401,811 | $398,070 |
| Accounts receivable, net | $32,997 | $41,642 |
| Deferred contract costs (Current) | $97,859 | $117,177 |
| Prepaid expenses and other | $39,765 | $50,943 |
| Funds held for clients | $2,952,060 | $2,704,137 |
| Total current assets | $3,524,492 | $3,311,969 |
| Capitalized internal-use software, net | $116,412 | $132,317 |
| Property and equipment, net | $60,640 | $54,210 |
| Intangible assets, net | $28,291 | $92,671 |
| Goodwill | $108,937 | $343,100 |
| Total assets | $4,245,460 | $4,389,428 |
| Accounts payable | $8,638 | $17,347 |
| Accrued expenses | $158,311 | $193,081 |
| Client fund obligations | $2,950,411 | $2,694,842 |
| Total current liabilities | $3,117,360 | $2,905,270 |
| Long-term debt | $0 | $162,500 |
| Total liabilities | $3,212,396 | $3,155,681 |
| Retained earnings | $673,456 | $900,583 |
| Total stockholders’ equity | $1,033,064 | $1,233,747 |
Cash Flow
Operating cash flow demonstrated substantial strength, supporting organic reinvestment and strategic M&A execution.
| Cash Flow Metric (in thousands) | FY 2024 | FY 2025 |
| Net cash provided by operating activities | $384,670 | $418,226 |
| Purchases of available-for-sale securities | $(304,465) | $(260,997) |
| Capitalized internal-use software costs | $(60,726) | $(62,402) |
| Purchases of property and equipment | $(18,028) | $(13,073) |
| Acquisitions of businesses, net | $(12,031) | $(277,851) |
| Net cash used in investing activities | $(101,891) | $(455,548) |
| Net change in client fund obligations | $325,056 | $(297,923) |
| Borrowings under credit facility | $0 | $325,000 |
| Repayment of credit facility | $0 | $(162,500) |
| Repurchases of common shares | $(150,000) | $(149,638) |
| Net cash provided by (used in) financing activities | $141,578 | $(325,821) |
Board of Directors and Leadership Team
The company is guided by a seasoned executive team and board of directors with deep expertise in technology, finance, and software scaling.
- Toby J. Williams: President, Chief Executive Officer, and Director. He guides the overall strategic vision, pushing the platform into comprehensive spend management and driving operational scale.
- Steven R. Beauchamp: Executive Chairman of the Board and Director.
- Ryan Glenn: Chief Financial Officer and Principal Financial Officer. He oversees the financial health, capital allocation, and risk management of the organization.
- Nicholas Rost: Vice President, Chief Accounting Officer, and Treasurer.
- Melissa King: Senior Vice President, Product and Technology. She joined effective December 16, 2024, to spearhead technological advancement and product suite integration.
- Linda M. Breard: Director.
- Virginia G. Breen: Director.
- Craig Conway: Director.
- Robin L. Pederson: Director.
- Andres D. Reiner: Director.
- Kenneth B. Robinson: Director.
- Steven I. Sarowitz: Founder and Director.
- Ronald V. Waters, III: Director.
Subsidiaries, Associates, Joint Ventures
Paylocity operates its global business through a network of wholly owned subsidiaries across North America, Europe, and Asia. The financial contribution of these entities is consolidated into the total revenues of $1,595.2 million (100% ownership).
- Paylocity Corporation: An Illinois corporation acting as the primary operating entity.
- Airbase Inc.: A Delaware corporation acquired in October 2024 to lead the spend management offerings.
- Benefit Administration Technologies, Inc.: A Delaware corporation.
- VidGrid Inc.: A Delaware corporation providing the foundation for native video communication tools.
- Samepage Labs Inc.: A Delaware corporation.
- Cloudsnap, Inc.: A Delaware corporation.
- TraceHQ.com, Inc.: A Delaware corporation focusing on headcount planning.
- Blue Marble Payroll, LLC: An Illinois limited liability company focused on international payroll.
- Paylocity Canada ULC: A Canada unlimited liability company.
- Paylocity s.r.o.: A Czech Republic company supporting international operations.
- Airbase Services, LLC & Airbase Card Services, LLC: Delaware limited liability companies.
- Airbase Labs India Private Limited: An India company.
Other Investments (Including Minority / Portfolio Holdings)
Paylocity strategically invests excess corporate cash and funds held for clients in a portfolio of highly liquid, investment-grade marketable securities. These available-for-sale securities are actively managed to mitigate credit and liquidity risk.
- Corporate Bonds: * Ownership: Passive / Financial
- Fair Value (FY25): $378.59 million
- % of Total Available-for-Sale Securities: 61.1%
- U.S. Treasury Securities: * Ownership: Passive / Financial
- Fair Value (FY25): $85.26 million
- % of Total Available-for-Sale Securities: 13.8%
- Certificates of Deposit: * Ownership: Passive / Financial
- Fair Value (FY25): $61.68 million
- % of Total Available-for-Sale Securities: 10.0%
- Asset-Backed Securities: * Ownership: Passive / Financial
- Fair Value (FY25): $52.17 million
- % of Total Available-for-Sale Securities: 8.4%
- Commercial Paper: * Ownership: Passive / Financial
- Fair Value (FY25): $17.27 million
- % of Total Available-for-Sale Securities: 2.8%
- Other Securities: * Ownership: Passive / Financial
- Fair Value (FY25): $24.68 million
- % of Total Available-for-Sale Securities: 3.9%
Physical Properties
The company leverages a modern, geographically diverse real estate footprint to support its 6,700 employees, alongside enterprise-class data centers.
- Corporate Headquarters (Schaumburg, IL): The primary facility occupies approximately 272,000 square feet under leases expiring in October 2032.
- Lake Mary, FL: A major operations center spanning approximately 70,000 square feet.
- Meridian, ID: An operations center covering approximately 64,000 square feet.
- Pittsford, NY: A regional office utilizing approximately 20,000 square feet.
- Data Centers: Facilities located in Franklin Park, Illinois, and Kenosha, Wisconsin (serving as the backup and disaster recovery center).
Founders
Paylocity was founded in 1997 by Steven I. Sarowitz. He established the company with the mission to automate and streamline the convoluted payroll processes burdening mid-market organizations. He currently remains actively involved in the company’s governance as a Director.
Investments and Capital Expenditure Plans
The company applies an aggressive capital allocation strategy focused on research and development (R&D), strategic acquisitions, and infrastructure scaling to outpace competitors.
- Research & Development (R&D): Total R&D spending reached $281.7 million in FY25 (17.6% of total revenue). Of this, $205.8 million was expensed directly, and $75.8 million was capitalized as internal-use software costs. The company operates small product-centric teams utilizing agile development to continuously introduce AI, machine learning, and new modules.
- Capital Expenditures (CapEx): Physical property and equipment purchases totaled $13.1 million in FY25, alongside the $62.4 million in net capitalized internal-use software costs.
- Strategic M&A Allocation: In October 2024, the company heavily invested $320.2 million in cash to acquire Airbase Inc., drawing $325.0 million from its revolving credit facility to finance the transaction.
Shareholding Pattern
The company’s capitalization reflects robust public and institutional participation.
- Authorized Shares: 155,000,000 shares of common stock.
- Outstanding Shares: 55,161,627 shares as of July 30, 2025.
- Share Repurchase Program: In May 2024, the Board approved a $500 million share repurchase program. During FY25, the company repurchased 0.8 million shares for approximately $149.6 million. Reflecting confidence in capital liquidity, the Board authorized an additional $500 million to the program in August 2025.
Future Strategy
Paylocity is executing a multi-pronged expansion strategy.
- Market Penetration: The company targets the 1.3 million U.S. businesses with 10 to 5,000 employees, representing a realized addressable market of approximately $22.0 billion.
- Product Expansion into the CFO Office: The integration of the newly acquired Airbase platform (now “Paylocity for Finance”) transforms the company from an HR vendor to a holistic corporate management platform.
- Referral Network Development: Over 25% of new client revenue in FY25 originated from a network of 401(k) advisors, brokers, and consultants. The strategy is to deepen these integrations to lower client acquisition costs.
Key Strengths
- Exceptional Client Retention: Consistently maintains a revenue retention rate exceeding 92% across a base of 41,650 clients.
- Unified Architecture: Unlike patchwork legacy systems, the platform utilizes a single employee system of record, eliminating data silos.
- Robust Margin Profile: Achieved a 69% Gross Profit Margin and generated $342.8 million in Free Cash Flow in FY25.
Key Challenges and Risks
- Cybersecurity Vulnerabilities: Processing sensitive bank, health, and social security data makes the platform a prime target for ransomware, supply-chain attacks, and cyber extortion.
- Intense Market Competition: Competes against deeply resourced incumbents like Automatic Data Processing, Inc., Paychex, Inc., and Workday, which possess aggressive pricing power and longer operating histories.
- Interest Rate Sensitivity: The company holds $2.7 billion in client funds. A falling rate environment directly compresses the yields earned on these balances, threatening a highly profitable revenue stream.
- Regulatory Complexity: Operates across 100+ countries and all U.S. states, necessitating flawless adaptation to shifting wage, tax, and privacy laws (e.g., GDPR, CCPA, BIPA).
Conclusion and Strategic Outlook
Paylocity Holding Corporation (PCTY) has solidified its position as a disruptive force in the human capital management space. By leveraging an intuitive, AI-enhanced platform, the company seamlessly marries HR functions with high-demand spend management workflows. Generating nearly $1.6 billion in revenue with expanding profitability margins, the firm’s strategic acquisition of Airbase signals an aggressive expansion beyond the CHRO directly into the Office of the CFO. With strong liquidity, an active $1 billion combined repurchase program, and a 92%+ retention rate, Paylocity remains poised for sustained, scalable growth in a highly fragmented market.
FAQ
What does Paylocity actually do? Paylocity provides a unified, cloud-based software platform that handles human resources, global payroll, talent management, and corporate spend management (like accounts payable and corporate cards) for modern businesses.
How many clients use Paylocity’s software? As of fiscal year 2025, the company provides its solutions to approximately 41,650 clients.
How much revenue did Paylocity generate in 2025? Paylocity generated $1.595 billion in total revenue for the fiscal year ended June 30, 2025, up 14% from the prior year.
What was the strategic purpose of the Airbase acquisition? The $320.2 million acquisition of Airbase Inc. allowed Paylocity to expand its total addressable market by adding “Paylocity for Finance”—a suite of tools for expense management, AP automation, and procurement.
Is Paylocity a profitable company? Yes, in fiscal year 2025, the company posted a net income of $227.1 million and an Adjusted EBITDA of $583.0 million.
Who founded Paylocity? The company was founded in 1997 by Steven I. Sarowitz, who continues to serve on the Board of Directors.
Where is Paylocity headquartered? The corporate headquarters are located in a 272,000 square foot facility in Schaumburg, Illinois.
What is Paylocity’s client retention rate? The company consistently maintains an annual revenue retention rate greater than 92%.
Official Site: https://www.paylocity.com
Source: Content on FirmsWorld.com is based on publicly available corporate filings, regulatory disclosures, annual reports, SEC 10-K filings, investor relations materials, and, where applicable, direct communications with the company.
