Paylocity Holding Corporation reported first‑quarter fiscal 2026 results that surpassed consensus expectations, with total revenue reaching $408.2 million—an increase of 12% year‑over‑year—and earnings per share of $1.56, beating the $1.38 consensus by $0.18 (13%). The company’s recurring and other revenue grew 14% to $378.9 million, underscoring the strength of its core subscription business.
Revenue growth was driven primarily by a 15% rise in subscription fees from existing customers and a 10% increase in new customer acquisitions. The company’s AI‑enabled platform, Paylocity for Finance, contributed an additional 8% lift in revenue, reflecting early adoption by mid‑market firms seeking integrated finance and HR solutions.
Profitability improved markedly, with adjusted EBITDA reaching $146.4 million and a margin of 35.9%, up from 34.5% in the same quarter last year. The margin expansion was largely attributable to higher mix of high‑margin AI and finance contracts and disciplined cost management, offsetting modest increases in support and professional services costs.
Management guided for Q2 fiscal 2026 revenue of $420–$425 million and a full‑year revenue outlook of $4.3–$4.4 billion, while maintaining its long‑term revenue target of $3 billion. The guidance reflects confidence in continued demand for the unified platform and the scalability of its AI capabilities.
"Fiscal '26 is off to a strong start," said President and CEO Toby Williams. "Recurring and other revenue grew 14% in the first quarter, and our AI strategy is delivering predictive insights and generative capabilities that are driving productivity gains for our customers."
The results reinforce Paylocity’s strategy to expand beyond traditional HCM into finance and IT solutions, positioning the company to capture a larger share of the mid‑market software spend. While the company faces competitive pressure in the HR space, its focus on AI and platform integration is expected to sustain growth momentum and support the raised long‑term targets.
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