Paylocity Q3 Earnings Beat Estimates, Revenues Increase Y/Y

Paylocity PCTY reported third-quarter fiscal 2026 non-GAAP net income of $2.89 per share, beating the Zacks Consensus Estimate by 18.93%. Paylocity's revenues rose 10.5% year over year to $502.3 million and surpassed the Zacks Consensus Estimate by 2.65%.Top-line growth can be attributed to an 11.6% increase in recurring and other revenues (94% of the total revenues) to $469.9 million. Interest income on funds held for clients (6% of total revenues) declined 3.3% year over year to $32.4 million.Paylocity Holding Corporation Price, Consensus and EPS Surprise Paylocity Holding Corporation price-consensus-eps-surprise-chart | Paylocity Holding Corporation QuoteQuarterly Details of PCTYPaylocity's adjusted gross profit was $388.5 million, up 11.0% from the year-ago period. The adjusted gross margin expanded 30 basis points (bps) to 77.3%. The non-GAAP operating income rose 13.9% year over year to $196.8 million. The non-GAAP operating margin expanded 120 bps to 39.2%.Adjusted EBITDA rose 11.8% from the year-ago quarter to $220.2 million. The adjusted EBITDA margin for the third quarter of fiscal 2026 is up 50 bps to 43.8%.Balance Sheet & Cash Flow DetailsAs of March 31, 2026, Paylocity's cash and cash equivalents were $299.7 million compared with $162.5 million as of Dec. 31, 2025.Long-term debt totaled $81.3 million as of the third quarter of fiscal 2026, representing borrowings under the credit facility to fund the acquisition of Airbase Inc. on Oct. 1, 2024. This reflects approximately $81.3 million repaid on the outstanding balance during the first nine months of fiscal 2026.Net cash provided by operations for the first nine months of fiscal 2026 was $421.4 million compared to $331.7 million for the first nine months of fiscal 2025.Paylocity repurchased $50 million or 440,000 shares during the fiscal third quarter and $350 million or 2.3 million shares in the first nine months of fiscal 2026. In April 2026, the board of directors approved a $1.0 billion increase to the share repurchase authorization, with $1.35 billion available under the authorization as of May 7, 2026.Acquisitions & Product DevelopmentsIn April 2026, Paylocity completed the acquisition of Grayscale Labs, Inc., an AI-powered recruiting automation company, expanding the existing recruiting capabilities and helping companies hiring at scale move faster without compromising quality.The company also launched Paylocity Elevate Solutions in April 2026, a new offering that combines the unified platform with dedicated payroll and HR experts to handle implementation, payroll administration and ongoing HR operations on behalf of clients. The suite includes Elevate Implementation, Elevate Payroll and Elevate HR.PCTY Updates Q4 & Fiscal 2026 GuidanceFor the fourth quarter of fiscal 2026, the company expects total revenues to be in the range of $428.4-$433.4 million, indicating 7-8% growth from the year-ago period's actual. Recurring and other revenues are projected to be between $402.2 million and $407.2 million, implying 9-10% growth over the year-ago quarter.Adjusted EBITDA is projected to be in the range of $128.6-$132.6 million. Adjusted EBITDA excluding interest income on funds held for clients is expected in the range of $102.4-$106.4 million.For fiscal 2026, Paylocity projects total revenues between $1.755 billion and $1.76 billion, implying approximately 10% growth from the year-ago period's actual. Recurring and other revenues are expected in the range of $1.638 billion to $1.643 billion, suggesting 11-12% growth.Adjusted EBITDA is expected to be between $638 million and $642 million. Adjusted EBITDA excluding interest income on funds held for clients is projected to be between $521 million and $525 million.Zacks Rank & Other Stocks to ConsiderPCTY currently carries a Zacks Rank #2 (Buy).Keysight Technologies KEYS, Cisco Systems CSCO and Dell Technologies DELL are some other top-ranked stocks that investors can consider in the broader Zacks Computer & Technology sector. Keysight Technologies sports a Zacks Rank #1 (Strong Buy), whereas Cisco Systems and Dell Technologies presently carry a Zacks Rank #2 each. You can see the complete list of today’s Zacks #1 Rank stocks here.Shares of Keysight Technologies have rallied 78% in the year-to-date period. KEYS is set to report its second-quarter fiscal 2026 results on May 19.Cisco Systems shares have jumped 19.6% in the year-to-date period. CSCO is scheduled to release third-quarter fiscal 2026 results on May 13.DELL Technologies shares have surged 82.9% in the year-to-date period. DELL is set to report its first-quarter fiscal 2027 results on May 28.Beyond Nvidia: AI's Second Wave Is HereThe AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.See Stocks Now >>This article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks