Paylocity Holding Corp (PCTY.O): 4Q26 Recap: Solid Execution with Likely Conservative Guidance

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05 Aug 2026 07:13:19 ET │ 16 pages

Paylocity Holding Corp (PCTY.O)

4Q26 Recap: Solid Execution with Likely Conservative Guidance

CITI'S TAKE

PCTY reported a solid F4Q with a slight accel to recurring rev, a better beat vs.

last Q, and an 8% initial FY27 recurring rev growth guide, likely in-line with

buyside expectations, in our view. Execution momentum continued amid a

stable demand backdrop, with PCTY issuing what appears to be a conservative

initial FY27 guide (the typical approach historically) relative to the F4Q recurring

exit rate of 12.4% y/y, yet below cons EBITDA guide by ~$10M, ex-accounting

changes and inorganic opex from recent M&A. We see PCTY continuing to

differentiate from near-peers on both execution and product strategy.

Reiterate Buy and we raise our TP to $168 (from $136) on 4.4x FY28 EV/Rev or

16x EV/FCF on an updated valuation regression and revised ests.

What Happened — PCTY reported upside vs. cons to rev, recurring rev, EBITDA, and

EPS of $13.3M (+3.1% beat vs. 2.4% 4Q ave), $10.4M (+2.6% beat vs. 2.1% last Q),

$14.2M, and $0.23, respectively. Recurring rev continued to accelerate modestly to

12.4% y/y from 11.6% in F3Q, helped by a stable macro/demand backdrop and

continued strong execution, balanced across new lands, ARPU expansion, and

steady retention w/ a slight benefit from M&A (we est ~35bps). PCTY continues to

extend the product portfolio across HCM, finance, IT, and new agentic AI offerings

(Ignite), along with inorganic contributions from Grayscale and Aidora.

n

Buy

Price (04 Aug 26 16:00)

US$143.32

Target price

US$168.00↑

from US$136.00

Expected share price return

17.2%

Expected dividend yield

0.0%

Expected total return

17.2%

Market Cap

US$7,674M

Price Performance

(RIC: PCTY.O, BB: PCTY US)

PCTY gave an initial FY27 recurring rev guide +$6.0M ahead of cons (+8.1% y/y),

including some inorganic contribution, primarily from Grayscale (we est $5.8M).

EBITDA for FY27 was guided $6M ahead of cons, although includes a +130bps

tailwind from an accounting change on deferred contract amort (+$24M tailwind)

with organic EBITDA likely down ~$10M when accounting for opex from M&A. F1Q

…