PCTY · Research
Paylocity: Buy as Shrinking Stock Pay Triples Owner Cash to $358M at 0.60x Base DCF
Paylocity expanded GAAP operating margin 930 bps to 23.4% while cutting absolute SBC dollars three straight years, tripling annual Owner FCF to $358.4M and leaving shares at $142.14 at a 40% discount to our $236.62 base DCF.
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Rare software equity discipline driving a 3.2x surge in owner cash
- TTM revenue
- $1.7B
- GAAP operating margin
- 23.4%
- Gross margin
- 74.2%
- 1-Yr R&D payback
- 0.62x
Most mid-cap SaaS management teams talk about margin leverage while letting equity grants compound alongside revenue. Paylocity did the opposite: over its June fiscal years FY2023 through FY2026, revenue expanded from $1.10B to $1.65B ($1.70B TTM, +18.1% year over year) while annual stock-based pay declined every single year, dropping SBC intensity from 13.4% to 8.4% of revenue.
Simultaneously extending from core mid-market payroll and HR into CFO office workflows through Airbase (`Paylocity for Finance`: AP automation, corporate cards, and expense management) widened average revenue per client and lifted FY2026 strict Owner FCF to $358.4M
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