Paylocity's Q3 2025 Earnings Call: Key Contradictions in Pricing, Market Stability, and Sales Strategies

Pricing model for future modules, macro environment impact on sales and hiring, Office of the CFO pricing models, sales and marketing expenses, and market stability and buyer decision-making are the key contradictions discussed in Paylocity's latest 2025Q3 earnings call.



Recurring Revenue Growth and Product Innovation:
- Paylocity reported recurring and other revenue of $421.1 million for Q3, growing 15% over the same period last year.
- This growth was driven by strong product differentiation and expansion of the product suite, supported by sustained multiyear investment in R&D.

Operating Efficiency and Margin Expansion:
- Adjusted gross profit in Q3 was 77%, an increase of 110 basis points from the previous year.
- This was achieved by scaling operational costs while maintaining industry-leading service levels, contributing to significant margin expansion.

Impact of Airbase Acquisition and Integration:
- Airbase is expected to serve as a meaningful point of competitive differentiation and drive average revenue per client expansion.
- The acquisition is enabling a single pane of glass for all payroll and non-payroll-related spend management, resonating with clients.

Broker Channel Strength and Strategic Partnerships:
- The broker channel represented over 25% of new business, with consistent investments in technology and relationships.
- Paylocity's strategy of not competing with brokers for insurance business has contributed to the channel's success amidst industry consolidation.