PCTYPaylocity Holding Corporation
Is the business good?
The checks split: 7 of 9 health tests passed and earnings fully cash-backed (2.0×), but returns that lean on debt.
High fundamental quality. Nine pass/fail tests of year-over-year health from the filings.
Operating profit is fully backed by cash. Conversion is improving vs a year ago.
Positive operating leverage, operating profit is growing faster than sales, so margins widen as the business scales.
Leverage-amplified, a high assets-to-equity ratio does much of the work. ROE 22% = margin × turnover × leverage.
Unless marked, from derived.
Against the whole market›
Percentile against every name Ryufin tracks. Higher is better; the tick marks the middle of the market. Context, not one of the checks above.
Where this answer is blind. The F-score rewards improvement, so an already-elite company can score mid-pack.
How good a business is PCTY?
Paylocity Holding Corporation earns 30% on the capital it employs against a 9.0% cost of capital, so the business is worth more the bigger it gets.
Return on invested capital · cost of capital 9.0% · 21 points above what the capital costs: growth creates value
- Operating margin
- 22%
Operating margin · Software - Application median 6.4% · 12 months to Q4 2026
- Cash conversion
- 1.98×
Cash conversion · 1.87× a year ago · operating cash flow covers the operating profit after tax
- R&D as % of revenue
- 13%
R&D as % of revenue
| Year | Operating margin |
|---|---|
| FY2021 | 9.1% |
| FY2022 | 9.9% |
| FY2023 | 13% |
| FY2024 | 19% |
| FY2025 | 19% |
| FY2026 | 22% |
Details›
- Gross margin12 months to Q4 2026
- 69%
- Operating margin12 months to Q4 2026
- 22%
- Net margin12 months to Q4 2026
- 15%
- Free cash flow margin
- 28%
- R&D as % of revenue
- 13%
- Revenue, trailing twelve months
- $1.77B
- Free cash flow, trailing twelve months
- $497M
- Net income, trailing twelve months
- $270M
- Return on invested capitaloperating profit after tax ÷ debt + equity − cash
- 30%
Margins, capital and share counts from the statements as filed with the SEC; cash conversion is operating cash flow over operating profit after tax.
Software, Application
Ranks #6 of 96 by RyuScore