Paylocity (PCTY) Q3 2026 Earnings Transcript

Motley Fool Transcribing, The Motley Fool

Fri, May 8, 2026 astatine 12:30 PM CDT 48 min read

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DATE

Thursday, May 7, 2026 astatine 5 p.m. ET

CALL PARTICIPANTS

• Co-Chief Executive Officer — Steven Beauchamp

• President and Co-Chief Executive Officer — Toby Williams

• Chief Financial Officer — Ryan Glenn

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Full Conference Call Transcript

Steven Beauchamp: Thanks, Ryan, and acknowledgment to each of you for joining america connected our 3rd 4th fiscal '26 net call. The momentum we saw successful the archetypal fractional of the twelvemonth continued into Q3, which included a beardown selling play show by our income and cognition teams and helped to thrust 11.6% recurring and different gross maturation successful the 4th and accrued guidance for fiscal '26. Our multiyear concern successful R&D and committedness to driving innovation continues to substance our maturation arsenic the operation of HCM and concern and IT successful 1 azygous platform, each underpinned by expanded AI capabilities and our halfway worker grounds information represents the broadest and deepest offering successful the market.

A captious constituent driving our merchandise strategy is the continued concern successful embedding AI crossed our platform, specified that AI capabilities are woven in, not bolted connected and enabling the improvement from AI adjunct to AI agents. Powered by automated workflows, leveraging our clients' halfway worker grounds data, these agents are embedded into our clients' regular processes, making everything they bash much businesslike by empowering our clients to determination from answers to action.

For example, our accounts payable cause leverages a operation of rules and generative AI to automatically populate invoice and acquisition bid details, which are past categorized by leveraging worker and ERP data, improving accuracy, reducing manual effort and speeding up the AP process by implicit 60%, with astir 95% of transactions processed cleanly connected the archetypal pass. To thrust further enlargement of our AI capabilities, past month, we announced the acquisition of Grayscale, an AI-powered recruiting automation institution that builds upon our existing recruiting capabilities by helping companies hiring astatine standard determination faster without compromising quality. This acquisition represents a continuation of our broader strategy to embed AI crossed our platform, delivering quality wrong halfway workflows.

By utilizing AI for campaigner matching, automated engagement and continuous campaigner check-ins, our clients and their recruiting teams volition payment from a simplification successful manual administrative enactment and quicker clip to hire. We are excited by the accidental to integrate Grayscale's precocious capabilities into our existing suite, delivering incremental worth to our clients that we tin straight monetize successful the signifier of a premium SKU for incremental AI-driven capabilities. Alongside our concern successful AI, we are besides enhancing the spot and breadth of our platform, highlighted by the caller motorboat of Paylocity Elevate solutions. This caller offering pairs our unified level with dedicated payroll and HR teams that bring heavy operational expertise to negociate this enactment straight for our clients.