Paylocity Achieves 16% Revenue Growth in Q2 2025, Drives Product Differentiation with AI-Powered Innovations
The company announced strong results in its second quarter of fiscal year 2025, with total revenue growing 16% over the same period last year. Paylocity's Chief Financial Officer, Ryan Glenn, attributed this growth to the company's sustained multi-year investment in research and development (R&D), which has resulted in significant expansion of its product suite.
"Our strong results continued in Q2 with recurring and other revenue growth of 17%, and as our differentiated value proposition of providing the most modern software in the industry continues to resonate in the marketplace," said Steve Beauchamp, Executive Chairman. "Total revenue grew 16% over Q2 of last year."
Paylocity's product differentiation has been a key driver of its durable revenue growth and expanded average revenue per client (ARPC). The company recently launched Benefit Decision Support and expanded into the Office of the CFO with its integrated headcount planning product, achieving a maximum average revenue per year (MAX PEPY) of $600. This is a significant milestone, exceeding the target set in August 2023.
The company's commitment to innovation continues to bear fruit, with the launch of AI-powered features such as natural language search capabilities and an AI assistant chatbot that has seen a 30% increase in utilization since its launch in October. Paylocity is pleased with early levels of adoption and excited to continue adding additional AI-enabled functionality and key use cases over time.
"We are encouraged by the benefits our AI-related investments are driving for our clients," said Beauchamp. "Our new AI assistant chatbot is now generally available to all client admins, and we're pleased with early levels of adoption."
Paylocity's product innovation continues to be recognized by third-party endorsements. The company was recently awarded the TrustRadius Buyers' Choice Award and named overall leader in 10 HCM product categories in G2's Winter 2025 grid reports.
The company's ongoing commitment to driving further product expansion and expansion of ARPC across new and existing clients with new HCM and Office of the CFO products over time remains strong. Paylocity's leadership team is confident in their ability to drive revenue growth and profitability in fiscal year 2025, as evidenced by increased guidance for the fiscal year.
"We are pleased with our progress and remain committed to delivering value to our clients through innovation and product expansion," said Beauchamp. "Our momentum continues into Q3, and we're excited about the future."
