Paychex vs Paylocity
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KIRA’s take AI analyst
I put Paychex and Paylocity side by side, using each one’s latest annual report. Here is what stands out:
- Paychex is the larger business, with $6.5B of revenue in fiscal 2026 against $1.8B for Paylocity, about 3.7 times as much.
- Paychex grew revenue faster (16.9%, against 11.0%).
- Paychex kept more of each dollar of sales as operating profit (38.6% operating margin, against 21.8%).
- Paychex turned more of its sales into free cash flow (35.7% FCF margin, against 28.1%).
Who comes out ahead
Of the 11 measures where higher (or lower) is clearly better, how many each company leads.
Paychex
PAYX
6/11
Revenue growthGross marginOperating marginNet marginFCF marginReturn on equity
Paylocity
PCTY
5/11
5-year growthReturn on capitalPiotroski F-scoreNet debt / EBITDAShare count change
Side by side
Best in the row
| Latest fiscal year | PAYX FY26 | PCTY FY26 |
|---|---|---|
| Size | ||
| Market cap | $41.3B | $9.7B |
| Revenue | $6.5B | $1.8B |
| Free cash flow | $2.3B | $497M |
| Net income | $1.8B | $270M |
| Growth | ||
| Revenue growth | 16.9% | 11.0% |
| 5-year growth | 9.9% | 22.8% |
| Share count change | −0.6% | −3.2% |
| Profitability | ||
| Gross margin | 74.3% | 69.2% |
| Operating margin | 38.6% | 21.8% |
| Net margin | 27.0% | 15.2% |
| FCF margin | 35.7% | 28.1% |
| Return on capital | 26.2% | 26.5% |
| Return on equity | 44.8% | 22.0% |
| Balance sheet | ||
| Net debt | $3.4B | −$191M |
| Net debt / EBITDA | 1.2x | −0.4x |
| Dividends and buybacks | $2.2B | $398M |
| Valuation & quality | ||
| P/E | 22.9x | — |
| Piotroski F-score | 6 | 8 |
Ten years
Revenue
Operating margin
Free cash flow
Return on capital
Each company's latest fiscal year; fiscal years end in different months. The best value in each row is highlighted where higher (or lower) is clearly better. Not investment advice.