Gusto hits $1B revenue, a figure that brings it closer to public markets

In a landscape where many traditional SaaS companies are grappling with the impact of AI, Gusto, a payroll service provider for small businesses, is thriving. The company, which has been in operation for 14 years, recently announced that it achieved over $1 billion in revenue in the past year. This figure is significant as it reflects actual revenue rather than projected earnings, setting Gusto apart from many startups that typically report annualized recurring revenue (ARR). Gusto's valuation currently stands at approximately $9.3 billion, a figure noted by Fortune following a $200 million tender offer made to its employees in June 2025. This valuation is quite favorable compared to its competitors in the industry. For example, Deel, which caters to larger international companies, reported crossing $1 billion in ARR last year and was valued at $17.3 billion after raising $300 million in funding in October. Meanwhile, Rippling, a competitor that also announced reaching $1 billion in ARR recently, boasts a valuation of $16.8 billion after securing $450 million in May 2025. Gusto’s achievement of exceeding the $1 billion revenue mark highlights its robust financial standing among rivals. In addition to its revenue success, Gusto has been expanding its operations strategically. The company acquired Guideline, a provider of retirement plans for small to medium-sized businesses, for approximately $600 million last year. Following the appointment of Anthropic’s CTO Rahul Patil to its board in December, Gusto has reported significant improvements in operational efficiency. Notably, AI now accounts for half of all new code generation and manages a significant portion of customer support inquiries. With its impressive revenue figures and relatively modest valuation, Gusto is well-positioned for potential fundraising initiatives or even an initial public offering (IPO) at a higher valuation. Unlike its competitors Deel and Rippling, which are currently involved in a corporate espionage lawsuit, Gusto has maintained a focus on its core business without such distractions. Although Gusto has often been mentioned as a potential IPO candidate, the timeline for going public remains uncertain, especially given the current state of the IPO market. In a recent interview, Gusto's CEO and co-founder Josh Reeves emphasized his preference for concentrating on customer service and business growth rather than the prospect of an IPO. The company has not provided any updates regarding its IPO timeline, leaving stakeholders eager for further developments.