Gusto hits $1 billion in revenue as IPO speculation continues

Small-business payroll provider Gusto surpassed $1 billion in revenue earlier this year and has been cash flow positive for several years. According to Gusto co-founder and CEO Josh Reeves, the company’s revenue growth has accelerated in each of the last five quarters. Unlike many startups that report ARR (Annualized Recurring Revenue)—an estimate of the value of their contracts in the upcoming 12 months—Gusto’s milestone represents actual revenue earned over the previous 12 months.

This financial performance highlights Gusto’s capital efficiency compared to its highly valued peers. In June 2025, Gusto launched a $200 million tender offer—a public solicitation to all shareholders to buy their shares—which valued the company at $9.3 billion, according to a report by Fortune. This transaction valued the company about where it was valued in early 2022. In contrast, Gusto’s competitors command much higher valuations relative to their scale:

• Gusto: Surpassed $1 billion in actual revenue earlier this year; last valued at $9.3 billion in June 2025.
• Deel: Crossed $1 billion in ARR last year; last valued at $17.3 billion after raising a $300 million funding round in October.
• Rippling: Hit $1 billion in ARR; last valued at $16.8 billion after raising a $450 million funding round in May 2025.

Gusto has also expanded its product suite and improved operational efficiency. Last year, the company completed the acquisition of Guideline, a startup offering retirement plans to small and medium businesses, for about $600 million. Following the December board appointment of Anthropic CTO Rahul Patil, Gusto is already reporting massive efficiency gains. According to the company, AI now accounts for 50% of all new code generation and handles an equal 50% share of customer support cases.

These efficiency gains and steady financials provide Gusto with a stable foundation, especially as its primary rivals, Deel and Rippling, remain embroiled in a high-profile corporate espionage lawsuit. While Gusto’s financial health makes it a strong candidate for public markets, a public debut appears iffy in 2026 due to a cold IPO market. When asked about plans for a public listing, a Gusto spokesperson stated, “Nothing to share on the IPO timeline front.”

Why it matters

Gusto’s achievement of $1 billion in revenue and its cash-flow-positive status position the company for a potential future IPO or fundraise, distinguishing it from competitors currently embroiled in legal disputes.