Paycom Software (NYSE:PAYC) Releases Quarterly Earnings Results, Beats Estimates By $0.40 EPS

Key Points

• Paycom beat quarterly expectations: EPS was $2.78 versus the $2.38 consensus, while revenue reached $531.2 million, up 9.8% year over year and above estimates.
• The company raised its 2026 outlook to $2.197 billion–$2.212 billion in revenue and $1.007 billion–$1.022 billion in adjusted EBITDA, with free cash flow expected to exceed $650 million.
• Paycom repurchased approximately 2.6 million shares for $346 million during the quarter and declared a quarterly dividend of $0.375 per share.

Paycom Software (NYSE:PAYC - Get Free Report) issued its quarterly earnings results on Wednesday. The software maker reported $2.78 earnings per share (EPS) for the quarter, topping the consensus estimate of $2.38 by $0.40, FiscalAI reports. The firm had revenue of $531.20 million during the quarter, compared to analyst estimates of $513.12 million. Paycom Software had a return on equity of 28.34% and a net margin of 22.44%.The company's revenue was up 9.8% compared to the same quarter last year. During the same quarter in the previous year, the company posted $2.06 earnings per share.

Here are the key takeaways from Paycom Software's conference call:

• Paycom reported Q2 revenue of $531 million, up 10% year over year, while adjusted EBITDA rose to $235 million, with a 44.2% margin that expanded 320 basis points. Management said results were broad-based and exceeded expectations.
• The company raised its 2026 outlook, now forecasting revenue of $2.197 billion-$2.212 billion and adjusted EBITDA of $1.007 billion-$1.022 billion, implying a record 46% margin at the midpoint. Paycom also expects 2026 free cash flow to exceed $650 million.
• Management highlighted continued operating efficiencies from automation, including lower labor and process costs, while investments in internally hosted AI models are expected to generate roughly $100 million in R&D savings and at least $30 million in reduced third-party response fees this year.
• Paycom repurchased approximately 2.6 million shares for $346 million during the quarter and nearly 11 million shares for $1.4 billion in the first half, reducing shares outstanding by 20%. The company ended the quarter with $1.66 billion remaining under its buyback authorization and approved a quarterly dividend of $0.375 per share.
• Product momentum remains a key strategic focus: Project Arc improved customization and scalability, while career and succession planning and the newly launched Asset Management solution are receiving positive early client feedback. Management expects these newer products to contribute more meaningfully over time, though their impact on Q2 was limited.

Paycom Software Price Performance

NYSE:PAYC traded down $0.31 during trading hours on Wednesday, reaching $174.99. 818,560 shares of the company were exchanged, compared to its average volume of 781,453. The firm has a market cap of $8.33 billion, a PE ratio of 20.23, a price-to-earnings-growth ratio of 1.49 and a beta of 0.76. Paycom Software has a twelve month low of $104.90 and a twelve month high of $248.95. The stock's 50-day moving average is $141.40 and its 200-day moving average is $133.66. The company has a current ratio of 1.08, a quick ratio of 1.08 and a debt-to-equity ratio of 0.83.

Paycom Software Announces Dividend

The firm also recently declared a quarterly dividend, which will be paid on Tuesday, September 8th. Shareholders of record on Monday, August 24th will be given a dividend of $0.375 per share. The ex-dividend date is Monday, August 24th. This represents a $1.50 dividend on an annualized basis and a yield of 0.9%. Paycom Software's dividend payout ratio is currently 17.34%.

Analyst Upgrades and Downgrades

A number of analysts have recently commented on the company. TD Cowen dropped their price target on Paycom Software from $154.00 to $149.00 and set a "buy" rating on the stock in a research report on Friday, June 26th. Weiss Ratings upgraded shares of Paycom Software from a "sell (d+)" rating to a "hold (c-)" rating in a research note on Thursday, July 16th. Mizuho raised their price objective on Paycom Software from $120.00 to $130.00 and gave the stock a "neutral" rating in a research note on Thursday, May 7th. Citigroup upped their price objective on Paycom Software from $120.00 to $136.00 and gave the stock a "neutral" rating in a research note on Thursday, May 7th. Finally, Barclays raised their target price on shares of Paycom Software from $148.00 to $154.00 and gave the company an "equal weight" rating in a research note on Tuesday, July 21st. One analyst has rated the stock with a Strong Buy rating, five have given a Buy rating and eight have assigned a Hold rating to the stock. According to data from MarketBeat, Paycom Software has a consensus rating of "Moderate Buy" and a consensus price target of $159.75.

Institutional Inflows and Outflows

Hedge funds have recently bought and sold shares of the stock. Brighton Jones LLC acquired a new position in shares of Paycom Software during the 4th quarter worth about $638,000. AQR Capital Management LLC raised its stake in shares of Paycom Software by 23.7% during the 1st quarter. AQR Capital Management LLC now owns 19,155 shares of the software maker's stock worth $4,136,000 after buying an additional 3,674 shares in the last quarter. United Services Automobile Association acquired a new stake in Paycom Software in the first quarter valued at $215,000. Empowered Funds LLC lifted its position in shares of Paycom Software by 22.8% in the first quarter. Empowered Funds LLC now owns 7,958 shares of the software maker's stock valued at $1,739,000 after acquiring an additional 1,480 shares in the last quarter. Finally, Focus Partners Wealth lifted its stake in shares of Paycom Software by 220.8% during the first quarter. Focus Partners Wealth now owns 3,940 shares of the software maker's stock valued at $861,000 after buying an additional 2,712 shares during the period. Hedge funds and other institutional investors own 87.77% of the company's stock.

Paycom Software Company Profile

Paycom Software, Inc NYSE: PAYC is a cloud-based human capital management (HCM) software provider that delivers an end-to-end solution for human resources, payroll, talent acquisition, time and labor management, and talent management. Its single-database platform enables organizations to process payroll, track time, administer benefits, and manage recruiting and employee development through a unified system. Paycom's software is designed to streamline administrative tasks, improve data accuracy, and provide real-time reporting and analytics to support strategic HR decisions.

The company's core offerings include payroll processing with built-in tax compliance, employee self-service functionality, automated time tracking, and customizable talent acquisition tools that allow employers to create and post job requisitions, screen candidates, and conduct onboarding electronically.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.

Continue following MarketBeat

Add MarketBeat as your preferred source on Google to see our latest stories in your feed.

Add As Preferred Source