Paycom Software (NYSE:PAYC) Releases Earnings Results, Beats Expectations By $0.01 EPS

Paycom Software (NYSE:PAYC) released its quarterly earnings results on Wednesday. The software maker reported $2.45 EPS for the quarter, beating the consensus estimate of $2.44 by $0.01, FiscalAI reports. The business had revenue of $544.30 million for the quarter, compared to the consensus estimate of $542.79 million. Paycom Software had a net margin of 22.65% and a return on equity of 24.79%. Paycom Software’s revenue was up 10.2% compared to the same quarter last year. During the same period in the prior year, the company posted $2.32 earnings per share.

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

• Paycom reported strong 2025 results with total revenue of $2.05B (Q4 revenue $544M, recurring revenue up 11% in Q4) and full‑year recurring revenue growth of 10%, driven by higher sales and automation efficiencies.
• Profitability and cash generation were robust — full‑year Adjusted EBITDA of $882M (43% margin, +180 bps), operating cash flow of $679M (+27%), free cash flow of $404M (+20%), zero debt, and continued opportunistic buybacks ($370M repurchased in 2025 with ~$1.1B remaining authorization).
• Product automation adoption (IWant, Beti, GONE) is boosting client ROI and retention — annual revenue retention rose to 91%, Paycom saw a record number of returning clients, and IWant usage jumped ~80% in January, supporting upsell and stickiness.
• 2026 guidance is conservative vs. 2025 results — management expects total revenue of $2.175B–$2.195B (6%–7% growth) and recurring revenue up 7%–8%, signaling a near‑term deceleration and reliance on sales execution and “inflection opportunities” to outpace the guide.
• Management invested heavily in 2025 CapEx (~$275M, ~13% of revenue) including ~ $100M for data center expansion to support AI/automation; this supports longer‑term product differentiation but raised capital intensity for the year.

Paycom Software Stock Performance

Shares of Paycom Software stock traded up $0.75 on Thursday, hitting $119.46. The company had a trading volume of 4,826,764 shares, compared to its average volume of 1,353,206. The stock has a market capitalization of $6.72 billion, a price-to-earnings ratio of 14.86, a P/E/G ratio of 1.31 and a beta of 0.79. Paycom Software has a 1 year low of $104.90 and a 1 year high of $267.76. The stock has a 50 day moving average of $151.96 and a 200-day moving average of $185.32.

Paycom Software Dividend Announcement

The firm also recently announced a quarterly dividend, which will be paid on Monday, March 23rd. Stockholders of record on Monday, March 9th will be given a dividend of $0.375 per share. The ex-dividend date of this dividend is Monday, March 9th. This represents a $1.50 annualized dividend and a dividend yield of 1.3%. Paycom Software’s payout ratio is presently 18.66%.

Insider Transactions at Paycom Software

In other Paycom Software news, CFO Robert D. Foster sold 1,300 shares of the stock in a transaction dated Wednesday, December 10th. The shares were sold at an average price of $162.66, for a total value of $211,458.00. Following the completion of the sale, the chief financial officer owned 14,747 shares in the company, valued at approximately $2,398,747.02. This trade represents a 8.10% decrease in their position. The transaction was disclosed in a filing with the SEC, which is accessible through the SEC website. 10.90% of the stock is owned by corporate insiders.

Institutional Inflows and Outflows

A number of institutional investors have recently made changes to their positions in the company. Brighton Jones LLC bought a new position in Paycom Software during the fourth quarter valued at approximately $638,000. Focus Partners Wealth lifted its stake in Paycom Software by 220.8% in the first quarter. Focus Partners Wealth now owns 3,940 shares of the software maker’s stock worth $861,000 after purchasing an additional 2,712 shares during the last quarter. Vestcor Inc boosted its position in Paycom Software by 44.7% during the third quarter. Vestcor Inc now owns 1,433 shares of the software maker’s stock valued at $298,000 after buying an additional 443 shares during the period. Boothbay Fund Management LLC bought a new position in shares of Paycom Software during the second quarter valued at about $290,000. Finally, Brown Advisory Inc. purchased a new position in shares of Paycom Software in the second quarter worth about $237,000. Hedge funds and other institutional investors own 87.77% of the company’s stock.

Analysts Set New Price Targets

Several equities research analysts recently commented on the stock. Weiss Ratings downgraded shares of Paycom Software from a “hold (c-)” rating to a “sell (d+)” rating in a research report on Tuesday, February 3rd. Guggenheim decreased their price objective on Paycom Software from $210.00 to $180.00 and set a “buy” rating for the company in a report on Thursday. JPMorgan Chase & Co. reduced their price target on Paycom Software from $235.00 to $220.00 and set a “neutral” rating on the stock in a research report on Thursday, November 6th. Citigroup cut their price objective on Paycom Software from $191.00 to $185.00 and set a “neutral” rating on the stock in a research note on Tuesday, December 23rd. Finally, Cantor Fitzgerald reduced their price objective on shares of Paycom Software from $135.00 to $115.00 and set a “neutral” rating on the stock in a research note on Thursday. Five equities research analysts have rated the stock with a Buy rating, ten have issued a Hold rating and two have assigned a Sell rating to the company. According to MarketBeat, Paycom Software has an average rating of “Hold” and a consensus target price of $172.64.

Key Stories Impacting Paycom Software

Here are the key news stories impacting Paycom Software this week:

• Positive Sentiment: Q4 earnings: Paycom beat EPS estimates ($2.45 vs. $2.44) and reported margin expansion and 10% YoY revenue growth — positives for profitability and long‑term unit economics. Article Title
• Positive Sentiment: IWant AI study: Forrester‑commissioned research shows Paycom’s IWant AI engine can deliver significant multi‑year ROI for customers — a potential long‑term revenue and retention catalyst if adoption scales. Article Title
• Positive Sentiment: Some analysts remain constructive: firms such as Guggenheim, KeyCorp and BTIG still carry buy/overweight calls and lifted or maintain sizable upside targets, providing potential support for a recovery if growth stabilizes. Article Title
• Neutral Sentiment: Dividend: Paycom declared a regular quarterly cash dividend ($0.375/sh), a mild positive for income investors but unlikely to materially change near‑term price action. Article Title
• Neutral Sentiment: Mixed analyst moves: Several firms trimmed price targets (Barclays, BMO, Mizuho) but often kept neutral/equal‑weight ratings — signaling caution without wholesale sell‑side capitulation. Article Title
• Negative Sentiment: Guidance shortfall: Paycom’s FY‑2026 revenue outlook landed below many analysts’ expectations (reports describe a weak 2026 revenue forecast), which is the primary driver of the share decline and prompted immediate re‑rating. Article Title
• Negative Sentiment: Revenue miss and analyst downgrades: Q4 revenue ($517.1M) missed consensus (~$543M), and several firms (Cantor Fitzgerald, Mizuho among others) cut price targets — some to near or below the current price — amplifying downside pressure. Article Title
• Negative Sentiment: Technical/market reaction: Shares have traded heavily and hit new lows on the guidance/estimate misses, increasing short‑term volatility and downside risk until the company demonstrates stabilization in revenue trends. Article Title

About Paycom Software

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.