Paycom Software (NYSE:PAYC) Issues Earnings Results

Paycom Software (NYSE:PAYC) released its quarterly earnings results on Wednesday. The software maker reported $2.78 EPS for the quarter, beating analysts’ consensus estimates of $2.38 by $0.40, FiscalAI reports. Paycom Software had a net margin of 22.44% and a return on equity of 28.34%. The firm had revenue of $531.20 million for the quarter, compared to analyst estimates of $513.12 million. During the same period in the previous year, the business earned $2.06 earnings per share. The company’s revenue for the quarter was up 9.8% compared to the same quarter last year.

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 Stock Performance

Shares of NYSE PAYC traded up $37.53 during midday trading on Thursday, hitting $212.33. 3,042,392 shares of the company’s stock were exchanged, compared to its average volume of 1,351,751. The firm has a market capitalization of $10.11 billion, a PE ratio of 24.46, a price-to-earnings-growth ratio of 1.49 and a beta of 0.76. The company’s 50 day moving average price is $141.40 and its 200 day moving average price is $133.66. Paycom Software has a 12 month low of $104.90 and a 12 month high of $248.95. The company has a quick ratio of 1.08, a current ratio of 1.08 and a debt-to-equity ratio of 0.83.

Paycom Software Announces Dividend

The firm also recently announced a quarterly dividend, which will be paid on Tuesday, September 8th. Stockholders of record on Monday, August 24th will be paid a dividend of $0.375 per share. This represents a $1.50 annualized dividend and a dividend yield of 0.7%. The ex-dividend date is Monday, August 24th. Paycom Software’s payout ratio is currently 17.34%.

Trending Headlines about Paycom Software

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

• Positive Sentiment: Q2 beat expectations: Revenue rose 9.8% year over year to $531.2 million, exceeding the $513.1 million consensus estimate. Non-GAAP earnings of $2.78 per diluted share also surpassed expectations and increased from $2.06 a year earlier. Paycom Q2 2026 Results
• Positive Sentiment: Higher 2026 guidance: Management raised its full-year revenue outlook to $2.197 billion–$2.212 billion and adjusted EBITDA guidance to $1.007 billion–$1.022 billion. The improved forecast reflects recurring sales growth, product expansion and expected benefits from automation and internally hosted AI models. Paycom 2026 Forecast
• Positive Sentiment: Capital returns and margins supported sentiment: Paycom repurchased approximately 2.57 million shares for $345.9 million during the quarter, while expanding margins and anticipated free cash flow above $650 million highlighted operating leverage. Paycom Q2 Earnings Call Takeaways
• Positive Sentiment: Analysts lifted targets: BTIG raised its target to $230 and maintained a buy rating, while KeyCorp increased its target to $270 and assigned an overweight rating. These revisions suggest some analysts view the earnings and outlook improvements as warranting a higher valuation. Analyst Forecast Revisions
• Neutral Sentiment: Analyst reactions were mixed: Barclays, BMO Capital Markets, Stifel and Cantor Fitzgerald raised their targets but retained equal-weight, market-perform, hold or neutral ratings.
• Negative Sentiment: The stock’s sharp move has placed it above several revised targets, including Barclays’ $210, BMO’s $208 and Stifel’s $200, suggesting valuation and near-term upside may be more limited for cautious investors.

Institutional Inflows and Outflows

Several hedge funds have recently made changes to their positions in PAYC. Brighton Jones LLC bought a new position in shares of Paycom Software during the fourth quarter valued at $638,000. EP Wealth Advisors LLC bought a new stake in shares of Paycom Software in the fourth quarter worth $226,000. EFG International AG acquired a new stake in Paycom Software in the fourth quarter valued at $106,000. Mangrove Partners IM LLC bought a new position in Paycom Software during the 4th quarter worth $206,000. Finally, Zions Bancorporation National Association UT lifted its holdings in Paycom Software by 4,210.5% during the 4th quarter. Zions Bancorporation National Association UT now owns 819 shares of the software maker’s stock worth $131,000 after buying an additional 800 shares during the period. 87.77% of the stock is owned by institutional investors.

Analyst Ratings Changes

Several brokerages have recently issued reports on PAYC. Guggenheim increased their price objective on shares of Paycom Software from $180.00 to $225.00 and gave the stock a “buy” rating in a research report on Thursday. Stifel Nicolaus upped their target price on shares of Paycom Software from $120.00 to $200.00 and gave the stock a “hold” rating in a research note on Thursday. Mizuho increased their target price on Paycom Software from $120.00 to $130.00 and gave the stock a “neutral” rating in a report on Thursday, May 7th. KeyCorp lifted their price target on Paycom Software from $195.00 to $270.00 and gave the company an “overweight” rating in a research note on Thursday. Finally, BTIG Research upped their price objective on Paycom Software from $160.00 to $230.00 and gave the stock a “buy” rating in a research report on Thursday. One analyst has rated the stock with a Strong Buy rating, five have given a Buy rating and nine have assigned a Hold rating to the stock. Based on data from MarketBeat, the stock presently has a consensus rating of “Hold” and a consensus price target of $191.23.

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.