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

Paycom Software (NYSE:PAYC) issued its quarterly earnings results on Wednesday. The software maker reported $2.78 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 net margin of 22.44% and a return on equity of 28.34%. Paycom Software’s revenue for the quarter was up 9.8% compared to the same quarter last year. During the same quarter in the prior year, the business 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

PAYC traded down $0.31 during trading on Wednesday, hitting $174.99. The company’s stock had a trading volume of 818,560 shares, compared to its average volume of 781,453. The firm’s 50 day moving average price is $141.40 and its two-hundred day moving average price is $133.66. 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 has a 12 month low of $104.90 and a 12 month high of $248.95. The stock has a market capitalization of $8.33 billion, a price-to-earnings ratio of 20.23, a price-to-earnings-growth ratio of 1.49 and a beta of 0.76.

Paycom Software Announces Dividend

The company also recently disclosed a quarterly dividend, which will be paid on Tuesday, September 8th. Stockholders of record on Monday, August 24th will be issued a dividend of $0.375 per share. The ex-dividend date of this dividend is Monday, August 24th. This represents a $1.50 annualized dividend and a dividend yield of 0.9%. Paycom Software’s dividend payout ratio (DPR) is presently 17.34%.

Institutional Investors Weigh In On Paycom Software

A number of institutional investors and hedge funds have recently added to or reduced their stakes in PAYC. CYBER HORNET ETFs LLC bought a new position in Paycom Software in the second quarter valued at $29,000. MUFG Securities EMEA plc acquired a new position in Paycom Software during the second quarter worth approximately $33,000. Brown Brothers Harriman & Co. increased its position in Paycom Software by 190.6% during the fourth quarter. Brown Brothers Harriman & Co. now owns 154 shares of the software maker’s stock worth $25,000 after buying an additional 101 shares during the last quarter. Palisade Asset Management LLC bought a new stake in Paycom Software in the third quarter valued at approximately $33,000. Finally, EverSource Wealth Advisors LLC raised its stake in Paycom Software by 62.6% in the second quarter. EverSource Wealth Advisors LLC now owns 304 shares of the software maker’s stock valued at $70,000 after buying an additional 117 shares during the period. Institutional investors own 87.77% of the company’s stock.

Wall Street Analysts Forecast Growth

A number of equities analysts have weighed in on the stock. Zacks Research raised shares of Paycom Software from a “hold” rating to a “strong-buy” rating in a research report on Monday, May 18th. Citigroup lifted their target price on Paycom Software from $120.00 to $136.00 and gave the company a “neutral” rating in a research note on Thursday, May 7th. BMO Capital Markets increased their price objective on Paycom Software from $137.00 to $145.00 and gave the stock a “market perform” rating in a report on Thursday, May 7th. BTIG Research boosted their price target on shares of Paycom Software from $140.00 to $160.00 and gave the stock a “buy” rating in a research report on Thursday, May 7th. Finally, Weiss Ratings raised Paycom Software from a “sell (d+)” rating to a “hold (c-)” rating in a research note on Thursday, July 16th. One research analyst has rated the stock with a Strong Buy rating, five have issued a Buy rating and eight have issued a Hold rating to the company’s stock. According to MarketBeat.com, Paycom Software has an average rating of “Moderate Buy” and a consensus target price of $159.75.

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.