The company posted strong earnings for the third quarter.Shares of Paycom Software (PAYC 0.39%) jumped 25.5% in October, according to data from S&P Global Market Intelligence. The web-based HR and payroll management provider accelerated revenue growth in the third quarter as it continues to automate workloads for back-office functions. After collapsing earlier this summer, Paycom shares have shot up over 45% in recent months as investors get enthusiastic about the long-term software winner again.Here's why ...

Key TakeawaysShares of payroll and HR software provider Paycom Software surged 21% on Thursday, posting the biggest gain in the S&P 500.Paycom exceeded third-quarter sales and profit estimates as the strong labor market boosted demand for the company's workforce management services.With Thursday's gain, Paycom shares moved back into positive territory for 2024. Paycom Software (PAYC) shares skyrocketed 21% on Thursday, posting the top daily performance in the S&P 500, after the payroll and human resources s ...

Revenue and Growth - Revenue growth rate and annual revenue retention rate declined in 2023 and remained under pressure throughout 2024[63] - Recurring revenues increased to $445.0 million for the three months ended September 30, 2024, up 11.6% from $398.7 million in the same period in 2023[65] - Total revenues for the nine months ended September 30, 2024, were $1,389.3 million, a 10.3% increase from $1,259.1 million in the same period in 2023[65] - Adjusted EBITDA for Q3 2024 was $171.3 million, compared to $165.6 million in Q3 2023[91] - Net income for Q3 2024 was $73.3 million, compared to $75.2 million in Q3 2023[91] - Earnings per share (diluted) for Q3 2024 was $1.31, compared to $1.30 in Q3 2023[94] - Non-GAAP net income per share (diluted) for Q3 2024 was $1.67, compared to $1.77 in Q3 2023[94] Client and Market Expansion - The company expanded its target client size range to include organizations with more than 10,000 employees in 2023[63] - The company's Global HCM solution and expansion into international markets are expected to attract larger companies with global presence[63] - The company plans to open additional sales offices to further expand market presence[61] - The company's revenue is primarily generated through its sales force and client relations representatives[61] Financial Operations and Cash Flow - The company collects funds from clients in advance, typically disbursed within 1 to 30 days, with some funds held for up to 120 days[63] - The company's average funds held for clients balance and interest earned are expected to increase with new applications and client base expansion[63] - The average daily balance of funds held for clients was $2.4 billion for the nine months ended September 30, 2024, up from $2.2 billion in the same period in 2023[65] - Interest earned on corporate funds decreased to $4.2 million for the three months ended September 30, 2024, compared to $6.5 million in the same period in 2023[75] - Net cash provided by operating activities increased by 7% to $373.513 million for the nine months ended September 30, 2024, compared to $350.569 million in the same period in 2023[83] - Cash provided by investing activities increased by 125% to $33.538 million for the nine months ended September 30, 2024, compared to a negative $135.642 million in the same period in 2023[83] - Cash used in financing activities increased by 149% to $1.089 billion for the nine months ended September 30, 2024, compared to $437.693 million in the same period in 2023[83] - Corporate cash and cash equivalents as of September 30, 2024, totaled $325.8 million[96] - Funds held for clients cash and cash equivalents as of September 30, 2024, totaled $1.4 billion[96] Expenses and Costs - Operating expenses increased by $15.2 million for the three months ended September 30, 2024, primarily due to an $8.9 million increase in employee-related expenses[66] - Research and development expenses increased by $11.2 million for the three months ended September 30, 2024, driven by higher employee-related costs[68] - Capitalized portion of research and development costs increased by 26% to $33.4 million for the three months ended September 30, 2024, compared to $26.6 million in 2023[69] - General and administrative expenses decreased by $1.2 million for the three months ended September 30, 2024, due to a reduction in employee-related expenses[71] - Non-cash stock-based compensation expense decreased by 27% to $24.2 million for the three months ended September 30, 2024, compared to $33.2 million in 2023[72] - Depreciation and amortization expense increased due to the development of additional technology and the corporate headquarters expansion placed into service in April 2024[73] - Interest expense increased for the three and nine months ended September 30, 2024, due to the timing of the corporate headquarters expansion project[74] - Interest expense for Q3 2024 was $789,000, compared to $222,000 in Q3 2023[91] - Depreciation and amortization for Q3 2024 was $38.1 million, compared to $28.9 million in Q3 2023[91] - Non-cash stock-based compensation expense for Q3 2024 was $24.2 million, compared to $33.2 million in Q3 2023[91] Tax and Financial Commitments - The effective income tax rate for the nine months ended September 30, 2024, was 21.9%, down from 28.1% in the same period in 2023, primarily due to a tax benefit related to the forfeiture of the 2020 CEO Performance Award[76] - The company maintains a $1.0 billion senior secured revolving credit facility, with no outstanding borrowings as of September 30, 2024[77] - The stock repurchase plan was increased to $1.5 billion, with $1.49 billion available for repurchases as of September 30, 2024[78] - Quarterly cash dividends of $0.375 per share were declared, with total cash dividends paid amounting to $20.956 million for the quarter ended September 30, 2024[79][80] - The company repurchased 892,669 shares of common stock at an average cost of $153.70 per share during the nine months ended September 30, 2024[78] - The company committed to annual payments escalating from $4.0 million in 2021 to $6.1 million in 2035 for the naming rights to the Oklahoma City arena[82] Technology and Product Impact - The company's revenue is seasonal, with higher recurring revenues in the first and fourth quarters due to payroll tax filings and unscheduled payroll runs[63] - The company's Beti technology has reduced billable corrections and unscheduled payroll runs, impacting revenue[63] - The company's payroll application is the foundation of its solution, with all clients required to utilize it to access other applications[63]

Paycom's Q3 results and forward guidance suddenly have investors feeling very bullish again.Paycom Software (PAYC 23.62%) stock is surging in Thursday's trading following the company's recently published third-quarter results. The company's share price was up 24.7% as of 2:15 p.m. ET.Paycom published its Q3 results after the market closed yesterday, and sales and earnings for the period beat Wall Street's targets. In addition to the Q3 beats, the company also issued strong guidance for the current quarter.P ...

Paycom's automated solutions are beloved by its customers, and the results may be starting to show.Shares of human capital management (HCM) software provider Paycom Software (PAYC 24.78%) are up 28% this week as of 1:40 p.m. ET Thursday, according to data provided by S&P Global Market Intelligence.Paycom reported third-quarter earnings, beating analysts' expectations, growing revenue by 11% and offering improved guidance for the remainder of 2024. Most importantly, however, Paycom hinted that its ongoing re ...

Paycom Software, Inc. (PAYC) reported better-than-expected third-quarter 2024 results. The online payroll and human resource technology provider reported non-GAAP earnings of $1.67 per share for the third quarter, beating the Zacks Consensus Estimate of $1.62.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.However, the bottom line declined 5.6% year over year as the benefits of higher revenues and lower share count were more than offset by increased operating expenses, interest expe ...

Paycom Software, Inc. (NYSE:PAYC) Q3 2024 Results Conference Call October 30, 2024 5:00 PM ET Company Participants James Samford - Head of IR Chad Richison - President & CEO Craig Boelte - CFO Conference Call Participants Raimo Lenschow - Barclays Samad Samana - Jefferies Mark Marcon - Baird Brian Schwartz - Oppenheimer Joshua Riley - Needham Steve Enders - Citi Kevin McVeigh - UBS Devin Au - KeyBanc Arvind Ramnani - Piper Sandler Bhavin Shah - Deutsche Bank Kyle Aberasturi - BMO Operator Good afternoon. My ...

Paycom Software (PAYC) came out with quarterly earnings of $1.67 per share, beating the Zacks Consensus Estimate of $1.62 per share. This compares to earnings of $1.77 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 3.09%. A quarter ago, it was expected that this maker of human-resources and payroll software would post earnings of $1.58 per share when it actually produced earnings of $1.62, delivering a surprise of 2.53%. Ove ...

Exhibit 99.1 Paycom Software, Inc. Reports Third Quarter 2024 Results Third Quarter Revenues of $452 million, up 11% from the comparable prior year period Third Quarter GAAP Net Income of $73 million, representing 16% of total revenues, or $1.31 per diluted share Third Quarter Non-GAAP Net Income of $93 million, or $1.67 per diluted share Third Quarter Adjusted EBITDA of $171 million, representing 38% of total revenues OKLAHOMA CITY – October 30, 2024 – (BUSINESS WIRE) – Paycom Software, Inc. ("Paycom," "we ...

Core Viewpoint - Paycom Software (PAYC) is expected to report third-quarter 2024 results with anticipated revenues between $444 million and $449 million, reflecting a year-over-year growth of approximately 10% from $406.3 million in the same quarter last year [1][2] Financial Performance Expectations - The Zacks Consensus Estimate for PAYC's revenues is $446.9 million, while the consensus for earnings per share (EPS) is $1.62, indicating a decline of 8.5% year-over-year [1] - Adjusted EBITDA is projected to be in the range of $155 million to $159 million, suggesting an adjusted EBITDA margin of around 35% at the midpoint [1] - PAYC has consistently beaten the Zacks Consensus Estimate in the past four quarters, with an average surprise of 6.7% [1] Growth Drivers - The anticipated performance is likely supported by an expanding client base due to product innovations and a high-margin recurring revenue model, with recurring revenues estimated at $437.3 million, indicating a year-over-year growth of 9.7% [2] - Investments in artificial intelligence (AI), automation, and international expansion are expected to enhance sales growth [2][3] Challenges - The company's performance may be negatively impacted by headcount reductions among its clients due to macroeconomic uncertainties, leading to lower transaction volumes and reduced spending on payroll and human capital management services [3] - The uncertain macroeconomic environment and geopolitical issues are contributing to these challenges [3] Earnings ESP and Zacks Rank - Currently, PAYC has an Earnings ESP of -0.35% and a Zacks Rank of 4 (Sell), indicating lower odds of an earnings beat compared to other stocks [4]