Second Quarter Revenues of $438 million, up 9% from the
comparable prior year period
Second Quarter GAAP Net Income of $68 million, representing 16%
of total revenues, or $1.20 per diluted share
Second Quarter Non-GAAP Net Income of $92 million, or $1.62 per
diluted share
Second Quarter Adjusted EBITDA of $160 million, representing 36%
of total revenues
Paycom Software, Inc. (“Paycom,” “we” and “our”) (NYSE: PAYC), a
leading provider of comprehensive, cloud-based human capital
management software, today announced its financial results for the
quarter ended June 30, 2024.
“During the second quarter, our outside sales team delivered
solid performance with robust new logo adds, as we continue to sell
the most automated solution on the market,” said Paycom founder,
CEO and chairman, Chad Richison. “We continue to extend our product
lead as we eclipse the industry with even greater automation.”
Financial Highlights for the Second
Quarter of 2024
Total Revenues of $437.5 million represented a 9.1%
increase compared to total revenues of $401.1 million in the same
period last year. Recurring revenues of $430.4 million increased
9.1% from the comparable prior year period and constituted 98.4% of
total revenues.
GAAP Net Income was $68.0 million, or $1.20 per diluted
share, compared to GAAP net income of $64.5 million, or $1.11 per
diluted share, in the same period last year.
Non-GAAP Net Income1 was $91.8 million, or $1.62 per
diluted share, compared to $94.3 million, or $1.62 per diluted
share, in the same period last year.
Adjusted EBITDA1 was $159.7 million, compared to $156.6
million in the same period last year.
Cash and Cash Equivalents were $346.5 million as of June
30, 2024, compared to $294.0 million as of December 31, 2023.
During the quarter ended June 30, 2024, Paycom paid $21.2 million
in cash dividends and repurchased 573,743 shares of common stock
for $90.1 million, in the aggregate.
Total Debt was $0 as of June 30, 2024 and December 31,
2023.
1Adjusted EBITDA, non-GAAP net income and non-GAAP net
income per diluted share are non-GAAP financial measures. Please
see the discussion below under the heading “Use of Non-GAAP
Financial Information” and the reconciliations at the end of this
release for additional information concerning these and other
non-GAAP financial measures.
Financial Outlook
Paycom provides the following expected financial guidance for
the quarter ending September 30, 2024 and the year ending December
31, 2024.
Quarter Ending September 30, 2024:
Total Revenues in the range of $444
million to $449 million.
Adjusted EBITDA in the range of $155
million to $159 million.
Year Ending December 31, 2024:
Total Revenues in the range of $1.860
billion to $1.875 billion.
Adjusted EBITDA in the range of $727
million to $737 million.
We have not reconciled the forward-looking adjusted EBITDA
ranges presented above and discussed on the teleconference call to
net income, nor the forward-looking adjusted EBITDA margins and
forward-looking non-GAAP effective income tax rate discussed on the
teleconference call to comparable GAAP measures, because applicable
information for future periods, on which these reconciliations
would be based, is not readily available due to uncertainty
regarding, and the potential variability of, depreciation and
amortization, interest expense, taxes, non-cash stock-based
compensation expense and other items. Accordingly, reconciliations
of the forward-looking adjusted EBITDA ranges to net income, the
forward-looking adjusted EBITDA margins to net income margin, and
the forward-looking non-GAAP effective income tax rate to the GAAP
effective income tax rate are not available at this time without
unreasonable effort.
Use of Non-GAAP Financial
Information
To supplement our financial information presented in accordance
with generally accepted accounting principles in the United States
(“GAAP”), we present certain non-GAAP financial measures in this
press release and on the related teleconference call, including
adjusted EBITDA, non-GAAP net income, adjusted gross profit,
adjusted gross margin, adjusted sales and marketing expenses,
adjusted total administrative expenses, adjusted research and
development expenses, adjusted total research and development
costs, adjusted EBITDA margin and non-GAAP effective income tax
rate. Management uses these non-GAAP financial measures as
supplemental measures to review and assess the performance of our
core business operations and for planning purposes. We define (i)
adjusted EBITDA as net income plus interest expense, taxes,
depreciation and amortization, non-cash stock-based compensation
expense, certain transaction expenses that are not core to our
operations (if any) and any loss on the extinguishment of debt,
(ii) non-GAAP net income as net income plus non-cash stock-based
compensation expense, certain transaction expenses that are not
core to our operations (if any) and any loss on the extinguishment
of debt, all of which are adjusted for the effect of income taxes,
(iii) adjusted gross profit as gross profit plus applicable
non-cash stock-based compensation expense, (iv) adjusted gross
margin as gross profit plus applicable non-cash stock-based
compensation expense, divided by total revenues, (v) each adjusted
expense item as the GAAP expense amount less applicable non-cash
stock-based compensation expense, (vi) adjusted total research and
development costs as total research and development costs
(including the capitalized portion) less applicable non-cash
stock-based compensation (including the capitalized portion), (vii)
adjusted EBITDA margin as adjusted EBITDA (calculated as described
in clause (i)) divided by total revenues, and (viii) non-GAAP
effective income tax rate as the provision for income taxes plus
the income tax effect on non-GAAP adjustments divided by non-GAAP
net income (calculated as described in clause (ii)) plus the
provision for income taxes and the income tax effect on non-GAAP
adjustments. The non-GAAP financial measures presented in this
press release and discussed on the related teleconference call
provide investors with greater transparency to the information used
by management in its financial and operational decision-making. We
believe these metrics are useful to investors because they
facilitate comparisons of our core business operations across
periods on a consistent basis, as well as comparisons with the
results of peer companies, many of which use similar non-GAAP
financial measures to supplement results under GAAP. In addition,
adjusted EBITDA is a measure that provides useful information to
management about the amount of cash available for reinvestment in
our business, paying dividends, repurchasing common stock and other
purposes. Management believes that the non-GAAP measures presented
in this press release and discussed on the related teleconference
call, when viewed in combination with our results prepared in
accordance with GAAP, provide a more complete understanding of the
factors and trends affecting our business and performance.
The non-GAAP financial measures presented in this press release
and discussed on the related teleconference call are not measures
of financial performance under GAAP and should not be considered a
substitute for net income, gross profit, gross margin, research and
development expenses, sales and marketing expenses, administrative
expenses, total research and development costs and GAAP effective
income tax rate. Non-GAAP financial measures have limitations as
analytical tools, and when assessing our operating performance, you
should not consider these non-GAAP financial measures in isolation,
or as a substitute for the consolidated statements of income data
prepared in accordance with GAAP. The non-GAAP financial measures
that we present may not be comparable to similarly titled measures
of other companies, and other companies may not calculate such
measures in the same manner as we do.
Conference Call Details
In conjunction with this announcement, Paycom will host a
conference call today, July 31, 2024, at 5:00 p.m. Eastern time to
discuss its financial results. To access this call, dial (833)
470-1428 (domestic) or (404) 975-4839 (international) and provide
399008 as the access code. A live webcast as well as the replay of
the conference call will be available on the Investor Relations
page of Paycom’s website at investors.paycom.com.
About Paycom
For 25 years, Paycom Software, Inc. (NYSE: PAYC) has simplified
businesses and the lives of their employees through easy-to-use HR
and payroll technology to empower transparency through direct
access to their data. And thanks to its industry-first solution,
Beti®, employees now do their own payroll and are guided to find
and fix costly errors before payroll submission. From onboarding
and benefits enrollment to talent management and more, Paycom’s
software streamlines processes, drives efficiencies and gives
employees power over their own HR information, all in a single app.
Recognized nationally for its technology and workplace culture,
Paycom can now serve businesses of all sizes in the U.S. and
internationally.
Forward-Looking
Statements
Certain statements in this press release are, and certain
statements on the related teleconference call may be,
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements are any statements that refer to Paycom’s estimated or
anticipated results, other non-historical facts or future events
and include, but are not limited to, statements regarding our
business strategy; anticipated future operating results and
operating expenses, cash flows, capital resources, dividends and
liquidity; competition; trends, opportunities and risks affecting
our business, industry and financial results; future expansion or
growth plans and potential for future growth, including
internationally; our ability to attract new clients to purchase our
solution; our ability to retain clients and induce them to purchase
additional applications; our ability to accurately forecast future
revenues and appropriately plan our expenses; market acceptance of
our solution and applications; our expectations regarding future
revenues generated by certain applications; the return on
investment for users of our solution; our ability to attract and
retain qualified employees and key personnel; future regulatory,
judicial and legislative changes; how certain factors affecting our
performance correlate to improvement or deterioration in the labor
market; our plan to open additional sales offices and our ability
to effectively execute such plan; the sufficiency of our existing
cash and cash equivalents to meet our working capital and capital
expenditure needs over the next 12 months; our plans regarding our
capital expenditures and investment activity as our business grows,
including with respect to research and development and the
expansion of our facilities; our plans to pay cash dividends; our
plans to repurchase shares of our common stock through a stock
repurchase plan; and our expected income tax rate for future
periods. In addition, forward-looking statements also consist of
statements involving trend analyses and statements including such
words as “anticipate,” “believe,” “could,” “estimate,” “expect,”
“intend,” “may,” “might,” “plan,” “potential,” “should,” “will,”
“would,” and similar expressions or the negative of such terms or
other comparable terminology. These forward-looking statements are
based only on information currently available to us, speak only as
of the date hereof and are subject to business and economic risks.
As such, our actual results could differ materially from those set
forth in the forward-looking statements as a result of the factors
discussed in our filings with the Securities and Exchange
Commission, including but not limited to those discussed in our
most recent Annual Report on Form 10-K. We do not undertake any
obligation to update or revise the forward-looking statements to
reflect events that occur or circumstances that exist after the
date on which such statements were made, except to the extent
required by law.
Paycom Software, Inc.
Unaudited Consolidated Balance
Sheets
(in thousands, except per share
amounts)
June 30, 2024
December 31, 2023
Assets
Current assets:
Cash and cash equivalents
$
346,456
$
294,025
Accounts receivable
20,034
16,442
Prepaid expenses
46,529
37,613
Inventory
1,415
1,383
Income tax receivable
—
18,391
Deferred contract costs
128,728
118,206
Current assets before funds held for
clients
543,162
486,060
Funds held for clients
2,303,159
2,327,366
Total current assets
2,846,321
2,813,426
Property and equipment, net
531,884
498,197
Intangible assets, net
48,159
50,112
Goodwill
51,889
51,889
Long-term deferred contract costs
727,956
680,272
Other assets
106,535
103,643
Total assets
$
4,312,744
$
4,197,539
Liabilities and Stockholders’
Equity
Current liabilities:
Accounts payable
$
14,997
$
13,875
Income tax payable
10,281
—
Accrued commissions and bonuses
22,227
30,492
Accrued payroll and vacation
60,533
56,086
Deferred revenue
31,432
22,812
Accrued expenses and other current
liabilities
84,215
83,302
Current liabilities before client funds
obligation
223,685
206,567
Client funds obligation
2,303,198
2,328,076
Total current liabilities
2,526,883
2,534,643
Deferred income tax liabilities, net
136,213
143,750
Long-term deferred revenue
110,928
107,657
Other long-term liabilities
112,189
108,453
Total long-term liabilities
359,330
359,860
Total liabilities
2,886,213
2,894,503
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.01 par value (100,000
shares authorized, 62,887 and 62,675 shares issued at June 30, 2024
and December 31, 2023, respectively; 56,151 and 56,528 shares
outstanding at June 30, 2024 and December 31, 2023,
respectively)
629
627
Additional paid-in capital
667,197
724,493
Retained earnings
1,743,608
1,469,981
Accumulated other comprehensive earnings
(loss)
(305
)
(1,039
)
Treasury stock, at cost (6,736 and 6,147
shares at June 30, 2024 and December 31, 2023, respectively)
(984,598
)
(891,026
)
Total stockholders’ equity
1,426,531
1,303,036
Total liabilities and stockholders’
equity
$
4,312,744
$
4,197,539
Paycom Software, Inc.
Unaudited Consolidated
Statements of Comprehensive Income
(in thousands, except per share
amounts)
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
Revenues
Recurring
$
430,400
$
394,522
$
922,296
$
838,943
Implementation and other
7,112
6,617
15,097
13,833
Total revenues
437,512
401,139
937,393
852,776
Cost of revenues
Operating expenses
67,451
54,617
131,121
107,702
Depreciation and amortization
16,433
12,811
31,394
24,958
Total cost of revenues
83,884
67,428
162,515
132,660
Administrative expenses
Sales and marketing
106,864
106,435
222,388
210,009
Research and development
62,371
49,118
112,880
91,787
General and administrative
70,072
75,965
21,968
141,570
Depreciation and amortization
19,181
14,927
36,688
29,052
Total administrative expenses
258,488
246,445
393,924
472,418
Total operating expenses
342,372
313,873
556,439
605,078
Operating income
95,140
87,266
380,954
247,698
Interest expense
(782
)
(602
)
(1,564
)
(1,439
)
Other income (expense), net
4,787
6,183
9,796
12,187
Income before income taxes
99,145
92,847
389,186
258,446
Provision for income taxes
31,175
28,331
74,029
74,634
Net income
$
67,970
$
64,516
$
315,157
$
183,812
Earnings per share, basic
$
1.20
$
1.11
$
5.58
$
3.17
Earnings per share, diluted
$
1.20
$
1.11
$
5.57
$
3.17
Weighted average shares
outstanding:
Basic
56,451
57,920
56,499
57,895
Diluted
56,771
58,033
56,548
58,050
Comprehensive earnings:
Net income
$
67,970
$
64,516
$
315,157
$
183,812
Unrealized net gains on available-for-sale
securities
318
(235
)
1,155
815
Tax effect
(128
)
95
(421
)
(105
)
Other comprehensive income, net of tax
190
(140
)
734
710
Comprehensive earnings:
$
68,160
$
64,376
$
315,891
$
184,522
Paycom Software, Inc.
Unaudited Consolidated
Statements of Cash Flows
(in thousands)
Six Months Ended June
30,
2024
2023
Cash flows from operating
activities
Net income
$
315,157
$
183,812
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
68,082
54,010
Accretion of discount on
available-for-sale securities
(108
)
(253
)
Non-cash marketing expense
798
839
Loss (Gain) on disposition of property and
equipment
12
(21
)
Amortization of debt issuance costs
552
620
Stock-based compensation expense
(69,670
)
63,185
Deferred income taxes, net
(7,798
)
1,706
Other
(161
)
111
Changes in operating assets and
liabilities:
Accounts receivable
(3,592
)
6,650
Prepaid expenses
(8,345
)
(10,597
)
Inventory
431
336
Other assets
(3,445
)
(9,057
)
Deferred contract costs
(55,198
)
(62,489
)
Accounts payable
91
(10,277
)
Income taxes, net
28,672
3,645
Accrued commissions and bonuses
(8,265
)
(6,560
)
Accrued payroll and vacation
4,197
4,954
Deferred revenue
11,891
6,817
Accrued expenses and other current
liabilities
7,431
24,560
Net cash provided by operating
activities
280,732
251,991
Cash flows from investing
activities
Purchases of investments from funds held
for clients
—
(25,000
)
Proceeds from investments from funds held
for clients
165,000
25,000
Purchases of property and equipment
(93,335
)
(83,422
)
Proceeds from sale of property and
equipment
13
44
Net cash provided by (used in) investing
activities
71,678
(83,378
)
Cash flows from financing
activities
Repurchases of common stock
(80,761
)
—
Withholding taxes paid related to net
share settlements
(12,410
)
(11,067
)
Dividends paid
(42,400
)
(21,731
)
Net change in client funds obligation
(24,878
)
(201,552
)
Net cash (used in) financing
activities
(160,449
)
(234,350
)
Increase (decrease) in cash, cash
equivalents, restricted cash and restricted cash equivalents
191,961
(65,737
)
Cash, cash equivalents, restricted cash
and restricted cash equivalents
Cash, cash equivalents, restricted cash
and restricted cash equivalents, beginning of period
2,422,760
2,409,095
Cash, cash equivalents, restricted cash
and restricted cash equivalents, end of period
$
2,614,721
$
2,343,358
Paycom Software, Inc.
Unaudited Consolidated
Statements of Cash Flows
(in thousands)
Six Months Ended June
30,
2024
2023
Reconciliation of cash, cash
equivalents, restricted cash and restricted cash
equivalents
Cash and cash equivalents
$
346,456
$
536,545
Restricted cash included in funds held for
clients
2,268,265
1,806,813
Total cash, cash equivalents, restricted
cash and restricted cash equivalents, end of period
$
2,614,721
$
2,343,358
Supplemental disclosures of cash flow
information:
Non-cash investing and financing
activities:
Purchases of property and equipment,
accrued but not paid
$
8,507
$
11,968
Stock-based compensation for capitalized
software
$
8,797
$
7,752
Right of use assets obtained in exchange
for operating lease liabilities
$
11,933
$
16,341
Paycom Software, Inc.
Unaudited Reconciliations of
GAAP to Non-GAAP Financial Measures
(in thousands, except per share
amounts)
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
Net income to adjusted EBITDA:
Net income
$
67,970
$
64,516
$
315,157
$
183,812
Interest expense
782
602
1,564
1,439
Provision for income taxes
31,175
28,331
74,029
74,634
Depreciation and amortization
35,614
27,738
68,082
54,010
EBITDA
135,541
121,187
458,832
313,895
Non-cash stock-based compensation
expense
24,120
35,366
(69,670
)
63,185
Adjusted EBITDA
$
159,661
$
156,553
$
389,162
$
377,080
Net income margin
15.5
%
16.1
%
33.6
%
21.6
%
Adjusted EBITDA margin
36.5
%
39.0
%
41.5
%
44.2
%
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
Net income to non-GAAP net
income:
Net income
$
67,970
$
64,516
$
315,157
$
183,812
Non-cash stock-based compensation
expense
24,120
35,366
(69,670
)
63,185
Income tax effect on non-GAAP
adjustments
(255
)
(5,620
)
(7,004
)
(10,084
)
Non-GAAP net income
$
91,835
$
94,262
$
238,483
$
236,913
Weighted average shares outstanding:
Basic
56,451
57,920
56,499
57,895
Diluted
56,771
58,033
56,548
58,050
Earnings per share, basic
$
1.20
$
1.11
$
5.58
$
3.17
Earnings per share, diluted
$
1.20
$
1.11
$
5.57
$
3.17
Non-GAAP net income per share, basic
$
1.63
$
1.63
$
4.22
$
4.09
Non-GAAP net income per share, diluted
$
1.62
$
1.62
$
4.22
$
4.08
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
Earnings per share to non-GAAP net
income per share, basic:
Earnings per share, basic
$
1.20
$
1.11
$
5.58
$
3.17
Non-cash stock-based compensation
expense
0.43
0.61
(1.23
)
1.09
Income tax effect on non-GAAP
adjustments
—
(0.09
)
(0.13
)
(0.17
)
Non-GAAP net income per share, basic
$
1.63
$
1.63
$
4.22
$
4.09
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
Earnings per share to non-GAAP net
income per share, diluted:
Earnings per share, diluted
$
1.20
$
1.11
$
5.57
$
3.17
Non-cash stock-based compensation
expense
0.42
0.61
(1.23
)
1.09
Income tax effect on non-GAAP
adjustments
—
(0.10
)
(0.12
)
(0.18
)
Non-GAAP net income per share, diluted
$
1.62
$
1.62
$
4.22
$
4.08
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
Adjusted gross profit:
Total revenues
$
437,512
$
401,139
$
937,393
$
852,776
Less: Total cost of revenues
(83,884
)
(67,428
)
(162,515
)
(132,660
)
Total gross profit
353,628
333,711
774,878
720,116
Plus: Non-cash stock-based compensation
expense
4,163
3,353
7,154
5,738
Total adjusted gross profit
$
357,791
$
337,064
$
782,032
$
725,854
Gross margin
80.8
%
83.2
%
82.7
%
84.4
%
Adjusted gross margin
81.8
%
84.0
%
83.4
%
85.1
%
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
Adjusted sales and marketing
expenses:
Sales and marketing expenses
$
106,864
$
106,435
$
222,388
$
210,009
Less: Non-cash stock-based compensation
expense
(4,802
)
(6,040
)
(10,296
)
(11,516
)
Adjusted sales and marketing expenses
$
102,062
$
100,395
$
212,092
$
198,493
Total revenues
$
437,512
$
401,139
$
937,393
$
852,776
Sales and marketing expenses as a % of
revenues
24.4
%
26.5
%
23.7
%
24.6
%
Adjusted sales and marketing expenses as a
% of revenues
23.3
%
25.0
%
22.6
%
23.3
%
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
Adjusted total administrative
expenses:
Total administrative expenses
$
258,488
$
246,445
$
393,924
$
472,418
Less: Non-cash stock-based compensation
expense
(19,957
)
(32,013
)
76,824
(57,447
)
Adjusted total administrative expenses
$
238,531
$
214,432
$
470,748
$
414,971
Total revenues
$
437,512
$
401,139
$
937,393
$
852,776
Total administrative expenses as a % of
revenues
59.1
%
61.4
%
42.0
%
55.4
%
Adjusted total administrative expenses as
a % of revenues
54.5
%
53.5
%
50.2
%
48.7
%
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
Adjusted research and development
expenses:
Research and development expenses
$
62,371
$
49,118
$
112,880
$
91,787
Less: Non-cash stock-based compensation
expense
(7,775
)
(6,639
)
(13,145
)
(11,897
)
Adjusted research and development
expenses
$
54,596
$
42,479
$
99,735
$
79,890
Total revenues
$
437,512
$
401,139
$
937,393
$
852,776
Research and development expenses as a %
of revenues
14.3
%
12.2
%
12.0
%
10.8
%
Adjusted research and development expenses
as a % of revenues
12.5
%
10.6
%
10.6
%
9.4
%
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
Total research and development
costs:
Capitalized research and development
costs
$
31,186
$
22,878
$
61,032
$
44,231
Research and development expenses
62,371
49,118
112,880
91,787
Total research and development costs
$
93,557
$
71,996
$
173,912
$
136,018
Total revenues
$
437,512
$
401,139
$
937,393
$
852,776
Total research and development costs as a
% of revenues
21.4
%
17.9
%
18.6
%
16.0
%
Adjusted total research and development
costs:
Total research and development costs
$
93,557
$
71,996
$
173,912
$
136,018
Less: Capitalized non-cash stock-based
compensation
(5,208
)
(4,155
)
(8,797
)
(7,752
)
Less: Non-cash stock-based compensation
expense
(7,775
)
(6,639
)
(13,145
)
(11,897
)
Adjusted total research and development
costs
$
80,574
$
61,202
$
151,970
$
116,369
Total revenues
$
437,512
$
401,139
$
937,393
$
852,776
Adjusted total research and development
costs as a % of revenues
18.4
%
15.3
%
16.2
%
13.6
%
Paycom Software, Inc.
Unaudited Components of
Non-Cash Stock-Based Compensation Expense
(in thousands)
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
Non-cash stock-based compensation
expense:
Operating expenses
$
4,163
$
3,353
$
7,154
$
5,738
Sales and marketing
4,802
6,040
10,296
11,516
Research and development
7,775
6,639
13,145
11,897
General and administrative
7,380
19,334
(100,265
)
34,034
Total non-cash stock-based compensation
expense
$
24,120
$
35,366
$
(69,670
)
$
63,185
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240731559443/en/
Paycom Software, Inc. Investor Relations Contact: James Samford,
800-580-4505 investors@paycom.com
Grafico Azioni Paycom Software (NYSE:PAYC)
Storico
Da Dic 2024 a Gen 2025
Grafico Azioni Paycom Software (NYSE:PAYC)
Storico
Da Gen 2024 a Gen 2025
