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Image source: The Motley Fool. Wednesday, Aug. 5, 2026 at 5:00 p.m. ET Head of Investor Relations - James Samford Founder and CEO - Chad Richison President - Terrell Hadlock Operator: Good afternoon. My name is Hillary and I will be your conference operator today. At this time, I would like to welcome everyone to Paycom's Second Quarter 2026 Financial Results Conference Call. [Operator Instructions] I will now turn the call over to James Samford, Head of Investor Relations. You may begin. James Samford: Thank you and welcome to Paycom's earnings conference call for the second quarter of 2026. Certain statements made on this call that are not historical facts, including those related to our future plans, objectives and expected performance, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent our outlook only as of the date of this conference call. While we believe any forward-looking statements made on this call are reasonable, actual results may differ materially because the statements are based on our current expectations and subject to risks and uncertainties. These risks and uncertainties are discussed in our filings with the SEC, including our most recent annual report on Form 10-K. You should refer to and consider these factors when relying on such forward-looking information. Any forward-looking statement made speaks only as of the date on which it is made and we do not undertake and expressly disclaim any obligation to update or alter our forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. Also during today's call, we will refer to certain non-GAAP financial measures, including adjusted EBITDA, non-GAAP net income and certain adjusted expenses. We use these non-GAAP financial measures to review and assess our performance and for planning purposes. A reconciliation schedule showing GAAP versus non-GAAP results is included in the press release that we issued after the close of the market today and is available on our website at investors.paycom.com. I will now turn the call over to Chad Richison, Paycom's Founder and CEO. Chad? Chad Richison: Thanks, James and thank you to everyone joining our call today. I'll briefly comment on some of the new product launches and achievements so far this year. Then I will pass the call over to our President, Shane Hadlock and then Bob will review our second quarter results and full year guidance. We will then take questions. Let's get started. We delivered another solid quarter with results coming in ahead of expectations. The benefit of our software's full solution automation, coupled with world-class service, continue to drive industry-leading ROI, which is resonating in the market. With our strong first half results, we are well positioned to exceed our initial 2026 plan on both a revenue and profitability basis. Demand for automation is increasing and our platform remains the most intelligent solution in the industry. Thanks to our early focus on data integrity and consolidation, we continue to expand our automation capabilities with AI and automated decisioning to deliver even more value to our clients. Earlier this year, we announced the release of our Career and Succession Planning solution and we are seeing solid client adoption. This is another automated product that equips leaders with a solution to more easily identify and develop talent, ensuring organizations are better prepared for the future. With this product, organizations have reliable data to discover workforce talent gaps and assess talent readiness. A client of ours with over 500 employees who is already using our Performance and Paycom Learning products, added Career and Succession Planning. And for the first time, they have all key positions and successors identified. They were very pleased with how quickly they could identify leadership gaps and fill them with people who were developed to step into the roles. Clients are thrilled with this new functionality and the automation it creates for career development and succession. In July, we released our latest automated product, Asset Management. This solution enables businesses to manage their physical and digital assets, which represent one of their largest budgetary spends, ensuring those investments are deployed, tracked and recovered through our automated software. The launch of Asset Management expands our capabilities into an entirely new multibillion-dollar TAM that fits perfectly within our software ecosystem. By combining Asset Management with the automated tools already in the Paycom system, we help our clients strengthen the security of their assets, bolster compliance and reduce lost property. Not only can organizations track all of their assets across their locations but they can also identify the exact resources a position requires, which ensures a consistent deployment and retrieval of all company assets. Even though it was just released a few weeks ago, client feedback has been very strong and they are already adopting this new technology. Asset Management marks the 45th product we have developed, hosted, distributed and serviced over our nearly 28 years in business. We take great pride in our ability to consistently release industry-leading technology that generates tremendous ROI for our clients. Now I would like to turn the call over to Shane Hadlock. Prior to his role as our President, he served as our Chief Client Officer, where he was instrumental in increasing retention, driving world-class service, building strong groups of leaders and delivering tremendous automation across the organization. With that, let me turn the call over to Shane. Terrell Hadlock: Thanks, Chad. We are driving innovation across our industry. And this quarter, we released Project Arc. Project Arc was the largest system-wide release we have had in our company's history. This new release fundamentally changes the way clients and their employees experience Paycom. Clients love the new scalability and customization. This new release gives each user a unique experience, helping them quickly find the information and action items most relevant to them. Our clients say that their managers are raving about how customizable the system is, making it easier for them to do their jobs. One of our clients with a few thousand employees said that they were impressed with the new Arc release because it provides great customization and performance for their employees, managers and organization. In addition to the new customizable features, Project Arc included significant updates to enhance the performance, scalability and functionality of our software. These changes to system performance and scalability have produced an experience for our clients that is much more efficient. In fact, a client of ours with over 10,000 employees reported their system performance increased by 4x. Client feedback has been incredible and they are enjoying the benefits of this customization and improved scale, making the industry's most intelligent solution even more powerful. Our award-winning AI solution, IWant, continues to accelerate speed to value for our clients by providing them with system intelligence that automates events and tasks within the system. For many new employees and new users of our software, utilizing IWant is their first interaction of our software, making it easier than ever to use. As we roll out more AI and automation across the platform, we are driving measurable value for our clients and their employees. IWant has been a game changer for our clients and the industry. I am proud of our team and all the work we have accomplished over the course of the year to drive efficiency and client satisfaction. Across the board, we have great talent at Paycom, especially in the leadership team. We have a deep and experienced bench with institutional knowledge and a competitive mindset that sets us apart. I would like to thank our employees for their contributions to an excellent first half of 2026 and the robust results year-to-date. We are building strong momentum on a variety of new products to further automate businesses. During the quarter, our product and culture received several accolades. Paycom earned the 2026 Top Rated Award from TrustRadius, which reflects strong client satisfaction across multiple HR and payroll categories. I was also pleased to see Paycom was named to Newsweek's Greatest Workplaces in Tech, and our sales organization was included in Selling Power's 60 Best Companies to Sell For. These awards highlight our differentiated product set, client satisfaction and elite sales program. This is an exciting time to be part of Paycom. With that, let me turn the call over to Bob. Robert Foster: Thank you, Shane. Second quarter results were strong with total revenue of $531 million, up 10% over the comparable prior year period and recurring and other revenue of $505 million, up 11% year-over-year. Revenue strength in the quarter was broad-based, reflecting consistent product demand conditions and increased client satisfaction. Our focus on process automation and leveraging our own technology is driving increased productivity across the organization that is fundamentally strengthening our business. Our efforts over the last several quarters are driving sustainable margin expansion and earnings growth. GAAP net income increased 20% in the second quarter to $107 million or $2.34 per diluted share based on an average of 46 million shares outstanding. Non-GAAP net income for the second quarter was $128 million or $2.78 per diluted share. Adjusted EBITDA in the second quarter came in at $235 million, representing a 320 basis point year-over-year margin expansion to 44.2%. Based on the strength of our results in the first half, we are well positioned to deliver industry-leading EBITDA margins, record free cash flow and accelerated earnings per share growth in 2026. We continue to identify what we view as a valuation disconnect in the market during the second quarter and opportunistically repurchased approximately 2.6 million shares of common stock or approximately 6% of our shares outstanding for a total of $346 million. Over the first 6 months of the year, we reduced shares outstanding by 20% by repurchasing nearly 11 million shares of common stock, returning approximately $1.4 billion to stockholders. We ended the second quarter with approximately 44 million shares outstanding and $1.66 billion remaining on our buyback authorization. We also paid approximately $18 million in cash dividends during the second quarter. On August 3, the Board approved our next quarterly dividend of $0.375 per share payable in early September. Turning to the balance sheet. We continue to enjoy a very strong liquidity position. We ended the quarter with cash and cash equivalents of $198 million and have drawn down a total of $900 million on our $2.1 billion revolving credit facility to support our year-to-date stock repurchases. The average daily balance of funds held for clients was approximately $2.9 billion in the second quarter of 2026, up 9% over the prior year period. Now let me turn to guidance for 2026. Based on the strength of our first half results and more visibility heading into the second half, we can confidently increase our revenue and adjusted EBITDA guidance ranges. We expect total revenues to be between $2.197 billion and $2.212 billion or between 7% and 8% year-over-year growth. We now expect full year recurring and other revenue to be up 8% to 9% year-over-year. Included in total revenue outlook is interest on funds held for clients of approximately $105 million, which assumes current rates hold for the remainder of the year. Finally, as we continue to benefit from the impact of our automation initiatives, full year adjusted EBITDA is now expected to be between $1.007 billion and $1.022 billion, representing a record adjusted EBITDA margin of 46% at the midpoint of the range. Our strong first half results have bolstered our conviction in our 2026 plan and in our full solution automation strategy. We are executing well across the organization. Our clients are increasingly pleased with our platform and their ROI achievement and we continue to opportunistically return value to stockholders through our capital allocation strategy. We'd like to thank our employees for their commitment to our vision and their contribution to our strong first half results. With that, let's open the line for questions. Operator? Operator: [Operator Instructions] Your first question comes from the line of Raimo Lenschow from Barclays. Raimo Lenschow: Congrats from me. It's a great quarter. And if I look through my model, Chad, it's like the biggest beat you had for a while, revenue accelerated very nicely. Was there anything special in this quarter, like one-off factors or something that drove that? Can you speak to that strength? I mean you gave some of the pointers already but I have a lot of clients kind of wondering, well, this is really, really good. So what happened here? And then I have one quick follow-up for Bob. Chad Richison: No, it was broad-based, nothing new, all from the same buckets that we've always had in the past. Raimo Lenschow: Okay. Perfect. And anything on the new products contributing already? Or is it just -- well, it seems to be almost too early for that. Chad Richison: Yes. I mean, obviously, some of the products that we produced last year are starting to contribute to that. We did release 2 significant products, I would say, in the last 3 months, one of them in the last couple of weeks. I would say their contribution to this quarter wouldn't have been meaningful but they would -- one of them would have contributed a little bit. But we do look for both of those to contribute more as we move into the future. Operator: Your next question comes from the line of Samad Samana from Jefferies. Samad Samana: Chad, you guys have always had a very strong sales distribution team. I'm curious, you've talked a lot about AI and the impact of solutions you're creating for clients. I'm curious what you guys are doing from an internal AI enablement perspective for your sales organization and how that's driving productivity and how you might think about that influencing sales office expansion or head count growth? And then I have one follow-up. Chad Richison: Yes. I don't know that I would say AI as much. Definitely AI helps us in the prospecting and identifying certain prospects and maybe what trends they had before. We are a high-touch sales organization. And so we do that high-touch sales model. I will say that over time, especially over the last couple of years, including into this year, we have allowed our clients to buy in-app. And so it does somewhat circumvent the book sales process as they can buy directly from us. Career and Succession Planning was actually a product that allowed for that. Samad Samana: Understood. And maybe just a follow-up in terms of the capital allocation, especially given kind of the very aggressive buyback in the first half of the year and I think that's paid off in spades. Should we think about capital allocation being a bit more balanced going forward? Should we think that the buyback remains the top priority? Just help us think about kind of building dry powder versus the level of buybacks we've seen in the first half of the year. Chad Richison: You bet. When you think of CapEx, first, I mean, I kind of want to frame it this way. Last year, we spent over $100 million to prepare data centers to host our own AI models. And this year alone, that spend will lead to about $100 million savings in R&D and another $30 million or more in IWant response fees that would have come from a third party. And as an added bonus, we use some of the excess capacity to improve the performance of our systems with greater processing power. So we do believe last year's investments will produce even greater value as we move into 2027. And then, Bob, you want to comment on the CapEx? Robert Foster: Yes, I do. Let me comment Samad, too, on the CapEx. It will be a little more normalized than in the past. But when we look at the results, especially as it flows down through EBITDA, I want to go ahead, that flows all the way through to free cash flow. So I want to kind of make a onetime comment on free cash flow given how the market has consistently underestimated the strength of our business model over the last few quarters. What I would tell you is that based on the strong first half results and what we have visibility into for the rest of 2026, we do expect free cash flow to exceed $650 million in 2026. And then maybe, Samad, on the CapEx, approximately 6%. And then I'll give you the tax numbers, too, for the models. GAAP tax rate is 29%, non-GAAP tax rate is 27% and stock-based comp is 3% of revenues in 2026. Operator: Your next question comes from the line of Steve Enders from Citibank. Steven Enders: Okay. Great. Actually, maybe just following up on the last point on free cash flow. I guess maybe what is maybe different now that's driving the incremental free cash flow and some better conversion rates coming from EBITDA this year? And I guess, how do we think about -- is there like a framework for maybe what that conversion rate will look like moving forward beyond '26? Maybe just following up on the last point on free cash flow. I guess I just want to get a better sense for what is driving the, I guess, improved free cash flow for this year? Like what are the levers that are coming through right now? And then I guess, how should we think about maybe a framework moving forward for free cash flow conversion rates from EBITDA or just what that trend will look like going into the future? Operator: We're just dealing with a very brief technical difficulty. [Technical Difficulty] Thank you so much for your patience. We will now continue the call. I would like to ask Steve Enders to please reask your question. Steven Enders: Yes. I guess I just want to follow up on the free cash flow commentary that you just gave. I guess want to understand, I guess, what are the levers that are really, I guess, kind of supporting the improved free cash flow outlook for this year? And then I guess, similarly, is there a framework to maybe think about EBITDA to free cash flow moving forward into future years? Robert Foster: Yes, Steve. So last year, actually, at your conference, we talked about we were conscious of the fact that EBITDA margin and free cash flow margin had to begin to get closer and closer. So that -- what was driving it this year and it is sustainable, was it was broad-based, too. It was efficiencies in how we do our processes and it was efficiencies in our labor workforce. And we'll continue to drive those efficiencies in the future. Steven Enders: Okay. That's helpful. And then on just, I guess, sales productivity rates, I know there was a big focus tail end of last year to retrain the sales force. Just I guess, where are we at in terms of sales productivity trends and the impact that retraining is having? And would you say we're kind of back to typical levels at this point? Or just how are you kind of thinking about the incremental improvement that can come from the sales productivity? Chad Richison: Sure. With an enhanced system, it did require somewhat of an enhanced sales process just to make sure that our clients are able to achieve the full ROI that's available to them and we want to make sure we're presenting that to them on first call. And so we have -- sales has been doing great. As a reminder, we have many reps still going through training. And also, as a reminder, we expanded our teams of 8 to teams of 10. So you have 100 of our new sales reps. Over 100 of the new sales reps are also additional headcount for sales. Operator: Your next question comes from the line of Raimo Lenschow from Barclays. Raimo Lenschow: I think I asked my question already but the follow-up question I wanted to have for Bob was, if you think about the -- your rate assumptions for the year, like obviously, there's a debate around what's going to happen to the rates. Like what's driving your thinking about like a stable rate, like using the current rates for the year there? Robert Foster: Sure, Raimo. We -- in our assumptions that there would not be any kind of rate increase or cut through the rest of the year. Even if there were, it would have a minimal impact on this year. Operator: Your next question comes from the line of Jason Celino from KeyBanc Capital Markets. Jason Celino: Great. Maybe just following up on Enders' last question around sales productivity. With the acceleration that we're seeing in recurring, how much would you credit the performance in second quarter being from the better training from last year and the expanded headcount? Chad Richison: Bookings came in as expected. We have 2 categories of book sales. One is sales to new prospects and we also have sales to current clients. As I kind of mentioned earlier at the beginning of the call, over the last couple of years, we've implemented more in-app purchase capabilities and that somewhat skips the book sales process. But bookings have come in as expected and we would expect as we add more and more reps to the field. And as they grow those pipelines, we would expect that the additional rep headcount would be accretive to future book sales. Jason Celino: Great. And then maybe just a quick one for Bob. When we think about the second half, the recurring growth profile, anything we should think about in terms of seasonality in Q3 or Q4? Robert Foster: No, there's -- this is my favorite question. Thanks, Jason. The calendars -- we -- the seasonality, you have probably one more Wednesday maybe in the third quarter and then you have a little bit of tough comp in the fourth quarter. But as you know, we look at that and smooth that out over the 2 quarters, so we look at it 6 months. So... Operator: Your next question comes from the line of Mark Marcon from Baird. Mark Marcon: Congratulations on the strong results. I had a couple of questions. One, Chad and Shane, I was just wondering, how would you describe the current pipeline? I went to SHRM, I've gone to a couple of other smaller conferences and -- where you appeared and your booth was just packed. And it seems like there's a lot of interest in the automation story. And so I'm wondering what's the shape of the pipeline now? Your revenue projections assume a little bit of decel relative to the first half. And I know you're trying to be conservative but it seems like you've got a lot of really good momentum right now. So I was just wondering if you could talk about that and potentially also along those lines, what you would expect from the new products in terms of what they can add? And then I've got a follow-up just on the financials. Chad Richison: Yes, sure. Pipelines remain very strong. In a perfect world, your pipeline turns into backlog of clients ready to implement. And so that's what we look for. But pipelines remain strong and they'll continue to build as more and more reps enter their territory. As far as product contributions into the future, we've done a lot of development in the last year and we've got a lot more that will be coming out in the next year. The one thing that hosting our own models has done has really allowed us to move very quickly in dev. It's also saved us on token expense, which we do have token expense but we have a lot less of it now that we run our own models internally. And it's also allowed us to deploy our AI engine like IWant, if you will. And I think someone would be hard-pressed to find a client of ours that hasn't used IWant. And so I think as you look into the future, we'll continue to be adding products that add value to the client. And then those, of course, will be hosted by us. We've had 45 products now that we've developed, released, hosted, distributed and serviced. And so we've gotten really good at that process. And I think that it's become a little bit easier to do some of those things. And so it's an opportunity for us to accelerate that as we look into the future. Mark Marcon: That's great. And then just as a follow-up, can you talk a little bit about like the R&D expense? It went down fairly significantly here in Q2 at the same time that the G&A actually went up a little bit. And I was just wondering, is that just a change in the allocation? Or are you getting more efficiencies? Obviously, the whole total, you're seeing great improvement in terms of the margins, which is terrific. But just wondering about the pieces moving around. Chad Richison: From an R&D perspective, I can take that and let Bob more take the G&A. I mean, we are developing differently than what we ever have in the past. I mean we're organized differently. Our structure is different. The process that product goes through is different, that a product would go through to get all the way through to release is different. And so I would say that's quite a bit different for us and our performance is very high. So we've been able to do all of this and increase productivity and client satisfaction with the product. And so from an R&D perspective, I would say that we've become much more effective. And that has also led to great efficiencies on that line. And then, Bob, if you want to... Robert Foster: Yes. On the G&A, it did go up a little bit. Biggest category is probably around professional services and some of that was related to a onetime expense. We expanded our -- and renewed our line of credit. There was a great interest in that. So we're proud that people believe in our robust business model and that's what led to some of that in the G&A. Operator: Your next question comes from the line of Jared Levine from TD Cowen. Jared Levine: It was good to hear that bookings came in line with your expectations in 2Q. I guess, have you seen that inflection that you were hoping for in terms of when you went into this year? Just directionally, any kind of color in terms of kind of the momentum here would be helpful on the bookings front and how you're kind of seeing things progress into 3Q so far? Chad Richison: Yes. I mean I would say that my expectations are always higher than what could maybe even reasonably be achieved. But what I will say this is, yes, bookings came in as expected. And also, just a stat to share is that our new reps coming out of training are getting up to productivity much faster than they ever have in the past and we're having great success with that. And so all this bodes well as we look into the future. Jared Levine: Got it. And then in terms of -- we've seen multiple of your competitors pushing more into managed services. I guess, how are you thinking about this opportunity, if at all? Chad Richison: I think we look at everything that has a positive impact on a client and can produce a strong ROI for them. And we also try to automate everything that we can. And we think that's very important, asking the questions why and what are you going to do with that so that we can go ahead and complete it for them. So we're going to continue to focus on that. We do have preemployment services. I think we're probably one of the largest preemployment service companies in the U.S. I think at one time, we were about fourth. That side of our service business continues to be very strong and is up a measurable amount for this year. Operator: Your next question comes from the line of Daniel Jester from BMO Capital Markets. Daniel Jester: Maybe first on IWant. Is there anything you can share about sort of how that ramped from a usage perspective in the quarter? And as you go back to customers that have been with you for a long time, have you seen any change in their willingness to adopt IWant and all of the functionality it provides? Chad Richison: Yes, not really any change. I would say the more you work with a consistent model that delivers accurate responses, the better you get at knowing how to ask it a question. And the better you get at asking questions, the less time it takes for you to get that response. And in our environment, your consecutive responses per second, that helps that become more efficient as well. So -- but yes, we continue to see great uptake. Nobody goes backwards in technology once you're used to using something. Once you're there, nobody steps away and goes backwards from that. We've said in the past that IWant is the predominant way that employees -- new employees experience our system. As we completed Project Arc, it put that even more in the spotlight. IWant will continue to grow in capability but it's very also important that we be accurate. We come up with AI functionality all the time and agents all the time and I always have the same question for the people that create it. I'm like, well, is it cool or is it accurate? And if I don't get an accurate response, I mean, we continue to work until we can produce that. And so we've been focused on that and IWant does deliver a very reliable, efficient way for someone to achieve all the value that's available to them in the Paycom system. Operator: Your next question comes from the line of Jacob Smith from Guggenheim. Jacob Cody Smith: Revenue from customers above 1,000 employees was growing faster than total in past quarters. So I was wondering if you could provide an update on what you're seeing there. And as the sales org goes to market with a full solution automation pitch, are you seeing average deal size or module count at initial entry any higher this quarter, particularly upmarket? Chad Richison: I wouldn't say that the profile of size of clients changed in the second quarter here. I think we continue to produce value across the board, regardless of the client size, industry or location. Jacob Cody Smith: Okay. And just as a quick follow-up, Chad, you talked about, at the beginning of the year, the goal of expanding sales capacity across offices. And on the last call, you mentioned new reps were coming through training and ramping faster than pretty much any class in a number of years. Can you give us an update on where you stand on that capacity expansion? Are you at the pace of hiring you'd like to be? And is this year more about driving productivity higher with existing reps or ramping new reps? Chad Richison: Both. I would say it's both. Definitely, productivity with existing reps continues to increase. With new reps, it takes a second. I mean your initial productivity gains you're going to get are always going to be with your current reps. New reps, it takes a second. They can get the value proposition. They understand the pitch. But then you go out there and you run into some situations that you have to get through and it takes sometimes a new rep a little bit longer to get that. So they stay in the game and then they start having success and then that confidence starts to build and then they start selling more and more and more. And so our existing reps are going to obviously outsell a lot more than our new reps but we do have so many new reps that we put in the field that we're very excited about what that's going to mean for us as we head both throughout this year and then as well as we go into next year. Operator: Your next question comes from the line of Kevin McVeigh from UBS. Kevin McVeigh: Congratulations on the results. I mean, it feels like the business is structurally different, right? I mean the pacing of the margin, the revenue you're delivering, is that primarily the standup of the data centers last year? Are you in the early phases of AI across the expense structure with more to come? And from a revenue perspective going forward, is it going to shift from more of a fixed with a variable component as opposed to PEPM? Any way to think about how the business model will be impacted? Clearly, you're in a good position and able to leverage it. But just anything that we can help because the results have been and continue to be exceptional. Chad Richison: Yes. I mean, I would say that the whole world is probably still a little bit in the early stages of AI. I would say we jumped in head first with everything we had last year, not just in product but in infrastructure and everything else. And then -- then we started using it to develop and become a lot stronger at that. And we started using it in areas of our service, how to identify things. And so we're becoming better and better at it. I wouldn't say we use AI for AI's sake. I mean automation matters and there's a great amount of accuracy you get with automation. And in our industry, you only get points for being accurate. And so that's always been a focus of ours. So we see that to continue. What was the other question from a fixed variable? I don't -- I'm not 100% sure on your revenue question, except to say our pricing model does follow somewhat industry norm. It is proprietary to us but it does follow industry norms and we do look to deliver to our clients the greatest amount of ROI for that spend with us. Operator: Your next question comes from the line of Bhavin Shah from Deutsche Bank. Bhavin Shah: Congrats on the strong quarter. It's nice to see all the new product releases. As you move into other adjacencies such as asset management, how do you have to think about adjusting maybe the go-to-market motion to account for the different potential end buyers that you might be dealing with outside of just the HR departments? Chad Richison: Yes. I mean we've had spend management for a while. We have other areas that impact the accounting department or the office of the CFO, if you will. I mean there's never been a deal that we've ever done where we weren't integrating with a general ledger system and what have you. Also, I mean, CFOs care about labor and what HCM system is deployed because for most -- for a lot of companies anyway, labor is one of their largest expenses. And so asset management does flow naturally into what we already do. Our same sales organization that we have now are well equipped to go sell our asset management as it both has a impact and provisioning for employees. And then it also has a total asset tracking system as well. And so we feel like that folds in nicely with what we're selling anyway. Bhavin Shah: Got it. And maybe just a quick follow-up for Bob. Just in terms of the strength you saw in the first half of the year, especially on the growth side, why not invest more into the business, just given what you're seeing happening versus kind of flow to the bottom line and that strong EBITDA that we saw, you guys guide to? Robert Foster: Yes. Well, we are continuing to invest in the business in different ways. So -- and you'll see that and that's why we believe it's -- we're just smart about how we do it and it's sustainable. So again, we are worried about the growth side and the efficiency side. Operator: Your next question comes from the line of Patrick O'Neill from Wolfe Research. John O'Neill: Just a quick one for me. How would you characterize the client employment growth in the first half of the year? And then maybe if the growth was positive, what was the benefit in the first half? And what's implied in the guidance from here following the impressive raise to the full year outlook? Chad Richison: I mean client employment growth would have just been stable, same, consistent with -- as it's been every year in the past with the exception of when it went down about 14% during COVID and then it came right back not long after that, may have been a little more than 14% that went down. But really since that time, we've had stability. And we would expect that and all of our guidance going forward would expect stability in that. Operator: Your next question comes from the line of Allan Verkhovski from U.S. Bancorp. Allan M. Verkhovski: Given the sequential decline in OpEx, how are you thinking about Paycom's head count growth through year-end? You mentioned earlier you're seeing labor efficiencies. So more color there would be helpful. Chad Richison: Sure. So our focus is product automation and that drives cost efficiencies in many areas, including labor. We update our employment numbers annually and we had 5,770 employees as of our last update that we gave on the February earnings call. We're focused on client ROI achievement, not necessarily our cost. The ROI achievement is higher with automation. And while there's no limit to what can be automated, there is a limit on labor efficiency as we do believe there's a strong human aspect to developing, selling, converting and servicing business. Operator: This concludes the question-and-answer portion of today's call. I will now turn the call back to Mr. Chad Richison for closing remarks. Thank you. Chad Richison: Thanks, everyone, for joining the call today. We look forward to speaking with many of you at the Deutsche Bank conference on August 26 in Dana Point and the Citi conference in New York City on September 8. I want to thank our employees for their contributions over the first half of the year. With that, operator, you may end the call. Operator: This concludes today's conference call. You may now disconnect. Before you buy stock in Paycom Software, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Paycom Software wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $403,337!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,334,946!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 12, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has positions in and recommends Paycom Software. The Motley Fool has a disclosure policy. Paycom (PAYC) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Interested in Paycom Software, Inc.? Here are five stocks we like better. Paycom exceeded Q2 expectations: Revenue rose 10% year over year to $531 million, while adjusted EBITDA increased to $235 million with a 44.2% margin, supported by automation and operating efficiencies. Full-year guidance was raised: Paycom now expects 2026 revenue of $2.197 billion to $2.212 billion, adjusted EBITDA of $1.007 billion to $1.022 billion, and free cash flow above $650 million. Growth initiatives and capital returns remain priorities: The company is expanding automation and AI products, adding sales capacity, and repurchased nearly 11 million shares for about $1.4 billion in the first half of 2026. 3 Stocks That Benefit if Companies Cut Costs in 2026 Paycom Software (NYSE:PAYC) reported second-quarter results that exceeded its expectations, citing broad-based revenue strength, growing demand for automation and improving operating efficiency. The company also raised its full-year revenue and adjusted EBITDA outlook. Total revenue rose 10% year over year to $531 million in the second quarter, while recurring and other revenue increased 11% to $505 million. GAAP net income climbed 20% to $107 million, or $2.34 per diluted share. On a non-GAAP basis, net income was $128 million, or $2.78 per diluted share. → Sandisk Just Delivered a Blowout Quarter—Here's Why the Stock Is Falling 3 Explosive Tech Stocks Breaking Out Right Now Adjusted EBITDA totaled $235 million, producing a 44.2% margin, up 320 basis points from a year earlier. CFO Bob Foster said the company’s automation efforts and use of its own technology are increasing productivity across the business and supporting sustainable margin expansion. Following its first-half performance, Paycom increased its 2026 guidance. The company now expects total revenue of $2.197 billion to $2.212 billion, representing growth of 7% to 8% from 2025. It expects recurring and other revenue to rise 8% to 9% for the full year. → 4 Oil and Gas ETF Plays as Prices Stay Sky-High PayPal’s User Decline Won’t Stop Its Double-Digit Upside The outlook includes approximately $105 million of interest on funds held for clients and assumes current interest rates remain in place for the rest of the year. Foster said that even if rates moved higher or lower, the impact on 2026 would be minimal. Paycom now forecasts full-year adjusted EBITDA of $1.007 billion to $1.022 billion, implying a record 46% adjusted EBITDA margin at the midpoint of the range. Foster also said the company expects free cash flow to exceed $650 million in 2026. → No Hangover: Revisiting Microsoft One Week After Earnings Asked about the improved cash-flow outlook, Foster pointed to broad-based efficiencies in processes and labor. He said the company had been working to bring EBITDA margins and free-cash-flow margins closer together and views the progress as sustainable. Founder and CEO Chad Richison said Paycom’s full-solution automation and service model continue to drive client return on investment. He said demand for automation is increasing and that the company is expanding its capabilities through artificial intelligence and automated decisioning. During the year, Paycom introduced a career and succession planning solution designed to help organizations identify talent gaps, assess readiness and develop potential successors. Richison said client adoption has been solid. In July, the company launched Asset Management, a product that enables businesses to track and manage physical and digital assets. Richison said the offering expands Paycom into what he described as a new multibillion-dollar total addressable market and represents the company’s 45th product developed, hosted, distributed and serviced during its nearly 28-year history. President Shane Hadlock highlighted Project Arc, which he called Paycom’s largest system-wide release. The update added customization features intended to give users more tailored views of information and action items, while also improving performance and scalability. Hadlock cited one client with more than 10,000 employees that reported system performance had increased fourfold. Hadlock also discussed Paycom’s AI offering, I Want, which automates events and tasks within the system. Richison said I Want is frequently the first interaction new employees have with Paycom’s platform and emphasized that the company’s focus is on providing accurate responses rather than deploying AI solely for its own sake. Richison said second-quarter revenue strength was broad-based and did not stem from one-time factors. Products launched last year are beginning to contribute to results, while the more recently released career and succession planning and Asset Management products are expected to contribute more in future periods. He said bookings came in as expected during the quarter. Paycom’s sales include both sales to new prospects and sales to existing customers, though the company has also implemented in-app purchasing capabilities that can bypass the traditional booked-sales process for certain products. Management said Paycom’s sales pipeline remains strong and that new sales representatives are reaching productivity faster than they have historically. Richison said the company has expanded teams from eight to 10 representatives and has added more than 100 new sales representatives. Existing representatives are expected to remain more productive in the near term, while the larger new-representative cohort is expected to support future booked sales as it develops. The company said client employment growth remained stable during the first half, consistent with levels seen in recent years outside of the COVID-19 period. Paycom repurchased approximately 2.6 million shares, or about 6% of shares outstanding, for $346 million during the second quarter. Over the first six months of 2026, the company repurchased nearly 11 million shares for approximately $1.4 billion, reducing shares outstanding by 20%. Paycom ended the quarter with roughly 44 million shares outstanding and $1.66 billion remaining under its repurchase authorization. The company also paid approximately $18 million in cash dividends during the quarter. Its board approved a quarterly dividend of $0.375 per share on Aug. 3, payable in early September. At quarter-end, Paycom had $198 million in cash and cash equivalents. It had drawn $900 million on its $2.1 billion revolving credit facility to support year-to-date repurchases. Average daily funds held for clients rose 9% year over year to approximately $2.9 billion. 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. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Paycom Software Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Paycom Software, Inc. PAYC used its second-quarter 2026 call to frame automation as a driver of client value and internal efficiency. Management raised its full-year revenue and adjusted EBITDA outlook after results exceeded expectations. Non-GAAP earnings of $2.78 per share topped the Zacks Consensus Estimate of $2.28, while revenues of $531.2 million exceeded the $512.3 million consensus. Executives emphasized that the strength was broad-based rather than tied to a one-time factor. Paycom Software, Inc. price-consensus-eps-surprise-chart | Paycom Software, Inc. Quote Chief financial officer Bob Foster raised 2026 revenue guidance to $2.197 billion to $2.212 billion, representing 7% to 8% growth. Recurring and other revenues are expected to increase 8% to 9%. Foster projected adjusted EBITDA of $1.007 billion to $1.022 billion, with a record margin of about 46% at the midpoint. The outlook includes approximately $105 million of interest on funds held for clients. During the Q&A, Foster said guidance assumes no rate changes for the rest of 2026, while any change would have a minimal current-year effect. He also expects free cash flow to exceed $650 million. Founder and CEO Chad Richison said the upside came from the same revenue sources that have historically supported the business. He said no special item or isolated event drove the quarter. Revenues increased 9.8% year over year, while recurring and other revenue rose 11.0%. Adjusted EBITDA reached $235.0 million, and its margin expanded 320 basis points to 44.2%. Asked about slower growth embedded in the annual outlook, Richison said pipelines remain very strong. He also described client employment growth as stable and consistent with the assumptions used in guidance. Richison said Paycom spent more than $100 million in 2025 to prepare data centers to host its own artificial intelligence models. The infrastructure also provided capacity that improved system performance. Richison expects that investment to produce about $100 million of research and development savings in 2026, plus more than $30 million of avoided third-party response fees for IWant. CFO Bob Foster said improved conversion from adjusted EBITDA to free cash flow reflects broad-based process and labor efficiencies. Richison added that changes to development structure and product-release processes have raised R&D productivity. Richison highlighted adoption of Career and Succession Planning and the July launch of Asset Management. He called Asset Management an entry into a new multibillion-dollar addressable market and Paycom's 45th internally developed product. President and chief client officer Shane Hadlock described Project Arc as the largest systemwide release in company history. The update added customization and scalability, with one client reporting a fourfold performance improvement. Richison said the newest products made little contribution to second-quarter revenues but should contribute more over time. He also stressed that IWant adoption continues to expand, with accuracy remaining the priority for new AI functions. Richison said the sales force is adapting to a more detailed process built around demonstrating full-solution return on investment. Paycom expanded teams from eight to 10 representatives, adding more than 100 sales positions. Richison said bookings met management's expectations, while new representatives are reaching productivity faster than prior classes. Existing-representative productivity is also improving as pipelines expand across territories. Foster said Paycom repurchased about 2.6 million shares for $346 million during the quarter. First-half repurchases totaled nearly 11 million shares for approximately $1.4 billion, reducing shares outstanding by 20%. Management's message centered on pairing product expansion and sales capacity with continued automation across development, service and internal processes. The raised outlook reflects first-half results and greater visibility into the rest of 2026. The call showed that Paycom is pursuing growth alongside margin expansion and capital returns. Executives remained confident in demand, pipeline development and the longer-term contribution from recently introduced products. PAYC carries a Zacks Rank #2 (Buy), along with Value, Growth and VGM Scores of B. Under the Zacks framework, a top-two Rank combined with A or B Style Scores represents a favorable alignment of estimate-revision and style characteristics. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Its Momentum Score is C. The Zacks Rank can change as analysts revise earnings estimates following the just-reported results, so the current signal is not fixed. (We are reissuing this article to correct a mistake. The original article, issued on August 06, 2026, should no longer be relied upon.) Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Paycom Software, Inc. (PAYC) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

This article first appeared on GuruFocus. Total Revenue: $531 million, up 10% year-over-year. Recurring and Other Revenue: $505 million, up 11% year-over-year. GAAP Net Income: $107 million, or $2.34 per diluted share, up 20% year-over-year. Non-GAAP Net Income: $128 million, or $2.78 per diluted share. Adjusted EBITDA: $235 million, with a 320 basis point year-over-year margin expansion to 44.2%. Share Repurchases: Approximately 2.6 million shares repurchased in Q2 for $346 million; nearly 11 million shares repurchased in the first half, reducing shares outstanding by 20%. Cash and Cash Equivalents: $198 million at quarter end. Funds Held for Clients: Average daily balance of approximately $2.9 billion, up 9% year-over-year. Full-Year Revenue Guidance: Expected between $2.197 billion and $2.212 billion, representing 7% to 8% year-over-year growth. Full-Year Adjusted EBITDA Guidance: Expected between $1.007 billion and $1.022 billion, representing a record adjusted EBITDA margin of 46% at the midpoint. Warning! GuruFocus has detected 3 Warning Sign with PAYC. Is PAYC fairly valued? Test your thesis with our free DCF calculator. Release Date: August 05, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Paycom Software Inc (NYSE:PAYC) delivered strong Q2 2026 results, with total revenue of $531 million, up 10% year-over-year, and recurring revenue up 11%, beating expectations. The company raised its full-year 2026 revenue and adjusted EBITDA guidance, now expecting record adjusted EBITDA margins of 46% at the midpoint. New product launches, including career and succession planning and asset management, are expanding Paycom's total addressable market and driving client adoption. Project ARC, the largest system-wide release in company history, has significantly improved system performance and scalability, with one client reporting a 4x performance increase. Paycom's aggressive share repurchase program reduced shares outstanding by 20% in the first half of 2026, returning $1.4 billion to stockholders and enhancing EPS growth. The company expects free cash flow to exceed $650 million in 2026, driven by sustainable operational efficiencies and automation initiatives. Paycom Software Inc (NYSE:PAYC) faces a potential valuation disconnect in the market, as management noted, which may pressure stock performance. The company's revenue growth guidance for 2026 implies a slight deceleration in the second half, with total revenue growth expected to be 7-8% versus 10% in Q2. Interest on funds held for clients is expected to be approximately $105 million, assuming current rates hold, which could be impacted by any rate cuts. The company has drawn down $900 million on its revolving credit facility to fund buybacks, increasing leverage and financial risk. Sales productivity improvements are still in progress, with many new reps in training and the expansion of sales teams from 8 to 10 members, which may take time to fully contribute to bookings. Client employment growth has been stable but not accelerating, limiting potential upside from organic client expansion. Q: Was there anything special or one-off in the quarter driving the significant revenue beat and acceleration?A: Chad Richison, CEO, stated the strength was broad-based with no one-off factors. He noted that products released last year are starting to contribute, while the two most recent product launches (Career & Succession Planning and Asset Management) did not have a meaningful impact on the quarter's results but are expected to contribute more in the future. Q: Can you provide an update on the free cash flow outlook and the levers driving the improved conversion from EBITDA?A: CFO Robert Foster provided a specific outlook, stating the company expects free cash flow to exceed $650 million in 2026. CEO Chad Richison explained that the improvement is driven by sustainable, broad-based efficiencies in internal processes and labor workforce, aligning with their goal to close the gap between EBITDA margin and free cash flow margin. Q: How is the sales organization performing, and what is the impact of the new sales reps and training on productivity?A: Chad Richison noted that bookings came in as expected. He highlighted that new reps coming out of training are achieving productivity much faster than in the past. The company expanded its sales teams from 8 to 10 members, adding over 100 new reps, and expects this additional headcount to be accretive to future bookings as their pipelines grow. Q: Can you elaborate on the internal use of AI and how it is driving productivity in the sales organization?A: Chad Richison explained that while AI assists in prospecting and identifying trends, Paycom maintains a high-touch sales model. He noted that the company has increasingly allowed clients to purchase products in-app, which can circumvent the traditional sales process, as seen with the recent Career and Succession Planning product. Q: How should we think about capital allocation given the aggressive buyback in the first half of the year?A: Chad Richison framed the strategy by highlighting that last year's $100 million investment in data centers to host AI models is leading to approximately $100 million in R&D savings and $30 million in avoided third-party fees this year. CFO Robert Foster added that CapEx will be more normalized, and the strong results flow through to record free cash flow, which is expected to exceed $650 million in 2026. Q: What is driving the sequential decline in OpEx, and how are you thinking about headcount growth?A: Chad Richison stated the focus is on product automation, which drives cost efficiencies, including in labor. He reiterated that the company had 5,770 employees as of the last update and emphasized that while there is a limit on labor efficiency due to the human aspect of the business, there is no limit to what can be automated. Q: Can you provide an update on the adoption and usage of the AI solution, IWant?A: Chad Richison reported continued strong uptake, noting that IWant is the predominant way new employees experience the system. He emphasized the focus on accuracy over "coolness," stating that the team works diligently to ensure the AI delivers reliable and efficient responses, which is critical for client ROI. Q: How is the company approaching the new Asset Management product, and does it require a different go-to-market motion?A: Chad Richison explained that Asset Management fits naturally into the existing ecosystem, as it impacts provisioning for employees and total asset tracking. He confirmed that the current sales organization is well-equipped to sell the product, as it folds in nicely with the existing HCM and spend management solutions. Q: What are the assumptions for interest rates in the guidance, and how would a change impact the year?A: CFO Robert Foster stated that the guidance assumes no rate increases or cuts for the remainder of the year. He noted that even if there were a change, it would have a minimal impact on this year's financial results. Q: Can you provide color on the current sales pipeline and the contribution from new products?A: Chad Richison stated that pipelines remain very strong and continue to build as more reps enter their territories. He highlighted that hosting their own AI models has accelerated development, allowing for quicker product releases. He noted that the company has become highly efficient at developing, releasing, and servicing products, which positions them to accelerate innovation in the future. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Paycom Software (PAYC) came out with quarterly earnings of $2.78 per share, beating the Zacks Consensus Estimate of $2.28 per share. This compares to earnings of $2.06 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +21.93%. A quarter ago, it was expected that this maker of human-resources and payroll software would post earnings of $2.93 per share when it actually produced earnings of $3.15, delivering a surprise of +7.51%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. Paycom, which belongs to the Zacks Internet - Software industry, posted revenues of $531.2 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 3.69%. This compares to year-ago revenues of $483.6 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Paycom shares have added about 10% since the beginning of the year versus the S&P 500's gain of 13%. While Paycom has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Paycom was favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $2.33 on $533.57 million in revenues for the coming quarter and $10.79 on $2.19 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Internet - Software is currently in the top 44% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, Datadog (DDOG), has yet to report results for the quarter ended June 2026. The results are expected to be released on August 6. This data analytics and cloud monitoring company is expected to post quarterly earnings of $0.58 per share in its upcoming report, which represents a year-over-year change of +26.1%. The consensus EPS estimate for the quarter has been revised 0.7% higher over the last 30 days to the current level. Datadog's revenues are expected to be $1.08 billion, up 30.6% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Paycom Software, Inc. (PAYC) : Free Stock Analysis Report Datadog, Inc. (DDOG) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Find your next quality investment with Simply Wall St's easy and powerful screener, trusted by over 7 million individual investors worldwide. After a long stretch of weak returns, with Paycom Software stock down about 61% over the past 5 years, the recent rebound has raised a straightforward question for investors about whether the current price still looks cheap on the usual valuation checks. The share price decline of about 61% over 5 years points to a company where expectations have reset and where sentiment has been cautious for an extended period. Recent interest in Paycom Software’s AI driven employee management services can support growth expectations, while any disappointment in how these AI features translate into durable revenue and profit could weigh on how much investors are willing to pay for the stock. On Simply Wall St’s broader checklist Paycom Software screens as undervalued on 5 of 6 measures, which means the valuation tests lean in favor of the stock looking cheap on several key metrics. The issue now is whether that apparent discount, set against the share price recovery and AI driven growth story, still offers enough value to justify taking on the risks around future performance. Find out why Paycom Software's -21.0% return over the last year is lagging behind its peers. P/E is a useful check for Paycom Software because the company is profitable and earnings are a key anchor for what investors are paying today. Paycom Software currently trades on a P/E of about 17.4x, which is below both the Professional Services industry average of roughly 22.5x and the peer group average of about 19.3x. On Simply Wall St’s fair ratio framework, which blends factors like growth, margins, size and risk into a tailored benchmark, Paycom Software screens on a fair P/E of about 19.8x. That means the market is pricing Paycom Software at a discount to where this model suggests it might typically trade, and at a discount to its industry and peer averages. Despite the recent uplift in sentiment after Paycom raised its annual revenue forecast on AI driven demand, the current P/E still sits below these reference points. For investors who lean on earnings based valuation checks, this gap is an important part of the overall picture. On the P/E multiple, Paycom Software currently appears undervalued compared with both its tailored fair ratio and sector benchmarks. See what the numbers say about this price — find out in our valuation breakdown. Simply Wall St Narratives for Paycom Software pick up where the valuation puzzle leaves off and explain which combinations of future growth, margins and earnings would need to occur for the stock to be worth materially more or less than today’s price. Each one links a specific fair value to a clear story about Paycom Software's potential catalysts and risks so you can track over time which version of events is taking shape on the Community page. The community is split on Paycom Software, with one camp leaning into the AI and buyback story and the other focused on execution and cost risk. Bull case: 10% undervalued Read the full Bull Case to see why Paycom Software could be undervalued Bear case: 46% overvalued Read the full Bear Case to see why Paycom Software could be overvalued Do you think there's more to the story for Paycom Software? Head over to our Community to see what others are saying! Paycom Software screens as undervalued on the market multiple checks, with the current P/E sitting below both sector averages and its tailored fair ratio framework. That points to a stock where expectations remain restrained, even after interest in its AI driven products. The key issue is whether Paycom can turn those AI tools into dependable revenue and earnings, without eroding margins or running into execution problems. The crux for you as an investor is whether the current discount reflects a genuine opportunity or is simply the market pricing in the risk that the AI story does not fully deliver. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include PAYC. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Paycom Software, Inc. PAYC reported better-than-expected second-quarter 2026 results, wherein both top and bottom lines surpassed the Zacks Consensus Estimate. The online payroll and human resource technology provider reported non-GAAP earnings of $2.78 per share, which increased 35% year over year and beat the Zacks Consensus Estimate by 21.9%. Paycom’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, while missing once, the average surprise being 7.2%. Revenues totaled $531.2 million, which rose 9.8% from the year-ago quarter and exceeded the consensus estimate by 3.7%. Paycom Software, Inc. price-consensus-eps-surprise-chart | Paycom Software, Inc. Quote Paycom’s Recurring revenues (representing 95.1% of the total revenues) improved 11% to $505.2 million in the second quarter. Our estimate for the company’s Recurring revenues was pegged at $485.7 million. Paycom’s revenues from the Interest on funds held for clients segment decreased to $26 million from $28.5 million in the year-ago quarter and contributed 4.9% to total sales. Our estimate for the segment’s revenues was pegged at $25.9 million. Adjusted gross profits increased 10.4% from the year-ago period to $444.1 million. The adjusted gross margin expanded 40 basis points (bps) on a year-over-year basis to 83.6%. Paycom’s adjusted EBITDA rose 18.5% year over year to $235 million. The adjusted EBITDA margin expanded 320 basis points to 44.2%. Paycom exited the second quarter with cash and cash equivalents of $198 million compared with $153.9 million recorded in the previous quarter. The company had long-term debt of $900 million as of June 30, 2026. In the second quarter of 2026, PAYC generated operating cash flow of approximately $213.8 million, paid out $17.9 million in dividends and bought back $345.9 million worth of its common stock. Following the second-quarter performance, management raised its full-year 2026 guidance ranges. For 2026, Paycom expects total revenues of $2.197-$2.212 billion, implying year-over-year growth of 7-8%, up from its prior range of $2.175-$2.195 billion. The Zacks Consensus Estimate is pegged at $2.19 billion, indicating year-over-year growth of 6.7%. The company projects recurring revenues to grow 8-9% year over year, up from its prior range of 7-8%. PAYC forecasts revenues from Interest on funds held for clients to be $105 million, up from the prior projection of $103 million. Paycom expects its 2026 adjusted EBITDA to be between $1.007 billion and $1.022 billion, translating to an EBITDA margin of approximately 46% at the midpoint, up from the earlier guided range of $950 million to $970 million. Currently, PAYC carries a Zacks Rank #2 (Buy). Some other top-ranked stocks in the broader Zacks Computer and Technology sector are Lumentum LITE, Applied Materials AMAT and Analog Devices ADI, each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Shares of Lumentum have surged 123% year to date. The Zacks Consensus Estimate for LITE’s fiscal 2026 earnings is pegged at $8.19 per share, up by 5 cents over the past 30 days, indicating an increase of 297.6% year over year. Shares of Applied Materials have jumped 107.9% year to date. The Zacks Consensus Estimate for AMAT’s fiscal 2026 earnings is pegged at $12.14 per share, up by 3 cents over the past 30 days, indicating a rise of 28.9% year over year. Analog Devices shares have surged 39.2% year to date. The Zacks Consensus Estimate for ADI’s fiscal 2026 earnings is pegged at $12.42 per share, up by 10 cents over the past 30 days, indicating an increase of 33.9% year over year. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Paycom Software, Inc. (PAYC) : Free Stock Analysis Report Analog Devices, Inc. (ADI) : Free Stock Analysis Report Applied Materials, Inc. (AMAT) : Free Stock Analysis Report Lumentum Holdings Inc. (LITE) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

In early August 2026, Paycom Software reported second-quarter results showing higher revenue and net income than a year earlier and issued full-year 2026 revenue guidance of US$2.20 billion to US$2.21 billion, implying year-over-year growth between 7% and 8%. Alongside these results, Paycom highlighted ongoing adoption of its AI-enhanced HR platform and declared a US$0.375 per-share dividend, underscoring the company’s focus on both product innovation and returning cash to shareholders. With Paycom lifting full-year revenue guidance on the back of its AI-driven HR platform, we’ll assess how this updates its investment narrative. The latest GPUs need a type of rare earth metal called Terbium and there are only 28 companies in the world exploring or producing it. Find the list for free. To own Paycom, you generally need to believe its AI driven HR platform can deepen customer adoption enough to support steady recurring revenue, even as competitors push similar tools. The latest guidance raise and solid Q2 results reinforce that AI remains the key short term catalyst, while the biggest risk is that industry wide automation makes those capabilities feel interchangeable. This update does not remove that risk, but it does not materially increase it either. The most relevant announcement here is Paycom’s updated 2026 revenue guidance of US$2.197 billion to US$2.212 billion, up from prior guidance issued in February. That slight lift, following Q2 revenue of US$531.2 million and higher year on year net income, directly ties the current AI adoption story to near term numbers. It also gives investors a fresher reference point for judging whether Paycom’s AI driven HR products are translating into sustainable growth or plateauing momentum. Yet while AI adoption looks encouraging today, investors should also be aware that... Read the full narrative on Paycom Software (it's free!) Paycom Software's narrative projects $2.6 billion revenue and $582.4 million earnings by 2029. This requires 6.9% yearly revenue growth and about a $112.7 million earnings increase from $469.7 million today. Uncover how Paycom Software's forecasts yield a $151.44 fair value, a 13% downside to its current price. The lowest analysts were already assuming only about 6.6 percent annual revenue growth to roughly US$2.5 billion by 2029, and this more cautious view on AI driven adoption risks may shift again after these stronger Q2 results and higher 2026 guidance, so it is worth comparing these pessimistic expectations with your own. Explore 4 other fair value estimates on Paycom Software - why the stock might be worth 13% less than the current price! Don't just follow the ticker - dig into the data and build a conviction that's truly your own. A great starting point for your Paycom Software research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision. Our free Paycom Software research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Paycom Software's overall financial health at a glance. Right now could be the best entry point. These picks are fresh from our daily scans. Don't delay: The future of work is here. Discover the 35 top robotics and automation stocks leading the charge in AI-driven automation and industrial transformation. We've uncovered the 8 dividend fortresses yielding 5%+ that don't just survive market storms, but thrive in them. Uncover the next big thing with 19 elite penny stocks that balance risk and reward. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include PAYC. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Paycom Software, Inc. PAYC used its second-quarter 2026 call to frame automation as a driver of client value and internal efficiency. Management raised its full-year revenue and adjusted EBITDA outlook after results exceeded expectations. Non-GAAP earnings of $2.78 per share topped the Zacks Consensus Estimate of $2.28, while revenues of $531.2 million exceeded the $512.3 million consensus. Executives emphasized that the strength was broad-based rather than tied to a one-time factor. Paycom Software, Inc. price-consensus-eps-surprise-chart | Paycom Software, Inc. Quote Chief financial officer Robert Foster raised 2026 revenue guidance to $2.197 billion to $2.212 billion, representing 7% to 8% growth. Recurring and other revenues are expected to increase 8% to 9%. Foster projected adjusted EBITDA of $1.007 billion to $1.022 billion, with a record margin of about 46% at the midpoint. The outlook includes approximately $105 million of interest on funds held for clients. During the Q&A, Foster said guidance assumes no rate changes for the rest of 2026, while any change would have a minimal current-year effect. He also expects free cash flow to exceed $650 million. Founder, chairman and CEO Chad Richison said the upside came from the same revenue sources that have historically supported the business. He said no special item or isolated event drove the quarter. Revenues increased 9.8% year over year, while recurring and other revenue rose 11.0%. Adjusted EBITDA reached $235.0 million, and its margin expanded 320 basis points to 44.2%. Asked about slower growth embedded in the annual outlook, Richison said pipelines remain very strong. He also described client employment growth as stable and consistent with the assumptions used in guidance. Richison said Paycom spent more than $100 million in 2025 to prepare data centers to host its own artificial intelligence models. The infrastructure also provided capacity that improved system performance. Richison expects that investment to produce about $100 million of research and development savings in 2026, plus more than $30 million of avoided third-party response fees for IWant. CFO Robert Foster said improved conversion from adjusted EBITDA to free cash flow reflects broad-based process and labor efficiencies. Richison added that changes to development structure and product-release processes have raised R&D productivity. Richison highlighted adoption of Career and Succession Planning and the July launch of Asset Management. He called Asset Management an entry into a new multibillion-dollar addressable market and Paycom's 45th internally developed product. President and chief client officer Terrell Hadlock described Project Arc as the largest systemwide release in company history. The update added customization and scalability, with one client reporting a fourfold performance improvement. Richison said the newest products made little contribution to second-quarter revenues but should contribute more over time. He also stressed that IWant adoption continues to expand, with accuracy remaining the priority for new AI functions. Richison said the sales force is adapting to a more detailed process built around demonstrating full-solution return on investment. Paycom expanded teams from eight to 10 representatives, adding more than 100 sales positions. Richison said bookings met management's expectations, while new representatives are reaching productivity faster than prior classes. Existing-representative productivity is also improving as pipelines expand across territories. Foster said Paycom repurchased about 2.6 million shares for $346 million during the quarter. First-half repurchases totaled nearly 11 million shares for approximately $1.4 billion, reducing shares outstanding by 20%. Management's message centered on pairing product expansion and sales capacity with continued automation across development, service and internal processes. The raised outlook reflects first-half results and greater visibility into the rest of 2026. The call showed that Paycom is pursuing growth alongside margin expansion and capital returns. Executives remained confident in demand, pipeline development and the longer-term contribution from recently introduced products. PAYC carries a Zacks Rank #2 (Buy), along with Value, Growth and VGM Scores of B. Under the Zacks framework, a top-two Rank combined with A or B Style Scores represents a favorable alignment of estimate-revision and style characteristics. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Its Momentum Score is C. The Zacks Rank can change as analysts revise earnings estimates following the just-reported results, so the current signal is not fixed. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Paycom Software, Inc. (PAYC) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Investing.com - U.S. stock index futures hovered around the flatline on Thursday as investors awaited developments over a potential agreement to reopen the Strait of Hormuz, while renewed concerns over the sustainability of the artificial intelligence spending boom pressured technology shares. By 05:42 ET (09:42 GMT), futures pointed to a muted start on Wall Street, with weakness in semiconductor and data storage companies offsetting strength in selected software and industrial names. Technology stocks were under pressure after quarterly results from memory storage companies Sandisk and Western Digital failed to justify elevated investor expectations following a strong AI-driven rally this year. Sandisk tumbled 9.2% in premarket trading, while Western Digital slumped 14.6%, as investors questioned whether demand growth would be sufficient to sustain lofty valuations across the AI infrastructure supply chain. Oracle fell 2.5%, extending a pullback after a strong rally in the previous session, as investors focused on growing concerns over the software giant's balance sheet following reports that its five-year credit default swap spreads had climbed to record levels amid heavy debt-funded investment in AI infrastructure. Among gainers, payroll software provider Paycom Software surged 13.1% after reporting second-quarter earnings that comfortably exceeded Wall Street expectations. Adjusted earnings per share came in at $2.78, well above estimates of $2.38, while revenue rose 10% year-on-year to $531.2 million. Expanding profit margins also helped lift sentiment. Aeva Technologies climbed 17.7% after the lidar technology company posted quarterly results ahead of expectations and unveiled plans to expand into AI data center infrastructure, opening a new growth avenue beyond automotive applications. SurgePays soared 57.5% after announcing the formation of a new wireless distribution joint venture that significantly expands its prepaid mobile retail footprint, while Mangoceuticals jumped 31.9% after its proposed merger partner announced progress on the development of a transportable nuclear microreactor. On the downside, EPAM Systems fell 9.1% after cutting its full-year revenue growth outlook despite posting better-than-expected quarterly earnings and revenue, with weaker guidance overshadowing the quarterly beat. LegalZoom plunged 23% after reducing its full-year revenue forecast, citing a sharp slowdown in customer traffic from Google Search and weaker efficiency in paid search advertising despite narrowly beating earnings estimates. Verra Mobility dropped 11.5% after cutting its annual revenue guidance, saying renewed tolling contracts with Avis Budget Group and Hertz would generate materially lower economics even though second-quarter earnings and revenue topped expectations. Honeywell Aerospace, recently spun off from Honeywell International, fell 13.1% after slashing its full-year financial outlook, overshadowing solid quarterly revenue growth and healthy order trends in its first earnings report as an independent company. Inseego declined 12.5% after reporting a wider-than-expected quarterly loss and lowering its full-year revenue outlook, while online resale marketplace ThredUp sank nearly 30% after trimming annual revenue guidance despite meeting quarterly sales expectations. Recon Technology tumbled almost 30% as investors continued to react to the potential dilution from a recently announced $100 million at-the-market equity offering. Related articles Paycom jumps premarket after earnings; Data storage companies fall 5 reasons why Jefferies thinks Meta’s pullback is a buying opportunity Wolfe Research outlines eight risks that could spark stock declines in 2026

Second Quarter Total Revenues of $531 million, up 10% year-over-year Second Quarter GAAP Net Income of $107 million, representing 20% of total revenues, or $2.34 per diluted share Second Quarter Non-GAAP Net Income of $128 million, or $2.78 per diluted share Second Quarter Adjusted EBITDA of $235 million, representing 44% of total revenues OKLAHOMA CITY, August 05, 2026--(BUSINESS WIRE)--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, 2026. "Our strong second-quarter results came in ahead of expectations, reflecting the strength of our automation strategy and disciplined execution," said Paycom’s founder and CEO, Chad Richison. "We are building strong momentum through new product innovation and continued automation across our platform. With these strong results we are raising our full year outlook." Financial Highlights for the Second Quarter of 2026 Total Revenues of $531.2 million represented a 9.8% increase compared to total revenues of $483.6 million in the same period last year. Recurring and other revenues of $505.2 million increased 11.0% from the comparable prior year period and constituted 95.1% of total revenues. GAAP Net Income was $107.4 million, or $2.34 per diluted share, compared to GAAP net income of $89.5 million, or $1.58 per diluted share, in the same period last year. Non-GAAP Net Income1 was $127.7 million, or $2.78 per diluted share, compared to $116.6 million, or $2.06 per diluted share, in the same period last year. Adjusted EBITDA1 was $235.0 million, compared to $198.3 million in the same period last year. Cash and Cash Equivalents were $198.0 million as of June 30, 2026, compared to $370.0 million as of December 31, 2025. During the quarter ended June 30, 2026, Paycom paid $17.9 million in cash dividends and repurchased 2,570,072 shares of common stock for $345.9 million, in the aggregate. Financial Outlook Paycom provides the following expected financial guidance for the year ending December 31, 2026. Total revenue in the range of $2.197 billion to $2.212 billion, representing year-over-year growth between 7% and 8%. Recurring and other revenue growth between 8% and 9% year over year. Interest on funds held for clients of approximately $105 million. Adjusted EBITDA in the range of $1.007 billion to $1.022 billion, representing a margin of approximately 46% at the midpoint. We have not reconciled the forward-looking adjusted EBITDA ranges and adjusted EBITDA margin presented above and discussed on the teleconference call to net income, and have not reconciled any other forward-looking non-GAAP metrics that may be discussed on the teleconference call, including free cash flow margin and non-GAAP effective income tax rate, 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, capital expenditures, changes in working capital and other items. Accordingly, reconciliations of the forward-looking adjusted EBITDA ranges to net income, the forward-looking adjusted EBITDA margin to net income margin, the forward-looking non-GAAP effective income tax rate to the GAAP effective income tax rate, and the forward-looking free cash flow margin to operating cash flow margin 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, non-GAAP effective income tax rate, free cash flow and free cash flow margin. 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, less any gain on modification of the naming rights agreement, (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, less any gain on modification of the naming rights agreement, 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, (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, (ix) free cash flow as net cash provided by operating activities, less purchases of property and equipment and purchases of intangible assets (if any), and (x) free cash flow margin as free cash flow (calculated as described in clause (ix)) divided by total revenues. The terms "capital expenditures" and "cap ex" refer to the aggregate amount of purchases of property and equipment and purchases of intangible assets, if any, during the applicable period. 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, GAAP effective income tax rate and net cash provided by operating activities. 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, August 5, 2026, at 5:00 p.m. Eastern time to discuss its financial results. To access this call, dial (833) 461-5787 and provide 911359368 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 Paycom Software, Inc. (NYSE: PAYC) is a cloud-based human capital management software provider that allows organizations of all sizes across the U.S. and internationally to set numerous HR and payroll tasks to "automatic" through employee-first technology. Built on a truly single database, Paycom’s full-solution automation manages the entire employment life cycle, helping organizations streamline processes and improve data accuracy. With its industry-first AI engine, IWant™, Paycom provides instant access to accurate employee data without requiring users to navigate or learn the software. For over 25 years, Paycom has been repeatedly recognized by third‑party reviewers as a leading payroll and HCM solution. Financial Presentation Dollar amounts are presented in millions, except amounts per share. As a result, some amounts may not sum or recalculate exactly due to rounding. All percentages have been calculated using unrounded amounts. 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 our 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, including macroeconomic factors; 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, as well as how certain applications may impact client employee usage and client satisfaction; our ability to attract and retain qualified employees and key personnel; future regulatory, judicial and legislative changes; how the performance of certain of our offerings is sensitive to changes in the labor market; our plan to expand our sales capacity 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 using cash and/or borrowings under our senior secured revolving credit facility; 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. (9.0)  — Adjusted EBITDA $235.0  $198.3  $510.4  $451.6 Net income margin  20.2%  18.5%  23.9%  22.6%Adjusted EBITDA margin  44.2%  41.0%  46.3%  44.5% View source version on businesswire.com: https://www.businesswire.com/news/home/20260805706400/en/ Contacts Paycom Software, Inc.Investor Relations Contact:James Samford, [email protected]