PAYC

PAYC develops and sells cloud-based software for human resources management, providing data and analytics to manage the full employment cycle. The company's second-quarter 2026 report showed revenue of $531 million (a 10% year-over-year gain), GAAP net income of $107 million or $2.34 per diluted share (a 20% jump), returned $346 million to shareholders through repurchases, and increased full-year revenue and adjusted EBITDA guidance to a high end of $2.212 billion and $1.022 billion, respectively. The company reports again on Nov. 4. It's no wonder PAYC shares are up 65% this year – and they could rise more. MoneyFlows data shows how Big Money investors are once again betting heavily on the forward picture of the stock. Institutional volumes reveal plenty. In the last year, PAYC has enjoyed strong investor demand, which we believe to be institutional support. Each green bar signals unusually large volumes in PAYC shares. They reflect our proprietary inflow signal, pushing the stock higher: Plenty of technology names are under accumulation right now. But there's a powerful fundamental story happening with Paycom. Institutional support and a healthy fundamental backdrop make this company worth investigating. As you can see, PAYC has had strong sales and earnings growth: - 3-year sales growth rate (+14.4%) - 3-year EPS growth rate (+21.3%) Source: FactSet Also, EPS is estimated to ramp higher this year by +15.6%. Now it makes sense why the stock has been generating Big Money interest again. PAYC has a track record of strong financial performance. Marrying great fundamentals with our proprietary software has found some big winning stocks over the long term. Paycom has been a top-rated stock at MoneyFlows. That means the stock has unusual buy pressure and growing fundamentals. We have a ranking process that showcases stocks like this on a weekly basis. It's made the rare Outlier 20 report 64 times since 2015, gaining 620% in that time. The blue bars below show when PAYC was a top pick this year…institutions are still buying: Tracking unusual volumes reveals the power of money flows. This is a trait that most outlier stocks exhibit…the best of the best. Big Money demand drives stocks upward. The PAYC revival isn't new at all. Big Money buying in the shares is signaling to take notice. Given the historical gains in share price and strong fundamentals, this stock could be worth a spot in a diversified portfolio. Disclosure: the author holds long positions in PAYC in personal and managed accounts at the time of publication. If you are a Registered Investment Advisor (RIA) or a serious investor, take your investing to the next level. MoneyFlows created 11 Frontiers indexes to help serious investors capture AI-driven themes and learn the leading stocks in each Frontier. Get started here. This article was originally posted on FX Empire - XRP Price Prediction: Social Mentions Favor Bullish Recovery as XRP Bounces Off Key Support - US Earnings Season: What the 29% Profit Growth Forecast Really Tells Investors (Part 1) - Bitcoin Price Forecast: BTC Bull Flag Targets $93,000 as Whales Accumulate - Ethereum Price Prediction: Rally Poised to Resume as ETH Finds Strong Floor at $2.4K - Zcash Price Forecast: ZEC Paints 40% Crash Setup Ahead of Critical NU7 Upgrade - US Dollar Price Forecast: Warsh Holds Fire, DXY Tests 101.80 as EUR/USD, GBP/USD Gain

If you are looking for a stock that has a solid history of beating earnings estimates and is in a good position to maintain the trend in its next quarterly report, you should consider Paycom Software (PAYC). This company, which is in the Zacks Internet - Software industry, shows potential for another earnings beat. When looking at the last two reports, this maker of human-resources and payroll software has recorded a strong streak of surpassing earnings estimates. The company has topped estimates by 14.72%, on average, in the last two quarters. For the last reported quarter, Paycom came out with earnings of $2.78 per share versus the Zacks Consensus Estimate of $2.28 per share, representing a surprise of 21.93%. For the previous quarter, the company was expected to post earnings of $2.93 per share and it actually produced earnings of $3.15 per share, delivering a surprise of 7.51%. Thanks in part to this history, there has been a favorable change in earnings estimates for Paycom lately. In fact, the Zacks Earnings ESP (Expected Surprise Prediction) for the stock is positive, which is a great indicator of an earnings beat, particularly when combined with its solid Zacks Rank. Our research shows that stocks with the combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or better produce a positive surprise nearly 70% of the time. In other words, if you have 10 stocks with this combination, the number of stocks that beat the consensus estimate could be as high as seven. The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a version of the Zacks Consensus whose definition is related to change. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier. Paycom has an Earnings ESP of +4.01% at the moment, suggesting that analysts have grown bullish on its near-term earnings potential. When you combine this positive Earnings ESP with the stock's Zacks Rank #3 (Hold), it shows that another beat is possibly around the corner. When the Earnings ESP comes up negative, investors should note that this will reduce the predictive power of the metric. But, a negative value is not indicative of a stock's earnings miss. Many companies end up beating the consensus EPS estimate, but that may not be the sole basis for their stocks moving higher. On the other hand, some stocks may hold their ground even if they end up missing the consensus estimate. Because of this, it's really important to check a company's Earnings ESP ahead of its quarterly release to increase the odds of success. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported. 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

Paychex (NASDAQ:PAYX) is set to report its earnings on Wednesday, September 23, 2026. The company has $41 billion in current market capitalization. Revenue over the last twelve months was $6.5 billion, and it was operationally profitable with $2.5 billion in operating profits and net income of $1.8 billion. While the post-earnings stock reaction will depend on how the results and outlook stack up against investor expectations, a detailed look at historical results can aid you if you are an event-driven trader. Here is how: either understand the historical odds and position yourself prior to the earnings announcement, or look at the correlation between immediate and medium-term returns post earnings and enter a trade one day after the announcement. See earnings reaction history of all stocks Ask yourself - Is holding PAYX stock risky? Of course it is. The Trefis High Quality Portfolio mitigates that risk. Paychex's Historical Odds Of Positive Post-Earnings Return Some observations on one-day (1D) post-earnings returns: There are 20 earnings data points recorded over the last five years, with 11 positive and 9 negative one-day (1D) returns observed. In summary, positive 1D returns were seen about 55% of the time. However, this percentage decreases to 50% if we consider data for the last 3 years instead of 5. Median of the 11 positive returns = 3.6%, and median of the 9 negative returns = -2.3% Additional data for observed 5-Day (5D) and 21-Day (21D) returns post earnings are summarized along with the statistics in the table below. Correlation Between 1D, 5D, and 21D Historical Returns A relatively less risky strategy (though not useful if the correlation is low) is to understand the correlation between short-term and medium-term returns post earnings, find a pair that has the highest correlation, and execute the appropriate trade. For example, 1D_21D shows the strongest correlation here, and it is negative: if the 1D post-earnings return is positive, a trader can position themselves in the opposite direction over the following 21D window. Here is some correlation data based on a 5-year and a 3-year (more recent) history. Note that these correlations are between subsequent windows, not the cumulative columns above: 1D_5D is the correlation between the 1D post-earnings return and the subsequent return from day 1 through day 5, 1D_21D is between the 1D return and the subsequent return from day 1 through day 21, and 5D_21D is between the 5D return and the subsequent return from day 5 through day 21. Is There Any Correlation With Peer Earnings? Sometimes, peer performance can have an influence on post-earnings stock reaction. Some of that pricing-in may even begin before the earnings are announced. Here is some historical data on the past post-earnings performance of Paychex stock compared with the stock performance of INTU, a peer that reported earnings just before Paychex. For fair comparison, peer stock returns also represent post-earnings one-day (1D) returns. Separately, if you want an upside with a smoother ride than an individual stock such as PAYX, consider the Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, which has a track record of comfortably outperforming its benchmark that includes all three - the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.

The end of the earnings season is always a good time to take a step back and see who shined (and who didn’t). Let’s take a look at how HR software stocks fared in Q2, starting with Paycom (NYSE:PAYC). Modern HR software has two powerful benefits: cost savings and ease of use. For cost savings, businesses large and small much prefer the flexibility of cloud-based, web-browser-delivered software paid for on a subscription basis rather than the hassle and complexity of purchasing and managing on-premise enterprise software. On the usability side, the consumerization of business software creates seamless experiences whereby multiple standalone processes like payroll processing and compliance are aggregated into a single, easy-to-use platform. The 4 HR software stocks we track reported a satisfactory Q2. As a group, revenues beat analysts’ consensus estimates by 1.7% while next quarter’s revenue guidance was in line. Luckily, HR software stocks have performed well with share prices up 10.8% on average since the latest earnings results. Pioneering the concept of employees doing their own payroll with its "Beti" technology, Paycom (NYSE:PAYC) provides cloud-based human capital management software that helps businesses manage the entire employment lifecycle from recruitment to retirement. Paycom reported revenues of $531.2 million, up 9.8% year on year. This print exceeded analysts’ expectations by 3.5%. Overall, it was a very strong quarter for the company with full-year EBITDA guidance exceeding analysts’ expectations and a solid beat of analysts’ billings estimates. Paycom achieved the biggest analyst estimate beat and highest full-year guidance raise, but had the slowest revenue growth among its peers. Unsurprisingly, the stock is up 25.3% since reporting and currently trades at $218.96. Is now the time to buy Paycom? Access our full analysis of the earnings results here, it’s free. Operating in a field where companies traditionally juggled multiple disconnected systems, Paylocity (NASDAQ:PCTY) provides cloud-based human capital management and payroll software solutions that help businesses manage their workforce and HR processes. Paylocity reported revenues of $444.7 million, up 11% year on year, outperforming analysts’ expectations by 3.1%. The business had a strong quarter with an impressive beat of analysts’ adjusted operating income estimates and EBITDA guidance for next quarter beating analysts’ expectations. Paylocity delivered the highest guidance raise of the whole group. Although it had a fine quarter compared to its peers, the market seems unhappy with the results as the stock is down 1.1% since reporting. It currently trades at $141.75. Is now the time to buy Paylocity? Access our full analysis of the earnings results here, it’s free. Operating in the often-overlooked smaller metropolitan markets where HR expertise can be scarce, Asure Software (NASDAQ:ASUR) provides cloud-based human capital management software and services that help small and medium-sized businesses manage payroll, taxes, time tracking, and HR compliance. Asure Software reported revenues of $37.11 million, up 23.2% year on year, in line with analysts’ expectations. It was a slower quarter as it posted a significant miss of analysts’ billings estimates. Asure Software delivered the fastest revenue growth but had the weakest performance against analyst estimates and weakest guidance update in the group. The stock is flat since the results and currently trades at $8.44. Read our full analysis of Asure Software’s results here. Once known as the go-to service for small business payroll needs, Paychex (NASDAQ:PAYX) provides payroll processing, HR services, employee benefits administration, and insurance solutions to small and medium-sized businesses. Paychex reported revenues of $1.61 billion, up 12.5% year on year. This print was in line with analysts’ expectations. It was a satisfactory quarter as it also logged a decent beat of analysts’ adjusted operating income estimates. The stock is up 18.2% since reporting and currently trades at $115.83. Read our full, actionable report on Paychex here, it’s free. Over the past year, investors have been forced to repeatedly answer the same question: what is the market’s biggest risk? The answer has changed several times, and each shift has reshaped market leadership. Late in 2025 and early 2026, artificial intelligence became the market’s primary uncertainty. Investors questioned whether AI would erode software pricing power and weaken competitive moats as AI made it easier to replicate once-differentiated products. By the spring, technology took a back seat to geopolitics. The U.S. conflict with Iran briefly became the market’s dominant narrative, raising concerns about oil prices, inflation, and global growth. But as energy markets remained orderly and fears of a prolonged supply disruption faded, investors quickly turned their focus back to fundamentals. Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Quality Compounder Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

NEW YORK, Sept. 14, 2026 /PRNewswire/ -- Fred Alger Management, LLC ("Alger"), a privately held growth equity investment manager, today announced the quarterly rebalancing of the Alger Russell Innovation Index ("Index"). Following the close of trading on Friday, September 18, 2026, the Index will be rebalanced, and the following changes will be effective. For additional information, please visit www.lseg.com. Unlock Your Growth Potential with AlgerFounded in 1964, Alger is recognized as a pioneer of growth-style investment management. Privately-owned and headquartered in New York City, Alger can help "Unlock Your Growth Potential" through a suite of growth equity separate accounts, mutual funds, ETFs, and privately offered investment vehicles. Alger's investment philosophy, discovering companies undergoing Positive Dynamic Change, has been in place for more than 60 years. For more information, please visit www.alger.com. Risk Disclosures: Investing in the stock market involves risks, including the potential loss of principal. Growth stocks may be more volatile than other stocks as their prices tend to be higher in relation to their companies' earnings and may be more sensitive to market, political, and economic developments. This material is not meant to provide investment advice and should not be considered a recommendation to purchase or sell securities. Alger pays compensation to third party marketers to sell various strategies to prospective investors. London Stock Exchange Group plc and its group undertakings (collectively, the "LSE Group"). © LSE Group 2026. FTSE Russell is a trading name of certain of the LSE Group companies. "FTSE®" "Russell®", "FTSE Russell®" are trade marks of the relevant LSE Group companies and are used by any other LSE Group company under license. All rights in the FTSE Russell indexes or data vest in the relevant LSE Group company which owns the index or the data. Neither LSE Group nor its licensors accept any liability for any errors or omissions in the indexes or data and no party may rely on any indexes or data contained in this communication. No further distribution of data from the LSE Group is permitted without the relevant LSE Group company's express written consent. The LSE Group does not promote, sponsor or endorse the content of this communication. View original content to download multimedia:https://www.prnewswire.com/news-releases/alger-russell-innovation-index-updates-for-third-quarter-2026-302877884.html

Earlier in the second quarter of 2026, Paycom Software reported earnings and revenue that came in ahead of expectations and raised its full-year 2026 guidance for both total revenues and adjusted EBITDA. This combination of outperformance and upgraded outlook has reinforced the market’s focus on Paycom’s operating momentum, execution, and management’s confidence in the business. Now, we’ll explore how Paycom’s stronger-than-expected quarter and higher full-year guidance affect the existing investment narrative around AI-driven automation. Uncover the next big thing with 22 elite penny stocks that balance risk and reward. To own Paycom, you need to believe AI driven automation like IWant can deepen client engagement across its HCM platform without crushing margins. The latest earnings beat and higher 2026 guidance support that thesis in the near term, but they do not remove the key risk that rising AI infrastructure spending and competitive offerings could still pressure pricing power and free cash flow if adoption or differentiation stalls. One of the clearest signals tied to this quarter is Paycom’s aggressive share repurchase activity, with about US$344.5 million spent on buybacks in a recent tranche. That capital return, on top of consistent US$0.375 quarterly dividends, sits beside the upgraded guidance and highlights how management is balancing reinvestment in AI with shrinking the share count, a combination that can amplify both the upside from successful automation and the downside if growth or margins disappoint. Yet beneath the strong quarter, the risk that AI infrastructure costs could rise faster than expected is something investors should really understand before they... 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. Uncover how Paycom Software's forecasts yield a $151.44 fair value, a 35% downside to its current price. Before this strong quarter, the most pessimistic analysts were assuming only about US$2.6 billion of revenue and roughly US$537.9 million of earnings by 2029, so their concerns about rising AI infrastructure costs and slower margin expansion show how differently you might view the same business and why it is worth weighing several viewpoints before deciding what this latest beat and guidance hike really mean. Explore 6 other fair value estimates on Paycom Software - why the stock might be worth 35% 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 2 important warning signs 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. Early movers are already taking notice. See the stocks they're targeting before they've flown the coop: Find 47 companies with promising cash flow potential yet trading below their fair value. This technology could replace computers: discover 25 stocks that are working to make quantum computing a reality. Rare earth metals are the new gold rush. Find out which 31 stocks are leading the charge. 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 (PAYC) is back in focus after its second quarter 2026 report beat earnings and revenue estimates, and management raised full year guidance for total revenue and adjusted EBITDA. Despite the earnings beat and higher guidance, Paycom Software’s recent trading has cooled, with the share price down 3.68% over the last day and 2.88% over the past week, even after a 30 day share price return of 32.53% and a 90 day gain of 68.34% from US$231.67. Compare Paycom Software’s surge in guidance with other fast growing, cash generative businesses by scanning the hand picked 19 high quality undiscovered gems now shaping the next wave of market leaders. Bulls point to Paycom Software’s stronger guidance and recent rally. Bears flag the mixed share price history and recent pullback. The key question is which case the current valuation and cash generation profile supports next. Paycom Software’s most followed narrative pegs fair value at $151.44 using a 7.55% discount rate, well below the last close at $231.67. This sets up a clear valuation gap for investors to test. Read the complete narrative. Want to understand why this narrative still assigns a lower fair value to Paycom Software than today’s price? The entire case leans on measured revenue growth, steady margin assumptions, and a future earnings multiple that sits below many peers. Curious which of those inputs has the biggest impact on that $151.44 figure and how small tweaks could change the outcome. Result: Fair Value of $151.44 (OVERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, Paycom Software still faces risks around potential AI commoditization and a securities class action that could influence sentiment if outcomes or costs differ from current expectations. Find out about the key risks to this Paycom Software narrative. The analyst narrative describes Paycom Software as 53% overvalued at a fair value estimate of $151.44. The SWS DCF model presents a different view, with a future cash flow value of $460.06 and the stock trading at a 49.6% discount. Consider which perspective better aligns with the level of risk you are willing to take. Look into how the SWS DCF model arrives at its fair value. Does the split sentiment around Paycom Software leave you uncertain about what matters most? Consider reviewing the numbers yourself and weighing both sides with the help of 4 key rewards and 2 important warning signs. Do not stop with Paycom Software. Use the Simply Wall St screener to spot other opportunities that fit your style before the market prices them in. Target stability and growth potential by reviewing companies with resilient finances and dependable track records through the 82 resilient stocks with low risk scores. Zero in on quality at a sensible price by scanning the 47 high quality undervalued stocks that combine strong fundamentals with attractive valuations. Strengthen your income stream by checking out the 11 dividend fortresses that focus on higher yielding companies with solid fundamentals. 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]

It has been about a month since the last earnings report for Paycom Software (PAYC). Shares have added about 11.4% in that time frame, outperforming the S&P 500. Will the recent positive trend continue leading up to its next earnings release, or is Paycom due for a pullback? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent catalysts for Paycom Software, Inc. before we dive into how investors and analysts have reacted as of late. Paycom 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’s Recurring and other 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 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 company projects recurring and other 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 adjusted EBITDA margin of approximately 46% at the midpoint, up from the earlier guided range of $950 million to $970 million. In the past month, investors have witnessed a upward trend in estimates review. The consensus estimate has shifted 20.03% due to these changes. At this time, Paycom has a average Growth Score of C, a score with the same score on the momentum front. Following the exact same course, the stock was allocated a score of C on the value side, putting it in the middle 20% for this investment strategy. Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in. Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Paycom has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months. Paycom is part of the Zacks Internet - Software industry. Over the past month, EverQuote (EVER), a stock from the same industry, has gained 6.3%. The company reported its results for the quarter ended June 2026 more than a month ago. EverQuote reported revenues of $195.09 million in the last reported quarter, representing a year-over-year change of +24.6%. EPS of $0.65 for the same period compares with $0.39 a year ago. EverQuote is expected to post earnings of $0.67 per share for the current quarter, representing a year-over-year change of +34%. Over the last 30 days, the Zacks Consensus Estimate has changed +24.4%. EverQuote has a Zacks Rank #4 (Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A. 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 EverQuote, Inc. (EVER) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

PAYC provides enterprises with cloud-based software for human resources management, offering data and analytics to manage the full employment cycle. The company’s second-quarter 2026 report showed revenue of $531 million (a 10% year-over-year gain), GAAP net income of $107 million or $2.34 per diluted share (a 20% jump), returned $346 million to shareholders through repurchases, and increased full-year revenue and adjusted EBITDA guidance to a high end of $2.212 billion and $1.022 billion, respectively. It’s no wonder PAYC shares are up 51% this year – and they could rise more. MoneyFlows data shows how Big Money investors are once again betting heavily on the forward picture of the stock. Institutional volumes reveal plenty. So far in 2026, PAYC has enjoyed strong investor demand, which we believe to be institutional support. Each green bar signals unusually large volumes in PAYC shares. They reflect our proprietary inflow signal, pushing the stock higher: Plenty of technology names are under accumulation right now. But there’s a powerful fundamental story happening with Paycom. Institutional support and a healthy fundamental backdrop make this company worth investigating. As you can see, PAYC has had strong sales and earnings growth: 3-year sales growth rate (+14.4%) 3-year EPS growth rate (+21.3%) Source: FactSet Also, EPS is estimated to ramp higher this year by +15.5%. Now it makes sense why the stock has been generating Big Money interest again. PAYC has a track record of strong financial performance. Marrying great fundamentals with our proprietary software has found some big winning stocks over the long term. Paycom has been a top-rated stock at MoneyFlows. That means the stock has unusual buy pressure and growing fundamentals. We have a ranking process that showcases stocks like this on a weekly basis. It’s made the rare Outlier 20 report 63 times since 2015, gaining 560% in that time. The blue bars below show when PAYC was a top pick this year…institutions are still buying: Tracking unusual volumes reveals the power of money flows. This is a trait that most outlier stocks exhibit…the best of the best. Big Money demand drives stocks upward. The PAYC revival isn’t new at all. Big Money buying in the shares is signaling to take notice. Given the historical gains in share price and strong fundamentals, this stock could be worth a spot in a diversified portfolio. Disclosure: the author holds long positions in PAYC in personal and managed accounts at the time of publication. If you are a Registered Investment Advisor (RIA) or a serious investor, take your investing to the next level. MoneyFlows created 11 Frontiers indexes to help serious investors capture AI-driven themes and learn the leading stocks in each Frontier. Get started here. This article was originally posted on FX Empire EUR/USD, USD/JPY, & USD/CAD Short-Term Forecasts for 04/09/2026 Earnings Beat, Raised Guidance Send Paycom Shares Higher Blowout Guidance Sends SharkNinja Shares Higher Uniswap Price Breakout Puts 90% Rally Toward $11.50 in Play XLV, XLK and MOO Forecast: Agriculture ETF Breaks Out Solana Price Eyes $120 as ETF Inflows Extend Bullish Streak

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. 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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.