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

Paycom Software (NYSE:PAYC) posted its quarterly earnings results on Wednesday. The software maker reported $2.78 EPS for the quarter, topping analysts’ consensus estimates of $2.38 by $0.40, FiscalAI reports. Paycom Software had a net margin of 22.78% and a return on equity of 31.53%. The company had revenue of $531.20 million for the quarter, compared to analysts’ expectations of $513.12 million. During the same quarter in the previous year, the firm posted $2.06 EPS. Paycom Software’s revenue was up 9.8% on a year-over-year basis.

Here are the key takeaways from Paycom Software’s conference call:

• Paycom reported Q2 revenue of $531 million, up 10% year over year, while adjusted EBITDA rose to $235 million, with a 44.2% margin that expanded 320 basis points. Management said results were broad-based and exceeded expectations.
• The company raised its 2026 outlook, now forecasting revenue of $2.197 billion-$2.212 billion and adjusted EBITDA of $1.007 billion-$1.022 billion, implying a record 46% margin at the midpoint. Paycom also expects 2026 free cash flow to exceed $650 million.
• Management highlighted continued operating efficiencies from automation, including lower labor and process costs, while investments in internally hosted AI models are expected to generate roughly $100 million in R&D savings and at least $30 million in reduced third-party response fees this year.
• Paycom repurchased approximately 2.6 million shares for $346 million during the quarter and nearly 11 million shares for $1.4 billion in the first half, reducing shares outstanding by 20%. The company ended the quarter with $1.66 billion remaining under its buyback authorization and approved a quarterly dividend of $0.375 per share.
• Product momentum remains a key strategic focus: Project Arc improved customization and scalability, while career and succession planning and the newly launched Asset Management solution are receiving positive early client feedback. Management expects these newer products to contribute more meaningfully over time, though their impact on Q2 was limited.

Paycom Software Price Performance

Shares of Paycom Software stock traded down $1.01 during trading on Friday, hitting $214.96. The stock had a trading volume of 841,519 shares, compared to its average volume of 1,353,914. The company has a current ratio of 1.08, a quick ratio of 1.08 and a debt-to-equity ratio of 0.83. Paycom Software has a 12 month low of $104.90 and a 12 month high of $234.60. The firm has a market cap of $10.24 billion, a price-to-earnings ratio of 22.83, a P/E/G ratio of 1.48 and a beta of 0.76. The business’s 50-day moving average is $143.00 and its 200 day moving average is $134.13.

Paycom Software Dividend Announcement

The company also recently declared a quarterly dividend, which will be paid on Tuesday, September 8th. Stockholders of record on Monday, August 24th will be issued a $0.375 dividend. The ex-dividend date of this dividend is Monday, August 24th. This represents a $1.50 annualized dividend and a dividend yield of 0.7%. Paycom Software’s dividend payout ratio is presently 17.34%.

Wall Street Analyst Weigh In

A number of brokerages have recently commented on PAYC. Cantor Fitzgerald upped their price target on Paycom Software from $135.00 to $195.00 and gave the company a “neutral” rating in a research report on Thursday. Barclays boosted their price objective on Paycom Software from $154.00 to $210.00 and gave the company an “equal weight” rating in a research note on Thursday. UBS Group increased their target price on shares of Paycom Software from $195.00 to $205.00 and gave the stock a “buy” rating in a research report on Thursday. Stifel Nicolaus lifted their target price on shares of Paycom Software from $120.00 to $200.00 and gave the stock a “hold” rating in a research note on Thursday. Finally, BMO Capital Markets boosted their price target on shares of Paycom Software from $145.00 to $208.00 and gave the company a “market perform” rating in a research report on Thursday. One analyst has rated the stock with a Strong Buy rating, five have assigned a Buy rating and nine have assigned a Hold rating to the stock. According to MarketBeat.com, the company has an average rating of “Hold” and an average target price of $200.23.

Hedge Funds Weigh In On Paycom Software

A number of institutional investors have recently made changes to their positions in the stock. Brown Brothers Harriman & Co. raised its position in Paycom Software by 190.6% in the 4th quarter. Brown Brothers Harriman & Co. now owns 154 shares of the software maker’s stock worth $25,000 after purchasing an additional 101 shares during the period. CYBER HORNET ETFs LLC bought a new position in shares of Paycom Software during the second quarter valued at about $29,000. Palisade Asset Management LLC purchased a new position in shares of Paycom Software in the third quarter worth about $33,000. MUFG Securities EMEA plc bought a new stake in shares of Paycom Software in the 2nd quarter valued at about $33,000. Finally, EverSource Wealth Advisors LLC boosted its holdings in Paycom Software by 62.6% during the 2nd quarter. EverSource Wealth Advisors LLC now owns 304 shares of the software maker’s stock valued at $70,000 after acquiring an additional 117 shares during the period. Institutional investors own 87.77% of the company’s stock.

Paycom Software News Roundup

Here are the key news stories impacting Paycom Software this week:

• Positive Sentiment: Strong Q2 results: Paycom reported adjusted earnings of $2.78 per share, ahead of the $2.38 consensus estimate, while revenue rose 9.8% year over year to $531.2 million, exceeding expectations of $513.1 million. Recurring sales growth and expanding margins supported the result. Paycom Q2 earnings article
• Positive Sentiment: Higher 2026 guidance: Management raised its full-year revenue outlook to $2.197 billion-$2.212 billion and adjusted EBITDA guidance to $1.007 billion-$1.022 billion. The company expects free cash flow above $650 million, helped by automation and internally developed AI tools. Paycom forecasts higher 2026 outlook
• Positive Sentiment: Automation and capital returns: Paycom said automation is reducing operating costs while new product expansion and AI-driven employee-management services are supporting demand. It also repurchased approximately 2.57 million shares for $345.9 million during the quarter, potentially boosting per-share results. Reuters Paycom forecast article
• Positive Sentiment: Analyst target increases: TD Cowen raised its target to $244 with a Buy rating, KeyCorp lifted its target to $270 with an Overweight rating, and BTIG increased its target to $230 with a Buy rating. Analyst target increases
• Neutral Sentiment: Valuation debate: Barclays, BMO Capital Markets, Stifel and Cantor Fitzgerald raised their targets but maintained equal-weight, market-perform, hold or neutral ratings, suggesting the strong rally has already priced in much of the improved outlook.
• Negative Sentiment: Some targets remain below the market: UBS raised its target to $205 while retaining a Buy rating, leaving its target below the recent trading level. This may encourage profit-taking after the post-earnings surge.

Paycom Software Company Profile

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.