olivLaw · US equity research
Paycom Software, Inc. PAYC
Services-Prepackaged Software · SIC 7372 · Vertical: Services-Prepackaged Software (SIC 7372)
Paycom Software provides a SaaS human capital management platform covering the full employee lifecycle from recruitment to retirement on a single database. Total revenue grew 9.8% in the second quarter of 2026, and the company raised its full-year outlook, while automation and artificial intelligence are becoming its main differentiators.
The AI analysis may be outdated: new filings came after its sources (see the «AI analysis» section).
At the close of 04 Nov 2026, Paycom Software, Inc. (PAYC) stock was 268.16 USD (+1.97% on the day), with market capitalisation 12.1 bn USD, P/E 28.5 on diluted EPS of 9.40 USD over the last 12 months, dividend yield 0.42%, beta 0.69, 52-week range 113.59–274.59 USD. Latest reported quarter (Q2 2026): revenue of 531.2 m USD (+9.8% YoY), net income of 107.4 m USD (+20.0% YoY), diluted EPS 2.34 USD.
Data as of · AI analysis dated · Source: SEC filings and closing prices, computed by olivLaw.
Price history
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Technical reading
- RSI (14)
- 66.9
- strong (55–70)
- Bollinger (20, 2)
- 228.62 – 282.97
- in the upper half of the band · %B 0.73 · band width 21.2%
- SMA 50 / 200
- 237.99 / 165.61
- uptrend (price > SMA50 > SMA200)
- MACD (12, 26, 9)
- 9.92 / 10.35
- MACD below signal
Indicators describe past prices; on their own they do not predict direction. On our history the RSI ≤ 40 filter added no return (see the signals methodology).
Performance
| Company | S&P 500 | vs S&P 500 | Vertical median | |
|---|---|---|---|---|
| 1 month | +18.8% | −1.1% | +19.9 pp | — |
| 3 months | +53.4% | −0.5% | +53.9 pp | — |
| 6 months | +112.2% | +4.4% | +107.8 pp | — |
| Year to date | +68.3% | +12.3% | +56.0 pp | — |
| 1 year | +47.4% | +13.5% | +33.9 pp | −1.8% |
| 3 years | +68.6% | +76.4% | −7.8 pp | +36.7% |
| 5 years | −46.8% | +63.7% | −110.5 pp | — |
Price returns, dividends excluded.
Quarterly results
Latest quarter: Q2 2026 · 30 Jun 2026
Quarterly margins
Quarterly statements · USD
| Fiscal year | Q3 '24 | Q4 '24 | Q1 '25 | Q2 '25 | Q3 '25 | Q4 '25 | Q1 '26 | Q2 '26 |
|---|---|---|---|---|---|---|---|---|
| Revenue | 451.9 m | 493.9 m | 530.5 m | 483.6 m | 493.3 m | 544.3 m | 571.9 m | 531.2 m |
| Cost of revenue | 88.4 m | 83.7 m | 84.6 m | 87.5 m | 85.4 m | 87.8 m | 87.3 m | 89.1 m |
| Gross profit | 363.6 m | 410.1 m | 445.9 m | 396.1 m | 407.9 m | 456.5 m | 484.5 m | 442.1 m |
| Research & development | 63.0 m | 66.7 m | 62.3 m | 74.8 m | 74.1 m | 72.2 m | 60.7 m | 51.9 m |
| SG&A | 258.7 m | 261.7 m | 260.8 m | 283.8 m | 295.3 m | 299.4 m | 274.3 m | 273.6 m |
| Operating income | 104.9 m | 148.5 m | 185.1 m | 112.3 m | 112.6 m | 157.1 m | 210.2 m | 168.5 m |
| Depreciation & amortisation | 20.5 m | 39.7 m | 39.9 m | 22.8 m | 23.6 m | 49.4 m | 51.1 m | 25.6 m |
| Interest expense | 800.0 k | 1.0 m | 800.0 k | 800.0 k | 1.1 m | 700.0 k | 4.0 m | 10.5 m |
| Pre-tax income | 108.3 m | 151.5 m | 190.3 m | 117.2 m | 152.8 m | 159.1 m | 215.3 m | 156.9 m |
| Income tax | 35.0 m | 37.9 m | 50.9 m | 27.7 m | 42.1 m | 45.3 m | 59.5 m | 49.5 m |
| Net income | 73.3 m | 113.6 m | 139.4 m | 89.5 m | 110.7 m | 113.8 m | 155.7 m | 107.4 m |
| Diluted EPS | 1.31 | 2.03 ≈ | 2.48 | 1.58 | 1.96 | 2.06 ≈ | 3.04 | 2.34 |
| Operating cash flow | 92.8 m ≈ | 160.4 m | 182.5 m | 122.5 m ≈ | 177.8 m ≈ | 196.1 m | 213.8 m | 213.8 m ≈ |
| Capex | 48.2 m ≈ | 51.4 m | 37.7 m | 61.7 m ≈ | 98.0 m ≈ | 73.5 m | 31.2 m | 23.7 m ≈ |
| Dividends paid | 21.3 m ≈ | 21.1 m | 21.1 m | 21.8 m ≈ | 21.2 m ≈ | 20.7 m | 17.7 m | 17.8 m ≈ |
| Share repurchases | 42.0 m ≈ | 0 | — | — | — | 106.6 m | 1.1 bn | 335.4 m ≈ |
≈ derived quarter (cumulative difference / share-days average)
E/P over time
E/P = trailing-12-month diluted EPS / price at quarter end. E/P is the inverse of P/E and stays defined when earnings are negative.
Today's P/E sits at the 21 percentile of its own 39-quarter history (min 13.4, median 59.0, max 183.8; quarters with earnings only).
Fiscal years
| Fiscal year | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|
| Revenue | 566.3 m | 737.7 m | 841.4 m | 1.1 bn | 1.4 bn | 1.7 bn | 1.9 bn | 2.1 bn |
| Revenue YoY | +30.8% | +30.3% | +14.1% | +25.4% | +30.3% | +23.2% | +11.2% | +8.9% |
| Net income | 137.1 m | 180.6 m | 143.5 m | 196.0 m | 281.4 m | 340.8 m | 502.0 m | 453.4 m |
| Net income YoY | +11.0% | +31.7% | −20.6% | +36.6% | +43.6% | +21.1% | +47.3% | −9.7% |
| Diluted EPS | 2.34 | 3.09 | 2.46 | 3.37 | 4.84 | 5.88 | 8.92 | 8.08 |
| Diluted EPS YoY | +11.4% | +32.1% | −20.4% | +37.0% | +43.6% | +21.5% | +51.7% | −9.4% |
| net % | 24.2% | 24.5% | 17.0% | 18.6% | 20.5% | 20.1% | 26.7% | 22.1% |
| Free cash flow | 124.9 m | 131.3 m | 133.1 m | 198.7 m | 232.4 m | 292.4 m | 341.0 m | 408.0 m |
Reported results vs expectations
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Balance sheet & financial health
Fiscal year 2025 · 31 Dec 2025
- Cash
- 370.0 m USD
- Financial debt
- unavailable USD
- Net debt
- unavailable USD
- Equity
- 1.7 bn USD
- Total assets
- 7.6 bn USD
- Debt / equity
- unavailable
- Current ratio
- 1.09x
- ROE
- 27.4%
- ROA
- 6.7%
- FCF margin
- 19.9%
Financial statements (source on every figure)
Revenue and net income (USD)
Margins
Income statement · USD
| Line | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | Source (latest year) |
|---|---|---|---|---|---|---|---|
| Revenue | 841.4 m | 1.1 bn | 1.4 bn | 1.7 bn | 1.9 bn | 2.1 bn | SEC (XBRL)· 19 Feb 2026verified |
| Cost of revenue | 123.5 m | 161.9 m | 212.7 m | 276.3 m | 334.6 m | 345.4 m | SEC (XBRL)· 19 Feb 2026verified |
| Gross profit | 717.9 m ≈ | 893.6 m ≈ | 1.2 bn | 1.4 bn | 1.5 bn | 1.7 bn | SEC (XBRL)· 19 Feb 2026verified |
| Research & development | 90.2 m | 118.4 m | 148.3 m | 199.0 m | 242.6 m | 283.4 m | SEC (XBRL)· 19 Feb 2026verified |
| SG&A | 531.8 m | 640.1 m | 783.8 m | 966.1 m | 914.3 m | 1.1 bn | SEC (XBRL)· 19 Feb 2026verified |
| Operating income | 186.1 m | 253.6 m | 378.7 m | 451.3 m | 634.3 m | 567.2 m | SEC (XBRL)· 19 Feb 2026verified |
| Depreciation & amortisation | 53.4 m | 67.2 m | 92.7 m | 113.9 m | 145.9 m | 176.3 m | SEC (XBRL)· 19 Feb 2026verified |
| EBITDA | 239.5 m ≈ | 320.8 m ≈ | 471.4 m ≈ | 565.2 m ≈ | 780.2 m ≈ | 743.5 m ≈ | SEC (XBRL)· 19 Feb 2026derived |
| Interest expense | 19.0 k | 1.4 m | 2.5 m | 1.9 m | 3.4 m | 3.4 m | SEC (XBRL)· 19 Feb 2026verified |
| Pre-tax income | 185.9 m | 256.0 m | 389.6 m | 472.4 m | 649.0 m | 619.4 m | SEC (XBRL)· 19 Feb 2026verified |
| Income tax | 42.5 m | 60.0 m | 108.2 m | 131.6 m | 147.0 m | 166.0 m | SEC (XBRL)· 19 Feb 2026verified |
| Net income | 143.5 m | 196.0 m | 281.4 m | 340.8 m | 502.0 m | 453.4 m | SEC (XBRL)· 19 Feb 2026verified |
| Diluted EPS | 2.46 | 3.37 | 4.84 | 5.88 | 8.92 | 8.08 | SEC (XBRL)· 19 Feb 2026verified |
| Weighted average diluted shares | 58.3 m | 58.2 m | 58.2 m | 58.0 m | 56.3 m | 56.1 m | SEC (XBRL)· 19 Feb 2026verified |
| Dividend per share | — | — | — | 0.38 | 0.38 | 0.38 | SEC (XBRL)· 19 Feb 2026verified |
≈ computed by olivLaw from the reported lines of the same year: Revenue − Cost of revenue; Operating income + Depreciation & amortisation.
Balance sheet · USD
| Line | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | Source (latest year) |
|---|---|---|---|---|---|---|---|
| Cash | 151.7 m | 278.0 m | 400.7 m | 294.0 m | 402.0 m | 370.0 m | SEC (XBRL)· 19 Feb 2026verified |
| Receivables | 9.1 m | 9.5 m | 22.8 m | 16.4 m | 39.2 m | 44.9 m | SEC (XBRL)· 19 Feb 2026verified |
| Inventories | 1.2 m | 1.1 m | 1.6 m | 1.4 m | 1.4 m | 1.7 m | SEC (XBRL)· 19 Feb 2026verified |
| Current assets | 1.9 bn | 2.3 bn | 2.8 bn | 2.8 bn | 4.3 bn | 5.8 bn | SEC (XBRL)· 19 Feb 2026verified |
| Property, plant & equipment, net | 285.2 m | 349.0 m | 402.4 m | 498.2 m | — | — | SEC (XBRL)· 15 Feb 2024verified |
| Goodwill | 51.9 m | 51.9 m | 51.9 m | 51.9 m | 51.9 m | 51.9 m | SEC (XBRL)· 19 Feb 2026verified |
| Intangibles (excl. goodwill) | 319.0 k | 58.0 m | 54.0 m | 50.1 m | 46.2 m | 37.4 m | SEC (XBRL)· 19 Feb 2026verified |
| Total assets | 2.6 bn | 3.2 bn | 3.9 bn | 4.2 bn | 5.9 bn | 7.6 bn | SEC (XBRL)· 19 Feb 2026verified |
| Accounts payable | 6.8 m | 5.8 m | 16.1 m | 13.9 m | 23.9 m | 6.6 m | SEC (XBRL)· 19 Feb 2026verified |
| Short-term debt | 1.8 m | 1.8 m | 0 | — | — | — | SEC (XBRL)· 16 Feb 2023verified |
| Long-term debt | 29.1 m | 27.4 m | 29.0 m | — | — | — | SEC (XBRL)· 16 Feb 2023verified |
| Current liabilities | 1.7 bn | 2.0 bn | 2.4 bn | 2.5 bn | 3.9 bn | 5.4 bn | SEC (XBRL)· 19 Feb 2026verified |
| Total liabilities | 2.0 bn | 2.3 bn | 2.7 bn | 2.9 bn | 4.3 bn | 5.9 bn | SEC (XBRL)· 19 Feb 2026verified |
| Equity | 655.6 m † | 893.7 m † | 1.2 bn † | 1.3 bn † | 1.6 bn † | 1.7 bn † | SEC (XBRL)· 19 Feb 2026verified |
† equity attributable to the parent's shareholders: in these years the issuer no longer reports the total including non-controlling interests.
Cash flow · USD
| Line | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | Source (latest year) |
|---|---|---|---|---|---|---|---|
| Operating cash flow | 227.2 m | 319.4 m | 365.1 m | 485.0 m | 533.9 m | 678.9 m | SEC (XBRL)· 19 Feb 2026verified |
| Capex | 94.1 m | 120.7 m | 132.7 m | 192.6 m | 192.9 m | 270.9 m | SEC (XBRL)· 19 Feb 2026verified |
| Free cash flow | 133.1 m ≈ | 198.7 m ≈ | 232.4 m ≈ | 292.4 m ≈ | 341.0 m ≈ | 408.0 m ≈ | SEC (XBRL)· 19 Feb 2026derived |
| Investing cash flow | -117.9 m | -257.7 m | -23.3 m | -196.7 m | -22.2 m | -611.2 m | SEC (XBRL)· 19 Feb 2026verified |
| Financing cash flow | -165.9 m | 165.7 m | 254.6 m | -274.6 m | 1.1 bn | 1.0 bn | SEC (XBRL)· 19 Feb 2026verified |
| Dividends paid | — | — | — | 64.8 m | 84.8 m | 84.8 m | SEC (XBRL)· 19 Feb 2026verified |
| Share repurchases | 52.0 m | — | 94.7 m | 286.6 m | 122.8 m | 325.5 m | SEC (XBRL)· 19 Feb 2026verified |
≈ computed by olivLaw from the reported lines of the same year: Operating cash flow − Capex.
Computed indicators
Growth
Profitability
Returns
Balance sheet
Liquidity
Cash
Efficiency
Market and valuation
4 indicators that do not apply to the sector.
Valuation
olivLaw classification
Score: 69 / 100
A scoring methodology on indicators and valuation, not investment advice.
Closing price
04 Nov 2026Source: olivLaw, closing series
Market cap: 12.1 bn USD
Key indicators
Coverage and freshness
Score by group
- Balance sheet35
- Growth48
- Quality94
- Returns89
- Valuation75
Estimated value range
The combined range = the median of the valid methods' low, central and high values; it is not a probability interval and does not cover every result. Envelope of all methods: 172.20 – 393.61 USD.
Valuation assumptions are editorial choices, not measured; beta is not measured.
Method ranges (USD per share)
— — Mid · ▏ Price
Valuation methods
- DCF (discounted cash flow)205.00 – 329.04 (Mid 252.69)WACC 9.0% · starting FCFF 586.7 m USD · terminal value share of EV 75%The WACC × g sensitivity gives the method's bounds; these are not probabilities.Reverse DCF: starting growth implied by the price (fading linearly to terminal growth, everything else fixed): 16.9%
- Peers: EV/Sales202.04 – 347.85 (Mid 270.08)17 companies used · median multiple 6.0x · quartiles 4.6x – 7.7xADBE, ADSK, BBAI, CCSI, CDNS, CRM, IDAI, INTU, MSFT, NOW, PTC, RBLX, SNPS, SSNC, TTWO, TWLO, WCT
- Peers: EV/EBITDA172.20 – 393.61 (Mid 308.19)7 companies used · median multiple 18.3x · quartiles 10.6x – 23.1xADBE, ADSK, CCSI, CRM, PTC, SNPS, SSNC
Classification (SIC) comparables group by industry code, not by economic activity; the direct group is an editorial selection by activity. Members' multiples are on their own trailing twelve months, at their own latest close.
Assumptions (illustrative, editorial)
- Risk-free rate
- 4.3%
- Equity risk premium
- 5.0%
- Beta (default)
- 1.00
- Cost of equity
- 9.3%
- Terminal growth
- 2.5%
Factor scorecard
Neutral profile · Score 69/100
| Factor | Value | Score | Weight used |
|---|---|---|---|
| Gross margin · Quality | 83.7% | 100 (on a fixed band) | 11% |
| EBIT margin · Quality | 30.3% | 82 (vs peers) | 9% |
| FCF margin · Quality | 26.9% | 100 (on a fixed band) | 9% |
| Revenue CAGR 3Y · Growth | 14.3% | 57 (on a fixed band) | 17% |
| Revenue growth (YoY) · Growth | 8.9% | 31 (vs peers) | 9% |
| Net debt / EBITDA · Balance sheet | 0.9x | 54 (vs peers) | 6% |
| Current ratio · Balance sheet | 1.1x | 16 (on a fixed band) | 6% |
| EV/Sales · Valuation | 6.0x | 60 (vs peers) | 17% |
| FCF yield · Valuation | 4.8% | 95 (on a fixed band) | 13% |
| Shareholder yield (distributions) · Returns | 3.3% | 89 (on a fixed band) | 4% |
Score groups
- Balance sheet35/100 · 2/2 factors with a value
- Growth48/100 · 2/2 factors with a value
- Quality94/100 · 3/3 factors with a value
- Returns89/100 · 1/1 factors with a value
- Valuation75/100 · 2/2 factors with a value
Memo
Paycom Software, Inc. (PAYC). Latest full fiscal year: 2025; data up to 2026-06-30.
Figures computed from the financial statements: revenue 2.1 bn USD in 2025; YoY growth 8.9%; net margin 22.8%; ROE 41.1%; net debt/EBITDA 0.9x.
The estimated value range is 202.04–347.85 USD per share (median of 3 methods, agreement: high); assumptions are illustrative. Against the central value of 270.08 USD, the price of 268.16 USD leaves a potential of 0.7% (value / price − 1) and a margin of safety of 0.7% (1 − price / value). The range is the median of the methods' low, central and high values, not a probability interval.
olivLaw score 69/100, methodological classification: neutral profile (score, margin of safety and method agreement together; not a judgement of the right price). Not investment advice.
Text generated deterministically from the figures shown; no language model. Not investment advice.
What supports the thesis
- Gross margin: 83.7%
- EBIT margin: 30.3%
- FCF margin: 26.9%
- FCF yield: 4.8%
- Shareholder yield (distributions): 3.3%
What contradicts it
- Current ratio: 1.1x
Versus the vertical median
Services-Prepackaged Software (SIC 7372) · same industry (4-digit SIC) · compared with 39 companies
Multiples and returns vs the median
Price rebased to 100 (monthly, 5 years)
Companies in the vertical
| Market cap | P/E | ROE | Net margin | Revenue YoY | 1A / 3A | |
|---|---|---|---|---|---|---|
| MSFTMicrosoft Corporation | 4,127.5 bn | 29.0 | 34.2% | 41.2% | +17.8% | +13% / +47% |
| PLTRPalantir Technologies Inc. | 413.7 bn | 120.4 | 41.2% | 50.3% | +56.2% | +2% / +756% |
| ORCLOracle Corporation | 374.1 bn | 19.3 | 41.6% | 26.4% | +17.3% | −39% / +6% |
| CRWDCrowdStrike Holdings, Inc. | 246.8 bn | 1,120.4 | 1.3% | 1.1% | +21.7% | +89% / +307% |
| CRMSalesforce, Inc. | 186.9 bn | 20.7 | 19.4% | 22.0% | +9.6% | −1% / −10% |
| NOWServicenow, Inc. | 112.9 bn | 78.1 | 11.8% | 9.4% | +20.9% | −33% / −21% |
| SNOWSnowflake Inc. | 102.5 bn | — | -48.2% | -20.1% | +29.2% | +16% / +55% |
| ADBEAdobe Inc. | 96.7 bn | 13.9 | 61.9% | 28.0% | +10.5% | −22% / −59% |
| INTUIntuit Inc. | 95.3 bn | 21.7 | 23.6% | 21.3% | +13.9% | −44% / −38% |
| CDNSCadence Design Systems, Inc. | 90.4 bn | 65.5 | 22.9% | 22.5% | +14.1% | +6% / +21% |
| SNPSSynopsys Inc | 88.7 bn | 81.8 | 3.7% | 11.4% | +15.1% | +11% / −15% |
| ADSKAutodesk, Inc. | 56.4 bn | 35.0 | 53.9% | 21.1% | +17.5% | −11% / +24% |
| VEEVVeeva Systems Inc. | 50.3 bn | 50.8 | 14.4% | 29.3% | +16.3% | +29% / +78% |
| TTWOTake-Two Interactive Software, Inc. | 39.1 bn | — | -9.0% | -4.8% | +18.2% | −15% / +32% |
| KCKingsoft Cloud Holdings Ltd | 36.3 bn | — | -13.1% | -9.8% | +28.2% | −34% / +85% |
| RBLXRoblox Corporation | 35.3 bn | — | -478.2% | -16.5% | +35.8% | −48% / +25% |
| TWLOTwilio Inc. | 33.0 bn | 26.8 | 14.9% | 21.8% | +13.7% | +65% / +230% |
| MDBMongodb, Inc. | 26.5 bn | 449.1 | 2.0% | 2.1% | +22.8% | −1% / −21% |
| PTCPTC Inc. | 21.2 bn | 19.0 | 35.1% | 41.4% | +19.2% | +11% / +24% |
| UUnity Software Inc. | 18.7 bn | — | -18.9% | -29.0% | +2.0% | −0% / +44% |
| SSNCSs&C Technologies Holdings, Inc. | 18.7 bn | 22.9 | 12.7% | 13.2% | +6.6% | −7% / +41% |
| NTNXNutanix, Inc. | 17.2 bn | 12.3 | 37,460.2% | 52.8% | +12.4% | +33% / +48% |
| TYLTyler Technologies, Inc. | 16.8 bn | 53.3 | 10.5% | 13.5% | +9.1% | −10% / +4% |
| DOCUDocusign, Inc. | 15.0 bn | 49.1 | 17.8% | 9.8% | +8.2% | +16% / +87% |
| GWREGuidewire Software, Inc. | 14.0 bn | 104.7 | 10.5% | 9.4% | +22.7% | −21% / +71% |
1- and 3-year price returns: for PAYC from daily closes (the same as the performance table), for the other companies from month-end closes.
olivLaw engine forecast
The world engine ran after the company's latest material disclosure. Probabilities are of TOUCHING a level within the horizon (not closing there) and sit next to the random walk (p_rw), the no-information benchmark.
The engine has no published run for this company yet.
Valuation scenarios (editable assumptions)
Illustrative scenarios
Illustrative: not forecasts and without probabilities. Each case is one coherent set of assumptions, computed on today's figures.
Estimated price (USD)
| Estimated price | Bear | Base | Bull |
|---|---|---|---|
| 1 years | 200.39 Total return -25% · Per year -25% | 352.77 Total return 32% · Per year 32% | 529.29 Total return 98% · Per year 98% |
| 3 years | 234.54 Total return -11% · Per year -4% | 460.59 Total return 74% · Per year 20% | 752.88 Total return 183% · Per year 41% |
| 5 years | 274.50 Total return 5% · Per year 1% | 601.38 Total return 128% · Per year 18% | 1,070.92 Total return 304% · Per year 32% |
- Exit P/E± 115.15
- Net margin± 80.60
- Annual revenue growth± 60.50
- Annual dilution± 6.77
AI analysis
AI-generatedAI-generated analysis (Claude) from cited public sources; it may contain errors. Not investment advice. As of 27 Oct 2026 · Model: claude-haiku-5-5.
Possibly outdated: the newest document it read is from 06 Aug 2026; since then the company filed 8-K (04 Nov 2026 · results).
In brief
Paycom Software provides a SaaS human capital management platform covering the full employee lifecycle from recruitment to retirement on a single database. Total revenue grew 9.8% in the second quarter of 2026 3, and the company raised its full-year outlook, while automation and artificial intelligence are becoming its main differentiators.
SWOT
Strengths
- The platform rests on a single database and an in-house architecture, which reduces complex integrations 1. Revenue retention is high and clients use the applications intensively 1. The company has maintained high margins in recent results 3.
- Automation and artificial intelligence are built across the full solution, which may differentiate the company from rivals 12. The direct sales force and personalized service support client relationships 1.
- Research and development investment is concentrated in centers in Oklahoma and Texas, which the company says lowers the cost of technical talent 1.
Weaknesses
- The company relies heavily on revenue from payroll applications and on clients' employee counts 1. Revenue can fluctuate with seasonality and payroll dates 1.
- The single-database platform may limit integration with third-party systems, unlike competitors with connected modules 1.
- Developing AI tools requires continuing investment, which can raise operating costs 1.
Opportunities
- The company intends to open sales offices in areas where it has no teams yet and to sell more applications to existing clients 1. These could increase revenue per client 1.
- Large clients and those with international employees are an important target, and the Global HCM solution could extend the addressable market 1.
- Daily pay and financial services for employees could become an additional source of revenue if adoption grows 1.
Threats
- Cyber-attacks and data breaches are a major risk, and a breach could damage reputation and clients 1. The company warns that cyber insurance may not cover all losses 1.
- Intense competition and price pressure could reduce margins and the ability to attract new clients 1.
- Legislative and regulatory changes can alter demand or make certain applications obsolete 1.
Risks
- Data securityhigh
The solution stores sensitive personal and financial data, and the company has been targeted in cyber-attacks 1. A breach could lead to client losses and litigation 1.
- Infrastructure disruptionhigh
Clients depend on fast access to the platform, and data center failures could affect employee payments and tax remittances 1.
- Competitive pressuremedium
Large competitors may offer lower prices or more integrated packages, which could reduce retention 1.
- Labor market dependencemedium
Much revenue depends on clients' employee counts, and changes in the labor market can alter revenue 1.
- Technological changelow
If development of new applications or AI integration falls short, the platform could become less competitive 1.
Investment thesis
What would need to be true (bull case)
- Revenue in the second quarter of 2026 came in ahead of the company's expectations, and the annual outlook was raised 3. If automation keeps increasing application adoption, growth could be sustained 13.
- High revenue retention and intensive employee use of the platform could strengthen the company's position 1. A single-database model can be hard for existing clients to replace 1.
- High margins in recent results and lower employee-related costs could support profitability if the trend continues 13.
What would break the thesis
- Revenue growth has slowed compared with earlier years, and the 2026 outlook points to moderate growth 3. If the slowdown continues, the value of the investment case could be affected.
- Price pressure from competitors and integrated solutions could reduce margins and the ability to win new clients 1.
- Cybersecurity risks and dependence on clients' employee counts could affect revenue during an economic downturn 1.
What to watch
- Development of total revenue and delivery against annual guidanceQ3 2026
- Pace of adoption of automation and AI features2027
- Annual revenue retention ratenext 10-K
- Adjusted EBITDA margin relative to the guidance of about 46%Q4 2026
Products, market & competition
AI-generatedAI-generated analysis (Claude) from cited public sources; it may contain errors. Not investment advice. As of 27 Oct 2026 · Model: claude-haiku-5-5.
Possibly outdated: the newest document it read is from 06 Aug 2026; since then the company filed 8-K (04 Nov 2026 · results).
The business
Paycom is a cloud software provider for human capital management, delivered as Software-as-a-Service, covering recruitment, talent management, human resources administration and time and labor management 1. The solution runs on a core system of record kept in one database for all functions, which the company says reduces integration and data errors 1. The company had approximately 39,200 clients at the end of 2025 1.
Most revenue comes from payroll applications, and clients are billed mainly through a fixed amount per billing period plus a fee per employee or transaction processed 1. Sales are made directly by an internally trained sales force, and each client is assigned a dedicated specialist for personalized service 1.
The platform includes proprietary technologies such as Beti, which lets employees run their own payroll, and the IWant AI engine, which gives quick access to employee data without complex navigation 1. The company operates data centers in Oklahoma, Texas and Arizona 1.
Segments
Payroll applications
Payroll is the foundation of the solution, and according to the company all clients must use it to access other applications 1. This category has historically generated most revenue, although the share of non-payroll applications is growing 1.
Market context
The company operates in the HCM software market, which it describes as highly competitive, rapidly evolving and fragmented 1. Market share is not quantified in the analyzed sources. Recent growth was 9.8% in the second quarter of 2026 3, and annual guidance for 2026 points to total revenue growth between 7% and 8% 3.
Revenue is sensitive to the labor market, since many charges depend on employee counts, and inflation and interest rates affect client hiring 1. If clients' employee numbers decline, revenue could be affected in the same direction 1.
Trends
- Automation and artificial intelligencetailwind
The company puts automation and AI at the center of its strategy and plans to apply them across the full solution 1. If clients adopt these features, they could support retention and revenue growth, although building AI tools requires additional investment 12.
- Workforce and cost adjustmenttailwind
Automation has reduced headcount at the company, and it expects certain employee-related expenses to be lower in 2026 than in 2025 1. This trend could support operating margins 1.
- Competitive and pricing pressureheadwind
Intense competition, aggressive pricing and white label or embedded payroll offerings could reduce prices and retention 1. The company warns these could weaken its competitive position 1.
- Seasonality and regulatory changemixed
Revenue from annual payroll tax forms and ACA-related filings is concentrated in the first quarter, and demand depends on the legislative framework 1. If reporting obligations change, seasonal revenue could vary 1. The company expects these fluctuations to decline as clients use more non-payroll applications 1.
Competitive position
The HCM market includes large vendors and globally present companies that may have access to larger clients and distribution through consultants and partners 1. The company says some competitors offer lower prices and can develop new products faster 1.
Cloud competitors and vendors with integrated payroll offerings create constant pressure, and the company considers its single-database platform and automation its main advantages 1. Sustaining these advantages depends on long-term execution 1.
- Automatic Data Processing, Inc.ADP
Large HCM and payroll provider named by the company among its main competitors 1.
- Paychex, Inc.PAYX
Payroll and HCM provider listed among the company's competitors 1.
- Paylocity Holding CorporationPCTY
Cloud-based HCM provider named directly as a rival 1.
- Workday, Inc.WDAY
Large human capital management platform named among the company's competitors 1.
Links, dependencies and risks
Who the company is tied to, from its own SEC filings (customers, suppliers, production, partners, competitors, countries, regulation), from the 5 %+ holders' statements (13D/13G) and from what other companies say about it. Click a node for its evidence; on a listed company the graph moves to it.
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News & filings
In the press
- Earnings Beat, Raised Guidance Send Paycom Shares HigherYahoo Finance — News · 04 Sept 2026 · EN
The latest news item in our archive is from 04 Sept 2026; the newest SEC filing is from 04 Nov 2026. The press archive comes from the RSS feeds we follow and does not necessarily cover the latest event — the filings alongside do.
SEC filings
- Current report04 Nov 2026Results of operations · Financial statements and exhibits
- Current report02 Nov 2026Other events · Financial statements and exhibits
- Quarterly report06 Aug 2026
- Current report05 Aug 2026Results of operations · Financial statements and exhibits
- Current report03 Aug 2026Other events · Financial statements and exhibits
- Current report09 Jul 2026Departure or appointment of officers · Regulation FD disclosure · Financial statements and exhibits
- Quarterly report07 May 2026
- Current report07 May 2026Shareholder vote
- Current report06 May 2026Results of operations · Financial statements and exhibits
- Current report04 May 2026Other events · Financial statements and exhibits
Sources
- [1] Form 10-K, fiscal year ended 2025-12-31 · SEC / Paycom Software, Inc. · 19 Feb 2026
- [2] Form 10-Q, quarter ended 2026-06-30 · SEC / Paycom Software, Inc. · 06 Aug 2026
- [3] Form 8-K, results release (exhibit 99.1) · SEC / Paycom Software, Inc. · 05 Aug 2026
Figures computed by olivLaw from SEC filings and closing prices; the qualitative analysis is AI-generated from cited sources. Not investment advice.