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Paycom (PAYC) Q3 Earnings Match Estimates, Revenues Top
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Paycom Software (PAYC - Free Report) third-quarter 2018 non-GAAP earnings per share came in at 52 cents per share, which matched the Zacks Consensus Estimate and increased 79.3% from the year-ago quarter.
Paycom Software reported revenues of $133.3 million, which increased 31.6% from the year-ago quarter and surpassed the Zacks Consensus Estimate of $130.5 million.
The year-over-over increase can be attributed to new business wins and improvement in sales productivity. Robust adoption of enhanced HCM software solutions across industries and geographies is a key driver.
Moreover, revenues were impacted positively by a 31% year-over-year increase in recurring revenues, which comprised around 98% of total revenues.
The company is gaining foothold among larger companies. As a result of this, the company is expanding its proactive sales effort to target companies with 50-5000 employees against its earlier target of 50-2000 employees.
Margins
Adjusted gross profit increased 31.2% from the year-ago period to $111.5 million. The company’s adjusted gross margin contracted 30 basis points (bps) on a year-over-year basis to 83.6%, primarily due to increase in spend on sales and marketing.
As a percentage of revenues, total adjusted administration expenses, sales and marketing expenses, and research and development expenses of 26.4%, 53.1% and 8.5% expanded 60 bps, 410 bps and 120 bps, respectively.
Paycom Software, Inc. Price, Consensus and EPS Surprise
Paycom Software’s adjusted EBITDA increased 22% year over year to $49.2 million.
Balance Sheet & Cash Flow
Paycom Software exited the third quarter with cash and cash equivalents of $85 million compared with $54.6 million in the previous quarter.
The company’s balance sheet comprises long-term debt of $34.8 million compared with $33.5 million in the previous quarter.
Net cash provided by operating activities in the quarter was $45.5 million.
The company repurchased more than 30K shares in the quarter.
Guidance
For fourth-quarter 2018, Paycom Software expects revenues in the range of $142.5-$144.5 million. Adjusted EBITDA is expected to be in the range of $49.5-$51.5 million.
The company expects sales and marketing expense to remain at a higher level in the fourth quarter due to the company’s national advertising campaign, which will keep margins under pressure.
Paycom Software raised its guidance for the full year. The company now anticipates revenues in the range of $558.5-$560.5 million, up from the previous expectation of $554-$556 million. Adjusted EBITDA is expected to be in the range of $233-$235 million, up from the previous guidance of $231-$233 million.
The company anticipates adjusted gross margin within the range of 84% to 85%.
Long-term earnings growth for Intel, Twitter and CyberArk is projected to be 8.4%, 22.1% and 19.8%, respectively.
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The greatest discovery in this century of biology is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating revenue, and cures for a variety of deadly diseases are in the pipeline.
So are big potential profits for early investors. Zacks has released an updated Special Report that explains this breakthrough and names the best 3 stocks to ride it.
Image: Bigstock
Paycom (PAYC) Q3 Earnings Match Estimates, Revenues Top
Paycom Software (PAYC - Free Report) third-quarter 2018 non-GAAP earnings per share came in at 52 cents per share, which matched the Zacks Consensus Estimate and increased 79.3% from the year-ago quarter.
Paycom Software reported revenues of $133.3 million, which increased 31.6% from the year-ago quarter and surpassed the Zacks Consensus Estimate of $130.5 million.
The year-over-over increase can be attributed to new business wins and improvement in sales productivity. Robust adoption of enhanced HCM software solutions across industries and geographies is a key driver.
Moreover, revenues were impacted positively by a 31% year-over-year increase in recurring revenues, which comprised around 98% of total revenues.
The company is gaining foothold among larger companies. As a result of this, the company is expanding its proactive sales effort to target companies with 50-5000 employees against its earlier target of 50-2000 employees.
Margins
Adjusted gross profit increased 31.2% from the year-ago period to $111.5 million. The company’s adjusted gross margin contracted 30 basis points (bps) on a year-over-year basis to 83.6%, primarily due to increase in spend on sales and marketing.
As a percentage of revenues, total adjusted administration expenses, sales and marketing expenses, and research and development expenses of 26.4%, 53.1% and 8.5% expanded 60 bps, 410 bps and 120 bps, respectively.
Paycom Software, Inc. Price, Consensus and EPS Surprise
Paycom Software, Inc. Price, Consensus and EPS Surprise | Paycom Software, Inc. Quote
Paycom Software’s adjusted EBITDA increased 22% year over year to $49.2 million.
Balance Sheet & Cash Flow
Paycom Software exited the third quarter with cash and cash equivalents of $85 million compared with $54.6 million in the previous quarter.
The company’s balance sheet comprises long-term debt of $34.8 million compared with $33.5 million in the previous quarter.
Net cash provided by operating activities in the quarter was $45.5 million.
The company repurchased more than 30K shares in the quarter.
Guidance
For fourth-quarter 2018, Paycom Software expects revenues in the range of $142.5-$144.5 million. Adjusted EBITDA is expected to be in the range of $49.5-$51.5 million.
The company expects sales and marketing expense to remain at a higher level in the fourth quarter due to the company’s national advertising campaign, which will keep margins under pressure.
Paycom Software raised its guidance for the full year. The company now anticipates revenues in the range of $558.5-$560.5 million, up from the previous expectation of $554-$556 million. Adjusted EBITDA is expected to be in the range of $233-$235 million, up from the previous guidance of $231-$233 million.
The company anticipates adjusted gross margin within the range of 84% to 85%.
Zacks Rank and Stocks to Consider
Paycom currently carries a Zacks Rank #3 (Hold).
A few better-ranked stocks in the broader technology sector are Intel Corporation (INTC - Free Report) , Twitter, Inc. and CyberArk Software Ltd. (CYBR - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth for Intel, Twitter and CyberArk is projected to be 8.4%, 22.1% and 19.8%, respectively.
3 Medical Stocks to Buy Now
The greatest discovery in this century of biology is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating revenue, and cures for a variety of deadly diseases are in the pipeline.
So are big potential profits for early investors. Zacks has released an updated Special Report that explains this breakthrough and names the best 3 stocks to ride it.
See them today for free >>