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Paycom's (PAYC) Q2 Earnings In Line, Revenues Climb Y/Y
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Paycom Software (PAYC - Free Report) recently reported mixed results for second-quarter 2020, wherein earnings came in line with the Zacks Consensus Estimate but revenues missed the same.
The company generated revenues of $181.6 million, which increased 7% from the year-earlier period but fell short of the consensus mark of $182.3 million. Paycom Software’s quarterly non-GAAP earnings per share of 62 cents came in line with the Zacks Consensus Estimate. However, the bottom-line figure dropped 17.3% year on year.
The company’s overall performance was mainly impacted by payment deferrals by clients, headcount reductions at client offices and elevated operating expenses.
Paycom Software, Inc. Price, Consensus and EPS Surprise
Adjusted gross profit increased 6.5% from the year-ago period to $153.8 million. However, adjusted gross margin contracted 60 basis points (bps) on a year-over-year basis to 84.7%.
Paycom Software’s adjusted EBITDA fell 11.8% year over year to $61.2 million. Moreover, adjusted EBITDA margin shrunk 730 bps to 33.7%.
Balance Sheet & Cash Flow
Paycom Software exited the June-end quarter with cash and cash equivalents of $113.5 million compared with the $181.8 million recorded in the prior quarter.
The company’s balance sheet comprises long-term debt of $31.8 million compared with the previous quarter’s $32.2 million.
Cash from operations was $107.5 million in the first half of 2020 and the company repurchased approximately $52 million worth of its common stock.
Guidance
For the third quarter, Paycom Software estimates revenues between $191 million and $193 million. The Zacks Consensus Estimate is pegged at $188.6 million.
Management projects adjusted EBITDA in the range of $56 million to $58 million.
The long-term earnings growth rate for Benefitfocus, Cogent and Synaptics is currently pegged at 30%, 10.6%, and 10%, respectively.
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Paycom's (PAYC) Q2 Earnings In Line, Revenues Climb Y/Y
Paycom Software (PAYC - Free Report) recently reported mixed results for second-quarter 2020, wherein earnings came in line with the Zacks Consensus Estimate but revenues missed the same.
The company generated revenues of $181.6 million, which increased 7% from the year-earlier period but fell short of the consensus mark of $182.3 million. Paycom Software’s quarterly non-GAAP earnings per share of 62 cents came in line with the Zacks Consensus Estimate. However, the bottom-line figure dropped 17.3% year on year.
The company’s overall performance was mainly impacted by payment deferrals by clients, headcount reductions at client offices and elevated operating expenses.
Paycom Software, Inc. Price, Consensus and EPS Surprise
Paycom Software, Inc. price-consensus-eps-surprise-chart | Paycom Software, Inc. Quote
Margins
Adjusted gross profit increased 6.5% from the year-ago period to $153.8 million. However, adjusted gross margin contracted 60 basis points (bps) on a year-over-year basis to 84.7%.
Paycom Software’s adjusted EBITDA fell 11.8% year over year to $61.2 million. Moreover, adjusted EBITDA margin shrunk 730 bps to 33.7%.
Balance Sheet & Cash Flow
Paycom Software exited the June-end quarter with cash and cash equivalents of $113.5 million compared with the $181.8 million recorded in the prior quarter.
The company’s balance sheet comprises long-term debt of $31.8 million compared with the previous quarter’s $32.2 million.
Cash from operations was $107.5 million in the first half of 2020 and the company repurchased approximately $52 million worth of its common stock.
Guidance
For the third quarter, Paycom Software estimates revenues between $191 million and $193 million. The Zacks Consensus Estimate is pegged at $188.6 million.
Management projects adjusted EBITDA in the range of $56 million to $58 million.
Zacks Rank and Key Picks
Currently, Paycom carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader technology sector include Benefitfocus , Cogent Communications Holdings (CCOI - Free Report) and Synaptics (SYNA - Free Report) , all carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The long-term earnings growth rate for Benefitfocus, Cogent and Synaptics is currently pegged at 30%, 10.6%, and 10%, respectively.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>