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Paycom (PAYC) Q4 Earnings and Revenues Surpass Estimates
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Paycom Software (PAYC - Free Report) ended 2022 on a strong note by delivering solid fourth-quarter results, wherein the top and bottom lines surpassed the respective Zacks Consensus Estimate and rose year over year.
The online payroll and human resource technology provider reported non-GAAP earnings of $1.73 per share, beating the Zacks Consensus Estimate of $1.46. The bottom line improved 55.9% from the $1.11 per share reported in the year-ago quarter.
For the fourth quarter of 2022, Paycom reported revenues of $370.6 million, beating the consensus mark of $367.1 million and improving 30% year over year. This year-over-year upside was primarily driven by strong demand, new business wins and the adoption of recent new product offerings.
Paycom Software, Inc. Price, Consensus and EPS Surprise
Paycom’s recurring revenues (representing 98.2% of the total revenues) improved 30% to $364 million in the fourth quarter.
Adjusted gross profits climbed 30.4% from the year-ago period to $312.5 million. Moreover, the adjusted gross margin expanded 20 basis points (bps) on a year-over-year basis to 84.3%.
Paycom’s adjusted EBITDA increased 49.6% year over year to $163.9 million. The adjusted EBITDA margin expanded 580 bps to 44.2%.
Balance Sheet & Cash Flow
Paycom exited the fourth quarter with cash and cash equivalents of $400.7 million compared with the $317.2 million recorded in the previous quarter. The company’s balance sheet comprised net long-term debt of $29 million, which remained flat sequentially.
In the fourth quarter of 2022, PAYC generated operating cash flow of $128.5 million. During the full-year 2022, the company generated $365.1 million worth of operating cash flow.
Guidance
For the first quarter of 2023, Paycom forecasts revenues and adjusted EBITDA in the ranges of $443-$445 million and $210-$212 million, respectively.
For the full-year 2023, Paycom forecasts revenues and adjusted EBITDA in the ranges of $1.700-$1.702 billion and $700-$702 million, respectively.
Zacks Rank & Stocks to Consider
Currently, Paycom carries a Zacks Rank #3 (Hold). Shares of PAYC have risen 2.9% over the past year.
The Zacks Consensus Estimate for Clarivate’s first-quarter 2023 earnings has been revised upward by a penny to 17 cents per share over the past 60 days. For 2023, earnings estimates have been revised a penny northward to 80 cents per share in the past 60 days.
Clarivate's earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 9.4%. Shares of CLVT have fallen 31% in the trailing 12 months.
The Zacks Consensus Estimate for CDW's fourth-quarter 2022 earnings has remained unchanged at $2.45 per share over the past 60 days. For 2022, earnings estimates have remained unchanged at $9.75 per share in the past 60 days.
CDW’s earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 6.6%. Shares of the company have increased 2.3% over the past year.
The Zacks Consensus Estimate for ServiceNow's first-quarter 2023 earnings has been revised southward by 4 cents to $2.01 per share over the past 30 days. For 2023, earnings estimates have moved upward by 18 cents to $9.17 per share in the past 30 days.
ServiceNow's earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 6.9%. Shares of NOW have plunged 21.6% in the trailing 12 months.
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Paycom (PAYC) Q4 Earnings and Revenues Surpass Estimates
Paycom Software (PAYC - Free Report) ended 2022 on a strong note by delivering solid fourth-quarter results, wherein the top and bottom lines surpassed the respective Zacks Consensus Estimate and rose year over year.
The online payroll and human resource technology provider reported non-GAAP earnings of $1.73 per share, beating the Zacks Consensus Estimate of $1.46. The bottom line improved 55.9% from the $1.11 per share reported in the year-ago quarter.
For the fourth quarter of 2022, Paycom reported revenues of $370.6 million, beating the consensus mark of $367.1 million and improving 30% year over year. This year-over-year upside was primarily driven by strong demand, new business wins and the adoption of recent new product offerings.
Paycom Software, Inc. Price, Consensus and EPS Surprise
Paycom Software, Inc. price-consensus-eps-surprise-chart | Paycom Software, Inc. Quote
Quarter in Detail
Paycom’s recurring revenues (representing 98.2% of the total revenues) improved 30% to $364 million in the fourth quarter.
Adjusted gross profits climbed 30.4% from the year-ago period to $312.5 million. Moreover, the adjusted gross margin expanded 20 basis points (bps) on a year-over-year basis to 84.3%.
Paycom’s adjusted EBITDA increased 49.6% year over year to $163.9 million. The adjusted EBITDA margin expanded 580 bps to 44.2%.
Balance Sheet & Cash Flow
Paycom exited the fourth quarter with cash and cash equivalents of $400.7 million compared with the $317.2 million recorded in the previous quarter. The company’s balance sheet comprised net long-term debt of $29 million, which remained flat sequentially.
In the fourth quarter of 2022, PAYC generated operating cash flow of $128.5 million. During the full-year 2022, the company generated $365.1 million worth of operating cash flow.
Guidance
For the first quarter of 2023, Paycom forecasts revenues and adjusted EBITDA in the ranges of $443-$445 million and $210-$212 million, respectively.
For the full-year 2023, Paycom forecasts revenues and adjusted EBITDA in the ranges of $1.700-$1.702 billion and $700-$702 million, respectively.
Zacks Rank & Stocks to Consider
Currently, Paycom carries a Zacks Rank #3 (Hold). Shares of PAYC have risen 2.9% over the past year.
Some better-ranked stocks from the broader technology sector are Clarivate Plc (CLVT - Free Report) , CDW Corporation (CDW - Free Report) and ServiceNow (NOW - Free Report) . Clarivate sports a Zacks Rank #1 (Strong Buy) at present, while CDW and ServiceNow each carry a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Clarivate’s first-quarter 2023 earnings has been revised upward by a penny to 17 cents per share over the past 60 days. For 2023, earnings estimates have been revised a penny northward to 80 cents per share in the past 60 days.
Clarivate's earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 9.4%. Shares of CLVT have fallen 31% in the trailing 12 months.
The Zacks Consensus Estimate for CDW's fourth-quarter 2022 earnings has remained unchanged at $2.45 per share over the past 60 days. For 2022, earnings estimates have remained unchanged at $9.75 per share in the past 60 days.
CDW’s earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 6.6%. Shares of the company have increased 2.3% over the past year.
The Zacks Consensus Estimate for ServiceNow's first-quarter 2023 earnings has been revised southward by 4 cents to $2.01 per share over the past 30 days. For 2023, earnings estimates have moved upward by 18 cents to $9.17 per share in the past 30 days.
ServiceNow's earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 6.9%. Shares of NOW have plunged 21.6% in the trailing 12 months.