We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Paycom (PAYC) Q3 Earnings Beat Estimates, Revenues Miss
Read MoreHide Full Article
Paycom Software (PAYC - Free Report) reported mixed third-quarter fiscal 2023 results, wherein non-GAAP earnings per share surpassed the Zacks Consensus Estimate, but revenues missed the same.
The online payroll and human resource technology provider reported non-GAAP earnings of $1.77 per share in the third quarter, beating the Zacks Consensus Estimate of $1.62. The bottom line improved 39.4% from $1.27 per share reported in the year-ago quarter.
In the third quarter of 2023, Paycom reported revenues of $406.3 million, missing the consensus mark of $411 million. The top line improved 21.6% year over year. The top-line figure also fell short of management’s previous guidance of $410-$412 million, mainly due to weaker-than-anticipated service revenues and unscheduled payroll runs.
Paycom Software, Inc. Price, Consensus and EPS Surprise
Paycom’s Recurring revenues (representing 98.1% of the total revenues) improved 21.5% to $398.8 million in the third quarter. Our estimates for the company’s Recurring revenues were pegged at $404 million.
The company’s revenues from the Implementation and Other segment improved to $7.5 million from $6 million in the year-ago quarter and contributed 1.9% to total sales. Our estimates for the division’s revenues were pegged at $6.9 million.
Adjusted gross profits climbed 21.3% from the year-ago period to $340.2 million. However, the adjusted gross margin contracted 20 basis points (bps) on a year-over-year basis to 83.7%.
Paycom’s adjusted EBITDA increased 23.7% year over year to $165.6 million. The adjusted EBITDA margin expanded 310 bps to 40.8%.
Balance Sheet & Cash Flow
Paycom exited the third quarter with cash and cash equivalents of $484 million compared with $536.5 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 third quarter of 2023, PAYC generated an operating cash flow of approximately $98.6 million, paid out $21.6 million in dividends and bought back $76.5 million worth of its common stock. During the first nine months of 2023, the company generated an operating cash flow of approximately $351 million.
The company announced its first-ever dividend policy in May 2023. PAYC intends to pay out a quarterly cash dividend of 37.5 cents per share or $1.50 per share annually. In the first nine months of 2023, the company has paid $43.4 million in dividend.
Lowered FY23 Guidance
Paycom lowered its guidance for the full-year 2023. The company now projects revenues between $1.679 billion and $1.684 billion, down from the earlier range of $1.715-$1.717 billion. The forecast range for adjusted EBITDA has been revised downward to $712-$717 million from the $722-$724 million band anticipated previously.
For the third quarter of 2023, Paycom forecasts revenues and adjusted EBITDA in the ranges of $420-$425 million and $169-$174 million, respectively.
Zacks Rank and Stocks to Consider
Currently, PAYC carries a Zacks Rank #4 (Sell). Shares of the company have declined 21.1% year to date.
The Zacks Consensus Estimate for NVDA’s third-quarter fiscal 2024 earnings has been revised by 2 cents northward to $3.34 per share in the past 30 days. For fiscal 2024, earnings estimates have increased by 7 cents to $10.74 in the past 30 days.
NVIDIA's earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, while missing the same on one occasion, the average surprise being 9.8%. Shares of NVDA have rallied 179% year to date.
The Zacks Consensus Estimate for NetEase's third-quarter 2024 earnings has been revised downward by a penny to $1.56 per share in the past 30 days. For fiscal 2024, earnings estimates have increased by 35 cents to $6.54 per share in the past 90 days.
NTES' earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, while missing the same on one occasion, the average surprise being 24.54%. Shares of NTES have gained 47.2% year to date.
The Zacks Consensus Estimate for DELL's third-quarter 2024 earnings has been revised upward by 8 cents to $1.47 per share in the past 60 days. For fiscal 2024, earnings estimates have increased by 3 cents to $6.33 per share in the past 30 days.
Dell’s earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 39.52%. Shares of DELL have climbed 66.4% year to date.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Paycom (PAYC) Q3 Earnings Beat Estimates, Revenues Miss
Paycom Software (PAYC - Free Report) reported mixed third-quarter fiscal 2023 results, wherein non-GAAP earnings per share surpassed the Zacks Consensus Estimate, but revenues missed the same.
The online payroll and human resource technology provider reported non-GAAP earnings of $1.77 per share in the third quarter, beating the Zacks Consensus Estimate of $1.62. The bottom line improved 39.4% from $1.27 per share reported in the year-ago quarter.
In the third quarter of 2023, Paycom reported revenues of $406.3 million, missing the consensus mark of $411 million. The top line improved 21.6% year over year. The top-line figure also fell short of management’s previous guidance of $410-$412 million, mainly due to weaker-than-anticipated service revenues and unscheduled payroll runs.
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 98.1% of the total revenues) improved 21.5% to $398.8 million in the third quarter. Our estimates for the company’s Recurring revenues were pegged at $404 million.
The company’s revenues from the Implementation and Other segment improved to $7.5 million from $6 million in the year-ago quarter and contributed 1.9% to total sales. Our estimates for the division’s revenues were pegged at $6.9 million.
Adjusted gross profits climbed 21.3% from the year-ago period to $340.2 million. However, the adjusted gross margin contracted 20 basis points (bps) on a year-over-year basis to 83.7%.
Paycom’s adjusted EBITDA increased 23.7% year over year to $165.6 million. The adjusted EBITDA margin expanded 310 bps to 40.8%.
Balance Sheet & Cash Flow
Paycom exited the third quarter with cash and cash equivalents of $484 million compared with $536.5 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 third quarter of 2023, PAYC generated an operating cash flow of approximately $98.6 million, paid out $21.6 million in dividends and bought back $76.5 million worth of its common stock. During the first nine months of 2023, the company generated an operating cash flow of approximately $351 million.
The company announced its first-ever dividend policy in May 2023. PAYC intends to pay out a quarterly cash dividend of 37.5 cents per share or $1.50 per share annually. In the first nine months of 2023, the company has paid $43.4 million in dividend.
Lowered FY23 Guidance
Paycom lowered its guidance for the full-year 2023. The company now projects revenues between $1.679 billion and $1.684 billion, down from the earlier range of $1.715-$1.717 billion. The forecast range for adjusted EBITDA has been revised downward to $712-$717 million from the $722-$724 million band anticipated previously.
For the third quarter of 2023, Paycom forecasts revenues and adjusted EBITDA in the ranges of $420-$425 million and $169-$174 million, respectively.
Zacks Rank and Stocks to Consider
Currently, PAYC carries a Zacks Rank #4 (Sell). Shares of the company have declined 21.1% year to date.
Some better-ranked stocks from the broader technology sector are NVIDIA (NVDA - Free Report) , NetEase (NTES - Free Report) and Dell Technologies (DELL - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for NVDA’s third-quarter fiscal 2024 earnings has been revised by 2 cents northward to $3.34 per share in the past 30 days. For fiscal 2024, earnings estimates have increased by 7 cents to $10.74 in the past 30 days.
NVIDIA's earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, while missing the same on one occasion, the average surprise being 9.8%. Shares of NVDA have rallied 179% year to date.
The Zacks Consensus Estimate for NetEase's third-quarter 2024 earnings has been revised downward by a penny to $1.56 per share in the past 30 days. For fiscal 2024, earnings estimates have increased by 35 cents to $6.54 per share in the past 90 days.
NTES' earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, while missing the same on one occasion, the average surprise being 24.54%. Shares of NTES have gained 47.2% year to date.
The Zacks Consensus Estimate for DELL's third-quarter 2024 earnings has been revised upward by 8 cents to $1.47 per share in the past 60 days. For fiscal 2024, earnings estimates have increased by 3 cents to $6.33 per share in the past 30 days.
Dell’s earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 39.52%. Shares of DELL have climbed 66.4% year to date.