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Paycom posted Q1 EPS of $3.15 and revenues of $571.9M, both ahead of consensus and up year over year.
PAYC's recurring revenues rose 8.8% to $544M, while gross margin expanded 50 bps to 85.1%.
Paycom guided 2026 revenues of $2.175-$2.195B and expects adjusted EBITDA of $950-$970M.
Paycom Software, Inc. (PAYC - Free Report) reported better-than-expected first-quarter 2026 results, wherein both top and bottom lines surpassed the Zacks Consensus Estimate.
The online payroll and human resource technology provider reported non-GAAP earnings of $3.15 per share, which increased 12.5% year over year and beat the Zacks Consensus Estimate by 7.5%.
Paycom’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, while missing once, the average surprise being 5.7%.
Revenues totaled $571.9 million, which rose 7.8% from the year-ago quarter and exceeded the consensus estimate of $565 million by 1.2%.
Paycom Software, Inc. Price, Consensus and EPS Surprise
Paycom’s Recurring revenues (representing 95.1% of the total revenues) improved 8.8% to $544 million in the first quarter. Our estimate for the company’s Recurring revenues was pegged at $538.2 million.
Paycom’s revenues from the Implementation and Other segment decreased to $27.8 million from $30.5 million in the year-ago quarter and contributed 4.9% to total sales. Our estimate for the segment’s revenues was pegged at $27.7 million.
Adjusted gross profits increased 8.4% from the year-ago period to $486.7 million. The adjusted gross margin expanded 50 basis points (bps) on a year-over-year basis to 85.1%.
Paycom’s adjusted EBITDA rose 8.8% year over year to $275.4 million. The adjusted EBITDA margin expanded 50 basis points to 48.2%.
Paycom’s Balance Sheet & Cash Flow
Paycom exited the first quarter with cash and cash equivalents of $153.9 million compared with $370 million recorded in the previous quarter. The company had long-term debt of $675 million as of March 31, 2026.
In the first quarter of 2026, PAYC generated operating cash flow of approximately $213.8 million, paid out $17.7 million in dividends and bought back $1.06 billion worth of its common stock.
The board also approved a new $2 billion buyback authorization. Earlier on May 4, Paycom declared its upcoming quarterly dividend of 37.5 cents per share, payable on May 26, 2026.
Paycom Reaffirms 2026 Guidance
Following the first-quarter performance, management reaffirmed full-year guidance ranges. For 2026, Paycom continues to expect total revenues of $2.175-$2.195 billion, implying year-over-year growth of 6-7%. The Zacks Consensus Estimate is pegged at $2.19 billion, indicating year-over-year growth of 6.8%.
The company projects recurring revenues to grow 7-8% year over year. PAYC forecasts revenues from interest on funds held for clients to be $103 million.
Paycom expects its 2026 adjusted EBITDA to be between $950 million and $970 million, translating to an EBITDA margin of approximately 44% at the midpoint.
Shares of Arista Networks have gained 12.3% year to date. The Zacks Consensus Estimate for ANET’s 2026 earnings is pegged at $3.54 per share, up by a penny over the past 30 days, indicating an increase of 18.8% year over year.
Shares of Advanced Energy have surged 72.3% year to date. The Zacks Consensus Estimate for AEIS’ 2026 earnings is pegged at $8.37 per share, up by 5 cents over the past seven days, indicating a rise of 30.6% year over year.
Amphenol shares have jumped 2.5% year to date. The Zacks Consensus Estimate for APH’s 2026 earnings is pegged at $4.76 per share, up by 11% over the past seven days, indicating an increase of 42.5% year over year.
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Paycom's Q1 Earnings Surpass Expectations, Revenues Rise Y/Y
Key Takeaways
Paycom Software, Inc. (PAYC - Free Report) reported better-than-expected first-quarter 2026 results, wherein both top and bottom lines surpassed the Zacks Consensus Estimate.
The online payroll and human resource technology provider reported non-GAAP earnings of $3.15 per share, which increased 12.5% year over year and beat the Zacks Consensus Estimate by 7.5%.
Paycom’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, while missing once, the average surprise being 5.7%.
Revenues totaled $571.9 million, which rose 7.8% from the year-ago quarter and exceeded the consensus estimate of $565 million by 1.2%.
Paycom Software, Inc. Price, Consensus and EPS Surprise
Paycom Software, Inc. price-consensus-eps-surprise-chart | Paycom Software, Inc. Quote
Paycom’s Q1 in Detail
Paycom’s Recurring revenues (representing 95.1% of the total revenues) improved 8.8% to $544 million in the first quarter. Our estimate for the company’s Recurring revenues was pegged at $538.2 million.
Paycom’s revenues from the Implementation and Other segment decreased to $27.8 million from $30.5 million in the year-ago quarter and contributed 4.9% to total sales. Our estimate for the segment’s revenues was pegged at $27.7 million.
Adjusted gross profits increased 8.4% from the year-ago period to $486.7 million. The adjusted gross margin expanded 50 basis points (bps) on a year-over-year basis to 85.1%.
Paycom’s adjusted EBITDA rose 8.8% year over year to $275.4 million. The adjusted EBITDA margin expanded 50 basis points to 48.2%.
Paycom’s Balance Sheet & Cash Flow
Paycom exited the first quarter with cash and cash equivalents of $153.9 million compared with $370 million recorded in the previous quarter. The company had long-term debt of $675 million as of March 31, 2026.
In the first quarter of 2026, PAYC generated operating cash flow of approximately $213.8 million, paid out $17.7 million in dividends and bought back $1.06 billion worth of its common stock.
The board also approved a new $2 billion buyback authorization. Earlier on May 4, Paycom declared its upcoming quarterly dividend of 37.5 cents per share, payable on May 26, 2026.
Paycom Reaffirms 2026 Guidance
Following the first-quarter performance, management reaffirmed full-year guidance ranges. For 2026, Paycom continues to expect total revenues of $2.175-$2.195 billion, implying year-over-year growth of 6-7%. The Zacks Consensus Estimate is pegged at $2.19 billion, indicating year-over-year growth of 6.8%.
The company projects recurring revenues to grow 7-8% year over year. PAYC forecasts revenues from interest on funds held for clients to be $103 million.
Paycom expects its 2026 adjusted EBITDA to be between $950 million and $970 million, translating to an EBITDA margin of approximately 44% at the midpoint.
Paycom’s Zacks Rank & Stocks to Consider
Currently, PAYC carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Zacks Computer and Technology sector are Arista Networks (ANET - Free Report) , Advanced Energy (AEIS - Free Report) and Amphenol (APH - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of Arista Networks have gained 12.3% year to date. The Zacks Consensus Estimate for ANET’s 2026 earnings is pegged at $3.54 per share, up by a penny over the past 30 days, indicating an increase of 18.8% year over year.
Shares of Advanced Energy have surged 72.3% year to date. The Zacks Consensus Estimate for AEIS’ 2026 earnings is pegged at $8.37 per share, up by 5 cents over the past seven days, indicating a rise of 30.6% year over year.
Amphenol shares have jumped 2.5% year to date. The Zacks Consensus Estimate for APH’s 2026 earnings is pegged at $4.76 per share, up by 11% over the past seven days, indicating an increase of 42.5% year over year.