We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
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.
Why Is Paycom (PAYC) Up 11.4% Since Last Earnings Report?
Read MoreHide Full Article
It has been about a month since the last earnings report for Paycom Software (PAYC - Free Report) . Shares have added about 11.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Paycom due for a pullback? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent catalysts for Paycom Software, Inc. before we dive into how investors and analysts have reacted as of late.
Paycom reported better-than-expected second-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 $2.78 per share, which increased 35% year over year and beat the Zacks Consensus Estimate by 21.9%.
Paycom’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, while missing once, the average surprise being 7.2%.
Revenues totaled $531.2 million, which rose 9.8% from the year-ago quarter and exceeded the consensus estimate by 3.7%.
Paycom’s Q2 in Detail
Paycom’s Recurring and other revenues (representing 95.1% of the total revenues) improved 11% to $505.2 million in the second quarter. Our estimate for the company’s Recurring revenues was pegged at $485.7 million.
Paycom’s revenues from the Interest on funds held for clients decreased to $26 million from $28.5 million in the year-ago quarter and contributed 4.9% to total sales. Our estimate for the segment’s revenues was pegged at $25.9 million.
Adjusted gross profits increased 10.4% from the year-ago period to $444.1 million. The adjusted gross margin expanded 40 basis points (bps) on a year-over-year basis to 83.6%.
Paycom’s adjusted EBITDA rose 18.5% year over year to $235 million. The adjusted EBITDA margin expanded 320 basis points to 44.2%.
Paycom’s Balance Sheet & Cash Flow
Paycom exited the second quarter with cash and cash equivalents of $198 million compared with $153.9 million recorded in the previous quarter. The company had long-term debt of $900 million as of June 30, 2026.
In the second quarter of 2026, PAYC generated operating cash flow of approximately $213.8 million, paid out $17.9 million in dividends and bought back $345.9 million worth of its common stock.
Paycom Raises 2026 Guidance
Following the second-quarter performance, management raised its full-year 2026 guidance ranges. For 2026, Paycom expects total revenues of $2.197-$2.212 billion, implying year-over-year growth of 7-8%, up from its prior range of $2.175-$2.195 billion.
The company projects recurring and other revenues to grow 8-9% year over year, up from its prior range of 7-8%. PAYC forecasts revenues from Interest on funds held for clients to be $105 million, up from the prior projection of $103 million.
Paycom expects its 2026 adjusted EBITDA to be between $1.007 billion and $1.022 billion, translating to an adjusted EBITDA margin of approximately 46% at the midpoint, up from the earlier guided range of $950 million to $970 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a upward trend in estimates review.
The consensus estimate has shifted 20.03% due to these changes.
VGM Scores
At this time, Paycom has a average Growth Score of C, a score with the same score on the momentum front. Following the exact same course, the stock was allocated a score of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Paycom has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Paycom is part of the Zacks Internet - Software industry. Over the past month, EverQuote (EVER - Free Report) , a stock from the same industry, has gained 6.3%. The company reported its results for the quarter ended June 2026 more than a month ago.
EverQuote reported revenues of $195.09 million in the last reported quarter, representing a year-over-year change of +24.6%. EPS of $0.65 for the same period compares with $0.39 a year ago.
EverQuote is expected to post earnings of $0.67 per share for the current quarter, representing a year-over-year change of +34%. Over the last 30 days, the Zacks Consensus Estimate has changed +24.4%.
EverQuote has a Zacks Rank #4 (Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.
View the Zacks #1 Rank List
Image: Bigstock
Why Is Paycom (PAYC) Up 11.4% Since Last Earnings Report?
It has been about a month since the last earnings report for Paycom Software (PAYC - Free Report) . Shares have added about 11.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Paycom due for a pullback? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent catalysts for Paycom Software, Inc. before we dive into how investors and analysts have reacted as of late.
Paycom's Q2 Earnings Surpass Expectations, Revenues Rise Y/Y
Paycom reported better-than-expected second-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 $2.78 per share, which increased 35% year over year and beat the Zacks Consensus Estimate by 21.9%.
Paycom’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, while missing once, the average surprise being 7.2%.
Revenues totaled $531.2 million, which rose 9.8% from the year-ago quarter and exceeded the consensus estimate by 3.7%.
Paycom’s Q2 in Detail
Paycom’s Recurring and other revenues (representing 95.1% of the total revenues) improved 11% to $505.2 million in the second quarter. Our estimate for the company’s Recurring revenues was pegged at $485.7 million.
Paycom’s revenues from the Interest on funds held for clients decreased to $26 million from $28.5 million in the year-ago quarter and contributed 4.9% to total sales. Our estimate for the segment’s revenues was pegged at $25.9 million.
Adjusted gross profits increased 10.4% from the year-ago period to $444.1 million. The adjusted gross margin expanded 40 basis points (bps) on a year-over-year basis to 83.6%.
Paycom’s adjusted EBITDA rose 18.5% year over year to $235 million. The adjusted EBITDA margin expanded 320 basis points to 44.2%.
Paycom’s Balance Sheet & Cash Flow
Paycom exited the second quarter with cash and cash equivalents of $198 million compared with $153.9 million recorded in the previous quarter. The company had long-term debt of $900 million as of June 30, 2026.
In the second quarter of 2026, PAYC generated operating cash flow of approximately $213.8 million, paid out $17.9 million in dividends and bought back $345.9 million worth of its common stock.
Paycom Raises 2026 Guidance
Following the second-quarter performance, management raised its full-year 2026 guidance ranges. For 2026, Paycom expects total revenues of $2.197-$2.212 billion, implying year-over-year growth of 7-8%, up from its prior range of $2.175-$2.195 billion.
The company projects recurring and other revenues to grow 8-9% year over year, up from its prior range of 7-8%. PAYC forecasts revenues from Interest on funds held for clients to be $105 million, up from the prior projection of $103 million.
Paycom expects its 2026 adjusted EBITDA to be between $1.007 billion and $1.022 billion, translating to an adjusted EBITDA margin of approximately 46% at the midpoint, up from the earlier guided range of $950 million to $970 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a upward trend in estimates review.
The consensus estimate has shifted 20.03% due to these changes.
VGM Scores
At this time, Paycom has a average Growth Score of C, a score with the same score on the momentum front. Following the exact same course, the stock was allocated a score of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Paycom has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Paycom is part of the Zacks Internet - Software industry. Over the past month, EverQuote (EVER - Free Report) , a stock from the same industry, has gained 6.3%. The company reported its results for the quarter ended June 2026 more than a month ago.
EverQuote reported revenues of $195.09 million in the last reported quarter, representing a year-over-year change of +24.6%. EPS of $0.65 for the same period compares with $0.39 a year ago.
EverQuote is expected to post earnings of $0.67 per share for the current quarter, representing a year-over-year change of +34%. Over the last 30 days, the Zacks Consensus Estimate has changed +24.4%.
EverQuote has a Zacks Rank #4 (Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.