Paycom Q3 results beat analyst estimates on automated decisioning; raises FY outlook

Paycom Software

Wed 21:15

Overview
Cloud HR software firm's Q3 revenue rose 10% yr/yr, beating analyst expectations
Adjusted EPS for Q3 beat analyst expectations
Company raised full-year outlook, citing strong client adoption of automation features

Outlook
Paycom raises 2026 revenue outlook to $2.213 bln-$2.218 bln, up about 8% yr/yr
Company expects 2026 recurring and other revenue growth of about 9% yr/yr
Paycom sees 2026 adj EBITDA at $1.069 bln-$1.079 bln, margin of 48.5% at midpoint

Result Drivers
AUTOMATED DECISIONING - Co said Q3 results benefited from client adoption of automated decisioning logic in its platform
RECURRING REVENUE GROWTH - Recurring and other revenues rose 11% yr/yr and made up over 95% of total revenue, per co
LOWER SALES AND MARKETING EXPENSES - Co reported a decrease in sales and marketing expenses as a percentage of revenue compared to last year

Company press release: ID:nBw57sZqna

Key Details
Metric
Beat/Miss
Actual
Consensus Estimate
Q3 Revenue
Beat
$543.80 mln
$535.29 mln (20 Analysts)
Q3 Adjusted EPS
Beat
$3.37
$2.81 (20 Analysts)
Q3 EPS
 
$2.99
 
Q3 Adjusted Net Income
Beat
$150 mln
$125.96 mln (19 Analysts)
Q3 Net Income
 
$133.20 mln
 
Q3 Adjusted EBITDA
Beat
$268 mln
$236.02 mln (19 Analysts)
Q3 Operating Income
 
$195.80 mln
 
Q3 Pretax Profit
 
$185.30 mln
 

Analyst Coverage
The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 7 "strong buy" or "buy", 14 "hold" and 1 "sell" or "strong sell"
The average consensus recommendation for the software peer group is "buy."
Wall Street's median 12-month price target for Paycom Software, Inc. is $264.50, about 0.6% above its November 3 closing price of $262.99
The stock recently traded at 19 times the next 12-month earnings vs. a P/E of 14 three months ago

Reuters Recommended Reads
Nov 3 - Freshworks Q3 adjusted profit beats estimates on upmarket momentum
Nov 3 - Arista Networks Q3 revenue beats estimates on strong momentum across customer sectors
Nov 3 - Fintech firm Jack Henry's Q1 revenue, EPS rise on cloud, payments demand

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)