Paycom Software, Inc. (PAYC) Earnings
Paycom Software, Inc. is expected to report next earnings on November 4, 2026 (in NaN days), with a consensus EPS estimate of $2.82. PAYC has beaten EPS estimates in 10 of its last 12 reported quarters (average surprise +5.5% over the last four).
| Report date | EPS est | EPS actual | Surprise | Revenue | Rev. surprise |
|---|---|---|---|---|---|
| Aug 5, 2026 | $2.38 | $2.78 | +16.8% | $531M | +3.5% |
| May 6, 2026 | $2.99 | $3.15 | +5.4% | $572M | +1.3% |
| Feb 11, 2026 | $2.44 | $2.45 | +0.4% | $544M | -3.9% |
| Nov 5, 2025 | $1.95 | $1.94 | -0.5% | $493M | +0.1% |
| May 7, 2025 | $2.57 | $2.80 | +8.9% | $531M | +1.0% |
| Feb 12, 2025 | $1.99 | $2.32 | +16.6% | $494M | +2.6% |
| Oct 30, 2024 | $1.61 | $1.67 | +3.7% | $452M | -6.2% |
| Jul 31, 2024 | $1.58 | $1.62 | +2.5% | $438M | +0.2% |
| May 1, 2024 | $2.43 | $2.59 | +6.6% | $500M | +0.8% |
| Feb 7, 2024 | $1.78 | $1.93 | +8.4% | $435M | +2.8% |
| Oct 31, 2023 | $1.62 | $1.77 | +9.3% | $406M | -1.2% |
| May 2, 2023 | $2.35 | $2.46 | +4.5% | $452M | +1.5% |
Source: company filings + earnings calendar. For informational purposes only — not investment advice.
Earnings call summary
Q2 FY2026 · August 5, 2026
AI summary of management’s prepared remarks and analyst Q&A. For informational purposes only — not investment advice.
Management highlights
- New Product Launches * Launched the new career and succession planning solution earlier in 2026, with solid client adoption; this automated product helps organizations identify talent gaps, assess talent readiness, and map successors for key leadership roles. * Released the new Asset Management solution in July 2026, expanding Paycom's addressable market into an entirely new multi-billion dollar TAM integrated into the company's existing software ecosystem. It enables clients to track, deploy, and recover physical and digital assets, improve compliance and security, and reduce lost property, with early strong client feedback post-launch. - Platform Wide Innovation * Released Project Arc, the largest system-wide update in Paycom's history, which delivers customized, personalized user experiences, improved scalability, and significant system performance gains (one large client reported a 4x performance increase). Client feedback has been overwhelmingly positive. * The award-winning AI solution iWANT continues to automate in-platform tasks and events, improve usability for new users, and accelerate speed to value for clients, with ongoing expansion of AI and automation across the platform. - Operational & Brand Recognition * Paycom received multiple industry accolades in the quarter, including the 2026 Top-Rated Award from Trust Radius, a spot on Newsweek's Greatest Workplaces in Tech list, and inclusion on Selling Power's 60 Best Companies to Sell For list. * Capital Allocation: Management opportunistically repurchased 2.6 million shares (approximately 6% of outstanding shares) for $346 million in Q2 2026; in the first half of 2026, total share repurchases reached nearly 11 million shares, reducing outstanding shares by 20% and returning ~$1.4 billion to shareholders. The company ended Q2 with ~44 million shares outstanding and $1.66 billion remaining in buyback authorization, and approved a new quarterly dividend of 37.5 cents per share payable in September 2026. * The company maintained a strong liquidity position, with $198 million in cash and cash equivalents at quarter end, and $1.66 billion of undrawn capacity on its $2.1 billion revolving credit facility.
Guidance
Based on strong first half 2026 performance, management upwardly revised full-year 2026 guidance: * Total revenue is expected to be between $2.197 billion and $2.212 billion, representing 7% to 8% year-over-year growth. The outlook includes ~$105 million in interest from funds held for clients, based on the assumption that current interest rates will hold for the remainder of the year. * Full-year recurring and other revenue is expected to grow 8% to 9% year-over-year. * Adjusted EBITDA is now projected to be between $1.007 billion and $1.022 billion, with a record 46% adjusted EBITDA margin at the midpoint of the range, driven by ongoing benefits from company-wide automation initiatives. * Management now expects full-year 2026 free cash flow to exceed $650 million. * Key 2026 financial assumptions: GAAP tax rate of 29%, non-GAAP tax rate of 27%, and stock-based compensation equal to 3% of total revenue.
Segment performance
The transcript does not break out financial performance for separate product segments. Aggregate company performance for Q2 2026 is: total revenue of $531 million (up 10% YoY); recurring and other revenue of $505 million (up 11% YoY); GAAP net income of $107 million (up 20% YoY, or $2.34 per diluted share); non-GAAP net income of $128 million (or $2.78 per diluted share); adjusted EBITDA of $235 million, with a 44.2% margin (up 320 basis points YoY).
Risks & headwinds
No explicit discussion of business risks or operational failures was included in the provided transcript.
Analyst Q&A
Q: The quarter delivered a much larger revenue beat than recent periods, with strong acceleration. Were there any special one-off factors driving this strength, and have the newly launched products already contributed to revenue? /
A: Management stated the revenue strength was broad-based and came from the same consistent demand drivers that have historically fueled growth. New products launched in the last three months (including Asset Management, released just weeks before the quarter end) did not make a meaningful contribution to Q2 results, though one product contributed a small amount. Management expects both new products to contribute more significantly to revenue in future quarters.
Q: How is Paycom using AI to enable its internal sales organization, improve productivity, and impact plans for sales headcount or office expansion? /
A: Management noted AI assists with prospecting by identifying trends and targeting potential clients, but Paycom remains a primarily high-touch sales organization. The company has added in-app purchasing functionality that allows existing clients to buy new products (such as Career and Succession Planning) directly without going through the traditional sales process.
Q: Following the aggressive share buyback activity in the first half of 2026, will capital allocation become more balanced going forward, or will buybacks remain the top priority? /
A: Management noted that 2025 capital expenditures for in-house data center capacity to host internal AI models will produce $100 million in annual R&D savings and over $30 million in third-party API fee savings starting in 2026, while also improving overall system performance. Capital expenditures will return to more normalized levels going forward. Management reaffirmed that the company's strong free cash flow generation supports ongoing opportunistic buybacks as a core part of its capital return strategy.
Q: What is driving the improved free cash flow conversion from EBITDA in 2026, and what is the framework for conversion rates moving forward beyond 2026? /
A: The transcript cut out during management's response to this question due to technical difficulties, so no answer was provided in the excerpt.