On February 12, 2025, Paycom Software Inc (PAYC, Financial) released its 8-K filing reporting robust financial results for the fourth quarter and full year of 2024. Paycom, a leading provider of payroll and human capital management software, primarily serves clients with 50-10,000 employees in the United States. Established in 1998, the company now services approximately 19,500 clients as of 2023.
Paycom Software Inc (PAYC, Financial) reported a significant increase in both quarterly and annual revenues, showcasing its strong market position. The company achieved fourth-quarter revenues of $493.8 million, marking a 13.6% increase from the same period last year. This performance exceeded the analyst estimate of $480.81 million. For the full year, revenues reached $1,883.2 million, an 11.2% increase year-over-year, surpassing the estimated $1,870.71 million.
Despite these achievements, Paycom faces challenges such as maintaining its high revenue retention rate, which stood at 90% for 2024, consistent with the previous year. The company must continue to innovate and expand its client base to sustain growth.
Paycom's financial achievements are noteworthy, particularly its full-year GAAP net income of $502 million, representing 27% of total revenues, or $8.92 per diluted share. This figure surpasses the annual estimated earnings per share of $8.49. The company's adjusted EBITDA for the year was $775 million, accounting for 41% of total revenues, highlighting its operational efficiency and profitability.
These achievements are crucial in the software industry, where scalability and profitability are key indicators of success. Paycom's ability to deliver strong financial results underscores its competitive advantage in the human capital management software market.
Paycom's income statement reveals a GAAP net income of $113.6 million for Q4 2024, or $2.02 per diluted share, compared to $81.8 million, or $1.43 per diluted share, in the same period last year. The non-GAAP net income was $130.1 million, or $2.32 per diluted share, up from $110.2 million, or $1.93 per diluted share, last year.
The balance sheet shows a strong liquidity position with cash and cash equivalents of $402 million as of December 31, 2024, up from $294 million the previous year. Notably, Paycom reported zero total debt, reflecting a solid financial foundation.
In 2024, Paycom received several accolades, including being named one of the World’s Best Companies by Time magazine. The company also expanded its sales operations by opening new offices in Raleigh, Los Angeles, and Providence, indicating its commitment to growth and market penetration.
Paycom's client count on a taxpayer identification number basis increased by 2% to 37,543, while the company stored data for over 7 million employees, a 3% increase from the previous year. These metrics highlight Paycom's expanding reach and customer base.
Paycom Software Inc (PAYC, Financial) has demonstrated strong financial performance, exceeding analyst expectations in both revenue and earnings per share. The company's strategic focus on automation and client ROI has driven its success, as noted by CEO Chad Richison:
Our solution remains the most automated on the market and is delivering strong ROI for our clients."
Looking ahead, Paycom's financial guidance for 2025 projects total revenue between $2.015 billion and $2.035 billion, with an adjusted EBITDA range of $820 million to $840 million. These projections indicate continued growth and profitability, positioning Paycom as a leader in the human capital management software industry.
Explore the complete 8-K earnings release (here) from Paycom Software Inc for further details.
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