Paycom Reports Strong Q4 2025 Earnings with Automation Focus
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
0mins
Should l Buy PAYC?
Source: seekingalpha
- Significant Revenue Growth: Paycom achieved total revenue of $2.05 billion in 2025, reflecting a 10.2% year-over-year increase, with recurring revenue at $1.94 billion, surpassing initial expectations and demonstrating strong market performance.
- Improved Client Retention: The client retention rate rose to 91% in 2025, indicating ongoing enhancements in customer satisfaction and service quality, which bolsters future revenue stability.
- Strong EBITDA Performance: Adjusted EBITDA for Q4 reached $236.3 million, with an EBITDA margin of 43.4%, showcasing the company's success in cost control and operational efficiency.
- Cautious Future Outlook: Despite projecting revenue growth of 6% to 7% for 2026, management remains optimistic about market opportunities, emphasizing that automation and new client acquisition will be key drivers of future growth.
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Analyst Views on PAYC
Wall Street analysts forecast PAYC stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for PAYC is 201.82 USD with a low forecast of 165.00 USD and a high forecast of 245.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
14 Analyst Rating
3 Buy
11 Hold
0 Sell
Hold
Current: 124.940
Low
165.00
Averages
201.82
High
245.00
Current: 124.940
Low
165.00
Averages
201.82
High
245.00
About PAYC
Paycom Software, Inc. is a provider of a comprehensive, cloud-based human capital management (HCM) solution delivered as software-as-a-service (SaaS). The Company provides functionality and data analytics that businesses need to manage the complete employment lifecycle, from recruitment to retirement. Its solution requires virtually no customization and is based on a core system of record maintained in a single database for all HCM functions, including talent acquisition, time and labor management, payroll, talent management and human resources (HR) management applications. The Company's applications streamline client processes and provide clients and their employees with the ability to directly access and manage administrative processes, including applications that identify candidates, on-board employees, manage time and labor, administer payroll deductions and benefits, manage performance, terminate employees and administer post-termination health benefits, such as COBRA.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Paycom Reports Strong Q4 2025 Earnings with Automation Focus
- Significant Revenue Growth: Paycom achieved total revenue of $2.05 billion in 2025, reflecting a 10.2% year-over-year increase, with recurring revenue at $1.94 billion, surpassing initial expectations and demonstrating strong market performance.
- Improved Client Retention: The client retention rate rose to 91% in 2025, indicating ongoing enhancements in customer satisfaction and service quality, which bolsters future revenue stability.
- Strong EBITDA Performance: Adjusted EBITDA for Q4 reached $236.3 million, with an EBITDA margin of 43.4%, showcasing the company's success in cost control and operational efficiency.
- Cautious Future Outlook: Despite projecting revenue growth of 6% to 7% for 2026, management remains optimistic about market opportunities, emphasizing that automation and new client acquisition will be key drivers of future growth.
See More
Paycom Software's 2026 Revenue Forecast Falls Short of Expectations
- Revenue Forecast Downgrade: Paycom projects its 2026 revenue to be between $2.18 billion and $2.20 billion, falling short of analysts' average estimate of $2.23 billion, indicating a cautious approach amid macroeconomic challenges that may impact investor confidence.
- Stock Price Volatility: Paycom's shares dropped over 7% in after-hours trading as businesses delay or reduce HR and payroll software purchases due to tighter budgets, reflecting market concerns about its future performance.
- Customer Acquisition Challenges: Analysts note that macroeconomic challenges could constrain Paycom's new customer acquisition, particularly as hiring slows or layoffs occur among small and medium-sized businesses, which are crucial to its core client base.
- Intensifying Competition: The human capital management market is becoming increasingly crowded, with Paycom facing pressure from competitors like ADP, Paylocity, and Workday, which could further weaken its market share and profitability.
See More
Paycom (PAYC) Q4 2025 Earnings Call Transcript
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- McDonald's Strong Performance: McDonald's reported fourth-quarter earnings of $3.12 per share and revenues of $7.01 billion, both surpassing analyst expectations, although the stock dipped less than 1%, reflecting its robust position in the fast-food industry.
- AppLovin's Decline: Despite AppLovin posting fourth-quarter earnings of $3.24 per share and revenues of $1.66 billion, exceeding estimates, the stock slid over 4%, indicating market concerns about future performance, with a 32% decline year-to-date.
- Rollins Earnings Shortfall: Rollins reported GAAP earnings of 24 cents per share, below the 26 cents consensus estimate, with revenues of $912.9 million falling short of the $926.8 million forecast, leading to a more than 16% drop in stock price, highlighting pressure in the market.
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Paycom Q4 Earnings Beat Expectations with Significant Shareholder Returns
- Earnings Highlights: Paycom's Q4 non-GAAP EPS of $2.45 aligns with market expectations, while revenue reached $544.3 million, reflecting a 10.2% year-over-year growth and exceeding forecasts by $1.51 million, indicating strong market performance.
- Adjusted EBITDA Growth: The adjusted EBITDA of $236.3 million represents a 9.9% increase from $214.9 million in the same period last year, showcasing the company's ongoing improvements in cost control and operational efficiency, thereby enhancing profitability.
- Cash Flow and Shareholder Returns: As of December 31, 2025, cash and cash equivalents stood at $370 million, down from $402 million a year earlier; however, the company paid $20.6 million in cash dividends and repurchased 554,226 shares for a total of $108.8 million, demonstrating a strong commitment to shareholder returns.
- Debt-Free Status: Paycom reported zero total debt as of December 31, 2025, maintaining a healthy financial position that provides ample flexibility for future investments and expansions, further bolstering market confidence.
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Stocks Show Mixed Performance Following Disappointing Retail Sales Data
- Market Performance: The S&P 500 was close to achieving its first record of the month but ultimately did not reach that milestone.
- Investor Sentiment: The near-record performance reflects fluctuating investor confidence in the market's direction.
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Paycom Reports Strong Q4 2025 Earnings with Automation Focus
- Significant Revenue Growth: Paycom achieved total revenue of $2.05 billion in 2025, reflecting a 10.2% year-over-year increase, with recurring revenue at $1.94 billion, surpassing initial expectations and demonstrating strong market performance.
- Improved Client Retention: The client retention rate rose to 91% in 2025, indicating ongoing enhancements in customer satisfaction and service quality, which bolsters future revenue stability.
- Strong EBITDA Performance: Adjusted EBITDA for Q4 reached $236.3 million, with an EBITDA margin of 43.4%, showcasing the company's success in cost control and operational efficiency.
- Cautious Future Outlook: Despite projecting revenue growth of 6% to 7% for 2026, management remains optimistic about market opportunities, emphasizing that automation and new client acquisition will be key drivers of future growth.
See More
Paycom Software's 2026 Revenue Forecast Falls Short of Expectations
- Revenue Forecast Downgrade: Paycom projects its 2026 revenue to be between $2.18 billion and $2.20 billion, falling short of analysts' average estimate of $2.23 billion, indicating a cautious approach amid macroeconomic challenges that may impact investor confidence.
- Stock Price Volatility: Paycom's shares dropped over 7% in after-hours trading as businesses delay or reduce HR and payroll software purchases due to tighter budgets, reflecting market concerns about its future performance.
- Customer Acquisition Challenges: Analysts note that macroeconomic challenges could constrain Paycom's new customer acquisition, particularly as hiring slows or layoffs occur among small and medium-sized businesses, which are crucial to its core client base.
- Intensifying Competition: The human capital management market is becoming increasingly crowded, with Paycom facing pressure from competitors like ADP, Paylocity, and Workday, which could further weaken its market share and profitability.
See More
Paycom (PAYC) Q4 2025 Earnings Call Transcript
See More
Cisco's Earnings Miss Expectations, Stock Drops
- Cisco Earnings Miss: Cisco's non-GAAP gross margin of 67.5% fell short of the 68.1% estimate, resulting in a 7% drop in stock price, despite second-quarter results exceeding expectations, indicating ongoing competitive strength in the market.
- McDonald's Strong Performance: McDonald's reported fourth-quarter earnings of $3.12 per share and revenues of $7.01 billion, both surpassing analyst expectations, although the stock dipped less than 1%, reflecting its robust position in the fast-food industry.
- AppLovin's Decline: Despite AppLovin posting fourth-quarter earnings of $3.24 per share and revenues of $1.66 billion, exceeding estimates, the stock slid over 4%, indicating market concerns about future performance, with a 32% decline year-to-date.
- Rollins Earnings Shortfall: Rollins reported GAAP earnings of 24 cents per share, below the 26 cents consensus estimate, with revenues of $912.9 million falling short of the $926.8 million forecast, leading to a more than 16% drop in stock price, highlighting pressure in the market.
See More
Paycom Q4 Earnings Beat Expectations with Significant Shareholder Returns
- Earnings Highlights: Paycom's Q4 non-GAAP EPS of $2.45 aligns with market expectations, while revenue reached $544.3 million, reflecting a 10.2% year-over-year growth and exceeding forecasts by $1.51 million, indicating strong market performance.
- Adjusted EBITDA Growth: The adjusted EBITDA of $236.3 million represents a 9.9% increase from $214.9 million in the same period last year, showcasing the company's ongoing improvements in cost control and operational efficiency, thereby enhancing profitability.
- Cash Flow and Shareholder Returns: As of December 31, 2025, cash and cash equivalents stood at $370 million, down from $402 million a year earlier; however, the company paid $20.6 million in cash dividends and repurchased 554,226 shares for a total of $108.8 million, demonstrating a strong commitment to shareholder returns.
- Debt-Free Status: Paycom reported zero total debt as of December 31, 2025, maintaining a healthy financial position that provides ample flexibility for future investments and expansions, further bolstering market confidence.
See More
Stocks Show Mixed Performance Following Disappointing Retail Sales Data
- Market Performance: The S&P 500 was close to achieving its first record of the month but ultimately did not reach that milestone.
- Investor Sentiment: The near-record performance reflects fluctuating investor confidence in the market's direction.
See More
