Paycom Software (PAYC) Q1 2026 earnings summary

Executive summary

• First quarter 2026 revenues reached $572 million, up 8% year-over-year, driven by new client additions, expanded product usage, and automation and AI initiatives like Beti, GONE, and IWant, which delivered measurable client ROI and efficiency gains.

• Recognized as a top HR and payroll provider, earning industry awards and high Net Promoter Scores, supporting strong client retention and workplace excellence.

• Net income rose to $156 million ($3.04 per diluted share), with non-GAAP net income at $161 million ($3.15 per diluted share), and adjusted EBITDA at $275 million, reflecting a 48.2% margin.

• Only about 5% of the addressable market is currently served, highlighting significant long-term growth opportunity.

Financial highlights

• Total revenue reached $572 million, up 8% year-over-year; recurring and other revenue was $544 million, up 9%.

• Adjusted EBITDA was $275 million, with a margin expansion to 48.2% year-over-year.

• Operating income increased to $210.2 million, and free cash flow was $182.7 million with a 31.9% margin.

• Ended the quarter with $154 million in cash and cash equivalents.

• Operating expenses rose 4.7% to $361.7 million, with administrative expenses up 5.2%.

Outlook and guidance

• Full-year 2026 revenue guidance reaffirmed at $2.175–$2.195 billion, representing 6–7% growth year-over-year.

• Recurring and other revenue expected to grow 7–8% year-over-year.

• Full-year adjusted EBITDA projected at $950–$970 million, with a 44% margin at midpoint.

• Interest on funds held for clients expected to contribute $103 million to total revenue.

• Management expects continued growth through new client acquisition, expanded application adoption, and international expansion.