Paycom Software (PAYC) Q3 2026 earnings summary

Executive summary

• Q3 revenue rose 10.2% YoY to $543.8M; strong performance and client ROI from automation supported higher FY26 revenue and Adjusted EBITDA guidance.

• Automation, AI-enabled decisioning and platform investments supported client productivity, adoption and expanding profitability.

Financial highlights

• Q3 recurring and other revenue increased 11.3% YoY to $519.3M, or 95.5% of total revenue; interest on client funds was $24.5M.

• Q3 GAAP net income was $133.2M, or $2.99 per diluted share; non-GAAP net income was $150.0M, or $3.37 per diluted share.

• Q3 operating income grew 74.0% to $195.8M; total operating expenses declined 8.6% to $348.0M.

• Q3 Adjusted EBITDA was $268.1M versus $194.3M; 9M Adjusted EBITDA was $778.5M versus $645.9M.

• 9M revenue increased to $1,646.8M, operating income to $574.5M and net income to $396.3M; operating cash flow was $613.9M.

Outlook and guidance

• FY26 revenue guidance increased to $2.213B–$2.218B, implying ~8% YoY growth; recurring and other revenue is expected to grow ~9%.

• FY26 Adjusted EBITDA guidance increased to $1.069B–$1.079B; midpoint margin of 48.5% is 550 bps above FY25.

• FY26 outlook includes ~$107M of interest on client funds, stock-based compensation of ~3% of revenue, CapEx of ~6%, a 29% GAAP tax rate and ~27% non-GAAP tax rate.

• Very strong FY26 free cash flow is expected, with even stronger free cash flow in 2027; management described cash generation as sustainable and durable.

• Management expects Adjusted EBITDA margins to be sustainable through operating efficiencies and automation.