Paycom Software (PAYC) Q4 2024 earnings summary

Executive summary

• Ended 2024 with strong momentum, driven by focused execution, organic sales growth, and operational efficiency gains.

• Full year 2024 revenues reached $1.88 billion, up 11% year-over-year, with Q4 revenues at $494 million, up 14% year-over-year.

• Transitioned CFO role to Bob Foster, who brings significant industry and financial expertise.

• Opened three new sales offices in January 2025 (Raleigh, Los Angeles, Providence), expanding outside sales teams to 57.

• Recognized for innovation, compensation, company culture, workplace diversity, and received multiple awards in 2024.

Financial highlights

• Full year 2024 revenue reached $1.88 billion, up 11% year-over-year; recurring and other revenue was $1.76 billion, also up 11%.

• Interest on funds held for clients was $125 million, up 16% year-over-year.

• Q4 revenue was $494 million, up 14% year-over-year; recurring and other revenue in Q4 was $465 million, up 14.5%.

• Full year GAAP net income was $502 million ($8.92 per diluted share); non-GAAP net income was $462 million ($8.21 per diluted share).

• Free cash flow for 2024 was $337 million, with a free cash flow margin of 18%.

Outlook and guidance

• Fiscal 2025 revenue expected between $2.015 billion and $2.35 billion, about 8% YoY growth at midpoint.

• Recurring and other revenue expected to grow ~9% YoY; adjusted EBITDA guidance is $820–$840 million (41% margin at midpoint).

• Interest on funds held for clients projected at $110 million, down 12% YoY.

• Effective income tax rate for 2025 anticipated at 29% GAAP, 27% non-GAAP.

• Stock-based compensation expected at 8% of revenue; CAPEX as a percent of revenue to be below 10% in 2025.