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.

• GAAP net income for 2024 was $502 million (27% of revenues), or $8.92 per diluted share; non-GAAP net income was $462 million ($8.21 per share).

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

• Opened three new sales offices in January 2025, expanding outside sales teams to 57.

Financial highlights

• Recurring and other revenues for 2024 were $1.76 billion (93.4% of total), up 10.9% year-over-year.

• Adjusted EBITDA for 2024 was $775 million (41.2% margin); Q4 adjusted EBITDA was $215 million (43.5% margin).

• Free cash flow in 2024 was $337 million, up 17% year-over-year, with a margin of 17.9%.

• Cash and cash equivalents at year-end were $402 million, with zero debt.

• Total client count at year-end was 37,543, up 2% from 2023.

Outlook and guidance

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

• Recurring and other revenue projected to grow 9% year-over-year.

• Adjusted EBITDA guidance for 2025 is $820–$840 million (41% margin midpoint).

• Interest on funds held for clients expected to be $110 million, down 12% year-over-year.

• First quarter growth expected to be the low point, with acceleration in subsequent quarters.