Paycom Software (PAYC) Q4 2025 earnings summary

Executive summary

• Achieved double-digit recurring revenue growth and near-record adjusted EBITDA margins in 2025, driven by automation, AI innovation, and client ROI focus.

• Revenue retention improved to 91% in 2025, with a record number of clients returning and client count growing to 39,200 (up 4%) and parent company groupings to 20,300 (up 5%).

• Launched new automated decisioning tools, including AI-driven IWant, Beti, and GONE, enhancing client productivity and satisfaction.

• Expanded sales teams and invested in training to support new product enhancements and go-to-market strategies.

• Continued investment in AI-driven automation and product innovation.

Financial highlights

• Q4 2025 total revenue was $544 million, up 10% year-over-year; recurring and other revenue reached $517 million, up 11%.

• Full year 2025 total revenue was $2.05 billion, recurring and other revenue $1.94 billion, both up 10% year-over-year.

• Adjusted EBITDA margin in Q4 was 43.4% ($236 million); full year adjusted EBITDA grew 14% to $882 million, with a 43% margin.

• Full year GAAP net income was $453 million ($8.08 per diluted share); non-GAAP net income was $519 million ($9.24 per share).

• Operating cash flow rose 27% to $679 million (33% margin); free cash flow was $404 million, up 20% year-over-year.

Outlook and guidance

• Fiscal 2026 revenue expected between $2.175 billion and $2.195 billion, representing 6%-7% growth.

• Recurring and other revenues projected to grow 7%-8% year-over-year in 2026.

• Adjusted EBITDA for 2026 forecasted at $950-$970 million, with a margin of approximately 44%.

• Guidance includes $103 million in interest on client funds, assuming two rate cuts in 2026.