Key Highlights

  • Third-quarter total Revenue rose 10.2% to USD 543.8 million from USD 493.3 million, and recurring and other revenue grew 11.3% to USD 519.3 million, or 95.5% of the total.
  • GAAP Net Income was USD 133.2 million, or USD 2.99 per diluted share, against USD 110.7 million, or USD 1.96, while non-GAAP net income was USD 150.0 million, or USD 3.37 per share.
  • Adjusted EBITDA reached USD 268.1 million, about 49% of revenue, compared with USD 194.3 million a year earlier, a rise of roughly 38% (calculated).
  • Cash and cash equivalents were USD 193.9 million at September 30, 2026, down from USD 370.0 million at December 31, 2025, and the company paid USD 16.7 million of dividends.

Profit Outpaces Revenue at Paycom Software (NYSE:PAYC)

Paycom Software (NYSE:PAYC) reported third-quarter 2026 results on November 4, 2026. Revenue of USD 543.8 million grew 10.2%, but GAAP net income rose faster, from USD 110.7 million to USD 133.2 million, or 24% of revenue. GAAP Diluted Earnings per Share climbed from USD 1.96 to USD 2.99, which is about 53% higher (calculated). The company provides cloud-based Human Capital management software that automates HR and Payroll tasks, and it also promotes an AI engine called IWant. Founder and Chief Executive Chad Richison attributed the results to returns clients see from automated decisioning built into the platform.

Non-GAAP Earnings and the EBITDA Margin Gap

Non-GAAP earnings grew much faster than the GAAP figure. Non-GAAP net income of USD 150.0 million, or USD 3.37 per diluted share, adds back items such as non-cash stock-based compensation, net of tax, and compares with USD 109.6 million, or USD 1.94, a year earlier. USD 3.37 against USD 1.94 is a rise of about 74% (calculated), versus about 53% on a GAAP basis. Adjusted EBITDA of USD 268.1 million, a non-GAAP measure, produced a margin near 49%. The release did not explain what drove the year-over-year margin jump beyond revenue growth, so that driver remains unstated.

Raised Outlook, Lower Cash Balance and Dividend

Paycom raised its full-year outlook, now guiding to total revenue of USD 2.213 billion to USD 2.218 billion, about 8% growth, and recurring and other revenue growth near 9%. Interest on funds held for clients is expected at about USD 107.0 million. Adjusted EBITDA is guided to USD 1.069 billion to USD 1.079 billion, a 48.5% margin at the midpoint. The prior ranges were not in the release. Cash and equivalents fell about USD 176.1 million (calculated) since December 31, 2025, and the quarter included USD 16.7 million of dividends. The release does not detail other uses of cash. Guided full-year revenue growth of about 8% sits below the 10.2% reported for the third quarter.

Where Things Stand

A 49% adjusted EBITDA margin looks sustainable only if revenue growth and cost control continue to hold. Paycom Software (NYSE:PAYC) delivered a 10.2% revenue gain and a much faster profit increase in the third quarter, and it lifted guidance, which implies a full-year margin of 48.5% at the midpoint. The caution is the pace: full-year revenue growth of about 8% is below the third-quarter rate, interest income on client funds is a meaningful input, and cash declined. Watch the next Quarterly Report and how the margin compares with that guided midpoint.