Key Highlights

  • Revenue was USD 543.8 million against an estimate of USD 535.26 million and USD 493.3 million a year earlier.
  • Non-GAAP EPS was USD 3.37 against an estimate of USD 2.81, while GAAP diluted EPS was USD 2.99.
  • Adjusted EBITDA was USD 268.1 million, a Margin of 49.3%, against USD 194.3 million a year earlier.
  • Full-year 2026 Revenue guidance is USD 2.213 billion to USD 2.218 billion, described as growth of approximately 8%.

How did a quarter that sat inside USD 1,390.9 million of nine-month stock repurchases turn out for Paycom Software (NYSE:PAYC)? Third quarter revenue was USD 543.8 million, against USD 493.3 million a year earlier and an estimate of USD 535.26 million. Non-GAAP EPS was USD 3.37 against an estimate of USD 2.81, and GAAP diluted EPS was USD 2.99. Founder and CEO Chad Richison said clients are realizing returns from the platform's automated decisioning logic and that the company is raising its full-year outlook again.

Borrowing and Buybacks Around the Quarter

The Cash Flow Statement shows how the Balance Sheet changed. Over nine months, Paycom borrowed USD 900.0 million under its Credit facility, repaid USD 150.0 million and repurchased common stock for USD 1,390.9 million, against USD 218.9 million in the same period of 2025. Long-term Debt was USD 750.0 million at September 30, with none at December 31, 2025.

Shares outstanding were 44.3 million at September 30, against 54.8 million at year end, and treasury stock at cost was USD 2,819.2 million against USD 1,403.4 million. Cash and cash equivalents were USD 193.9 million, against USD 370.0 million at December 31, 2025. Dividends paid were USD 16.7 million in the quarter and USD 52.2 million over nine months.

Revenue, Margins and Net Income

Recurring and other revenue was USD 519.3 million, up 11.3% and 95.5% of total revenue, while interest on funds held for clients was USD 24.5 million against USD 26.8 million. Gross Profit was USD 456.6 million, a gross margin of 84.0% against 82.7%. Operating Income was USD 195.8 million, against USD 112.6 million.

Administrative expenses were USD 260.8 million against USD 295.3 million. Within them, Research and Development was USD 38.5 million against USD 74.1 million, and sales and Marketing was USD 108.0 million against USD 125.7 million, while general and administrative expense was USD 88.2 million against USD 71.9 million. Interest expense was USD 11.7 million against USD 1.1 million.

GAAP Net Income was USD 133.2 million, or 24.5% of revenue, against USD 110.7 million a year earlier. Non-GAAP net income was USD 150.0 million against USD 109.6 million. Adjusted EBITDA for nine months was USD 778.5 million, a margin of 47.3%.

Cash Generation and the 2026 Guidance

Net cash from Operating Activities for nine months was USD 613.9 million against USD 482.8 million, and purchases of property and equipment were USD 77.4 million against USD 197.4 million. Free cash flow, a non-GAAP measure, was USD 536.5 million against USD 285.4 million.

Guidance for the year ending December 31, 2026 calls for total revenue of USD 2.213 billion to USD 2.218 billion, which the company described as growth of approximately 8%, and recurring and other revenue growth of approximately 9%. It also projects interest on funds held for clients of approximately USD 107.0 million and adjusted EBITDA of USD 1.069 billion to USD 1.079 billion, a margin of 48.5% at the midpoint.

Reference Points for Investors

Revenue of USD 543.8 million sits alongside adjusted EBITDA of USD 268.1 million, GAAP net income of USD 133.2 million and cash of USD 193.9 million. Management pointed to guidance of USD 2.213 billion to USD 2.218 billion in revenue and approximately USD 107.0 million of interest on funds held for clients for the year. Nine-month repurchases of USD 1,390.9 million and long-term debt of USD 750.0 million are the Capital items the company disclosed, and the company stated it does not reconcile its forward adjusted EBITDA range to net income.