Key Highlights

  • Paycom Software shares are up 12.73% in pre-market trading.
  • Q2 2026 total revenue reached $531 million, up 10% year over year, beating estimates.
  • Adjusted EPS of $2.78 beat consensus estimates by 21.93%.
  • Full-year 2026 revenue guidance was raised to $2.197 billion to $2.212 billion.
  • The company disclosed $346 million in share repurchases in the first half of the year.

Shares Surge on Strong Beat and Raised Guidance

Paycom Software (NYSE:PAYC) is trading sharply higher today after posting second-quarter results that topped Wall Street expectations and raising its full-year outlook. Shares rose as much as 14.02% to $199.30 in after-hours trading Tuesday before settling to a 12.73% pre-market gain, after the HR software provider posted strong results that topped Wall Street expectations.

Paycom Software, founded in 1998 and headquartered in Oklahoma City, Oklahoma, is a leading provider of comprehensive, cloud-based human capital management software delivered as Software-as-a-Service to businesses across the United States. The company reported total revenue of $531 million, up 10% year over year, with recurring revenue of $505 million, up 11% year over year, and GAAP net income up 20% to $107 million.

Guidance Raised as Product Launches Continue

Management raised full-year guidance, now expecting total revenue between $2.197 billion and $2.212 billion, representing 8% to 9% growth, with full-year adjusted EBITDA guidance lifted to $1.007 billion to $1.022 billion, representing a record margin of approximately 46% at midpoint. Free cash flow is expected to reach roughly $650 million in 2026, with CapEx approximately 6% of revenue, GAAP tax rate of 29%, non-GAAP tax rate of 27%, and stock-based compensation at roughly 3% of revenue.

Product innovation continued with the launch of the company's 45th product, Asset Management, in July, plus earlier releases including Career and Succession Planning and Project Arc, a large system-wide client investment history tool. Management noted its AI tool, 'I want', continues to drive automation and is often a new client's first interaction with the platform.

Aggressive Capital Allocation

Capital allocation remained aggressive, with $346 million in share repurchases during the first half of 2026 via 11 million shares, reducing shares outstanding by 20%. The company ended the quarter with $900 million cash against its $2.1 billion revolving credit facility, with $1.66 billion in remaining buyback authorization, and declared a quarterly dividend of $0.375 per share set for early September payment.

Conclusion

Paycom Software's strong quarter and raised guidance reflect broad-based revenue growth alongside continued product innovation and aggressive capital returns to shareholders. With multiple new AI-driven features and a strengthening pipeline, the company appears positioned for continued double-digit adjusted EBITDA growth heading into the back half of 2026.

This article is for informational purposes only and does not constitute financial, investment, or trading advice. Readers should conduct their own research or consult a licensed financial advisor before making any investment decisions.