Highlights

  • Second quarter revenue rose 9.8% to $531.2 million, and net income rose 20% to $107.4 million, or $2.34 per share.
  • Paycom amended its credit agreement in April, raising revolver commitments to $2.125 billion, with $900.0 million drawn at June 30.
  • Paycom repurchased 10.9 million shares in six months at an average $128.48 and approved a new $2.0 billion plan.
  • Cash fell to $198.0 million from $370.0 million at year-end, while six-month operating cash flow rose 40% to $427.6 million.

Paycom Software (NYSE:PAYC) shares were trading near their 52-week high at USD 262.60 on October 21, 2026, up 0.11%. The cloud-based human capital management provider amended and enlarged its revolving credit facility in April, approved a new $2.0 billion repurchase plan in May, and filed its second quarter report on August 6.

Based in Oklahoma City, Oklahoma, Paycom is a Delaware corporation that offers a software-as-a-service human capital management solution built on a single database. It covers payroll, talent acquisition, talent management, human resources management, and time and labor applications, plus an AI engine called IWant. The company targets organizations with 50 to 10,000 or more employees. Revenues are seasonal, with the first and fourth quarters generally stronger, and its fiscal year ends December 31.

Profit Growth Helped by Lower Headcount-Related Costs

Total revenues for the quarter ended June 30, 2026 were $531.2 million, up from $483.6 million. Recurring and other revenue grew 11.0% to $505.2 million, while interest on funds held for clients fell 8.5% to $26.0 million as lower rates more than offset a higher average balance. Paycom credited new clients, added applications, usage and pricing for the recurring growth, and said client attrition, particularly among smaller clients, partly offset those gains.

Operating income climbed 50.0% to $168.5 million, lifting the operating margin to 31.7% from 23.2%. Net income was $107.4 million against $89.5 million, and diluted earnings per share were $2.34 versus $1.58, helped by a diluted share count of 45.9 million versus 56.5 million. Expensed research and development fell 30.6% to $51.9 million, and capitalized development costs fell to $15.6 million from $36.9 million. Paycom said automating core systems has reduced headcount and employee-related expenses. Interest expense jumped to $10.5 million from $0.8 million on revolver borrowings, and the tax provision rose to $49.5 million from $27.7 million. For six months, revenue was $1,103.1 million, net income was $263.1 million and diluted earnings per share were $5.43 versus $4.06.

Borrowing to Fund Buybacks

The main balance sheet change is borrowing. Before 2026, Paycom funded repurchases, dividends and capital spending from available cash. In the first half it borrowed $900.0 million under its revolver to support buybacks, and the amended and restated credit agreement dated April 23, 2026 raised commitments to $2.125 billion with a maturity of April 23, 2031. Covenants require interest coverage of at least 3.0 to 1.0 and leverage of no more than 3.5 to 1.0, and Paycom reported compliance at June 30.

Over six months it repurchased 10,945,515 shares at an average cost of $128.48, including 125,148 shares withheld for taxes, and $1,655.5 million remained available under the $2.0 billion plan approved May 4, which replaced the prior authorization and has no expiration date. Dividends were $0.375 per share, or $17.1 million, in the quarter, and the board declared another $0.375 on August 3, payable September 8 to holders of record August 24.

Outlook Disclosures and Risks

The quarterly report contains no revenue or earnings guidance. It does state that Paycom expects research and development employee-related expenses to be lower in 2026 than in 2025 because of reduced headcount, and that it expects to meet liquidity needs for at least the next 12 months from cash, operating cash flow and available financing. It may fund further repurchases with a mix of cash and additional revolver borrowings. A tax law change that allows immediate deduction of domestic research expenses reduced cash taxes, and Paycom expects a smaller benefit in future periods.

The company also flags competition, interest rate changes that affect income on client funds, and sensitivity of per-employee fees to client hiring. It reported no material changes to its legal proceedings.