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Paycom (PAYC) Q2 Earnings and Revenues Surpass Estimates
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Paycom Software (PAYC - Free Report) reported second-quarter 2024 results, wherein both the top and bottom lines surpassed the Zacks Consensus Estimate.
The online payroll and human resource technology provider reported non-GAAP earnings of $1.62 per share in the second quarter, beating the Zacks Consensus Estimate of $1.58. The bottom line remained unchanged year over year as the benefits of higher revenues and lower share counts were offset by increased operating expenses and income taxes.
Paycom reported revenues of $437.5 million, beating the consensus mark of $436.2 million. The top line climbed 9.1% year over year. The figure was toward the high end of management’s guidance of $434-$438 million. The top line benefited from increased sales momentum, international expansion and integration of AI in its products.
Paycom Software, Inc. Price, Consensus and EPS Surprise
Paycom’s Recurring revenues (representing 98.4% of the total revenues) improved 9.1% to $430.4 million in the second quarter. Our estimate for the company’s Recurring revenues was pegged at $428.5 million.
The company’s revenues from the Implementation and Other segment improved to $7.1 million from $6.6 million in the year-ago quarter and contributed 1.6% to total sales. Our estimate for the segment’s revenues was pegged at $7.6 million.
Adjusted gross profits climbed 6.2% from the year-ago period to $357.8 million. However, the adjusted gross margin contracted 220 basis points (bps) on a year-over-year basis to 81.8%.
Paycom’s adjusted EBITDA increased 2% year over year to $159.7 million. The adjusted EBITDA margin contracted 250 bps to 36.5%.
Balance Sheet & Cash Flow
Paycom exited the second quarter with cash and cash equivalents of $346.5 million compared with $371.3 million recorded in the previous quarter. The company had no debt as of Jun 30, 2024, as it paid off all its long-term debt at the end of 2023.
In the first-half of 2024, PAYC generated an operating cash flow of approximately $280.7 million, paid out $42.4 million in dividends and bought back $80.8 million worth of its common stock.
The company had $1.5 billion remaining under its buyback authorization as of Jun 30, 2024. Paycom’s board has approved its upcoming quarterly dividend of 37.5 cents per share, payable in the middle of September 2024.
Guidance
For the third quarter of 2024, Paycom forecasts revenues in the range of $444-$449 million and expects adjusted EBITDA between $155 million and $159 million.
For 2024, PAYC now forecasts revenues in the band of $1.860-$1.875 billion compared with the previous guidance of $1.860-$1.885 billion. Paycom now expects its 2024 adjusted EBITDA between $727 million and $737 million, up from the earlier projection of $720-$730 million.
Zacks Rank & Stocks to Consider
Paycom currently carries a Zacks Rank #3 (Hold). Shares of PAYC have plunged 19.3% year to date (YTD).
The consensus mark for Twilio’s 2024 earnings has been revised upward by 2 cents to $3.12 per share over the past 30 days, indicating a 27.4% increase from 2023. It has a long-term earnings growth expectation of 33%. The stock has plunged 22% YTD.
The Zacks Consensus Estimate for NVIDIA’s fiscal 2025 earnings has been revised upward by a penny to $2.69 per share in the past 30 days, suggesting year-over-year growth of 107%. The long-term estimated earnings growth rate for the stock is 37.6%. The stock has gained 140.3% YTD.
The Zacks Consensus Estimate for Appfolio’s 2024 earnings has been revised downward by 2 cents to $3.98 per share in the past 60 days, indicating an increase of 132.8% on a year-over-year basis. Shares of APPF have jumped 27.9% YTD.
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Paycom (PAYC) Q2 Earnings and Revenues Surpass Estimates
Paycom Software (PAYC - Free Report) reported second-quarter 2024 results, wherein both the top and bottom lines surpassed the Zacks Consensus Estimate.
The online payroll and human resource technology provider reported non-GAAP earnings of $1.62 per share in the second quarter, beating the Zacks Consensus Estimate of $1.58. The bottom line remained unchanged year over year as the benefits of higher revenues and lower share counts were offset by increased operating expenses and income taxes.
Paycom reported revenues of $437.5 million, beating the consensus mark of $436.2 million. The top line climbed 9.1% year over year. The figure was toward the high end of management’s guidance of $434-$438 million. The top line benefited from increased sales momentum, international expansion and integration of AI in its products.
Paycom Software, Inc. Price, Consensus and EPS Surprise
Paycom Software, Inc. price-consensus-eps-surprise-chart | Paycom Software, Inc. Quote
Quarter in Detail
Paycom’s Recurring revenues (representing 98.4% of the total revenues) improved 9.1% to $430.4 million in the second quarter. Our estimate for the company’s Recurring revenues was pegged at $428.5 million.
The company’s revenues from the Implementation and Other segment improved to $7.1 million from $6.6 million in the year-ago quarter and contributed 1.6% to total sales. Our estimate for the segment’s revenues was pegged at $7.6 million.
Adjusted gross profits climbed 6.2% from the year-ago period to $357.8 million. However, the adjusted gross margin contracted 220 basis points (bps) on a year-over-year basis to 81.8%.
Paycom’s adjusted EBITDA increased 2% year over year to $159.7 million. The adjusted EBITDA margin contracted 250 bps to 36.5%.
Balance Sheet & Cash Flow
Paycom exited the second quarter with cash and cash equivalents of $346.5 million compared with $371.3 million recorded in the previous quarter. The company had no debt as of Jun 30, 2024, as it paid off all its long-term debt at the end of 2023.
In the first-half of 2024, PAYC generated an operating cash flow of approximately $280.7 million, paid out $42.4 million in dividends and bought back $80.8 million worth of its common stock.
The company had $1.5 billion remaining under its buyback authorization as of Jun 30, 2024. Paycom’s board has approved its upcoming quarterly dividend of 37.5 cents per share, payable in the middle of September 2024.
Guidance
For the third quarter of 2024, Paycom forecasts revenues in the range of $444-$449 million and expects adjusted EBITDA between $155 million and $159 million.
For 2024, PAYC now forecasts revenues in the band of $1.860-$1.875 billion compared with the previous guidance of $1.860-$1.885 billion. Paycom now expects its 2024 adjusted EBITDA between $727 million and $737 million, up from the earlier projection of $720-$730 million.
Zacks Rank & Stocks to Consider
Paycom currently carries a Zacks Rank #3 (Hold). Shares of PAYC have plunged 19.3% year to date (YTD).
Some better-ranked stocks in the broader technology sector are Twilio (TWLO - Free Report) , NVIDIA (NVDA - Free Report) and Appfolio (APPF - Free Report) . Currently, Twilio sports a Zacks Rank #1 (Strong Buy), while NVIDIA and Appfolio carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus mark for Twilio’s 2024 earnings has been revised upward by 2 cents to $3.12 per share over the past 30 days, indicating a 27.4% increase from 2023. It has a long-term earnings growth expectation of 33%. The stock has plunged 22% YTD.
The Zacks Consensus Estimate for NVIDIA’s fiscal 2025 earnings has been revised upward by a penny to $2.69 per share in the past 30 days, suggesting year-over-year growth of 107%. The long-term estimated earnings growth rate for the stock is 37.6%. The stock has gained 140.3% YTD.
The Zacks Consensus Estimate for Appfolio’s 2024 earnings has been revised downward by 2 cents to $3.98 per share in the past 60 days, indicating an increase of 132.8% on a year-over-year basis. Shares of APPF have jumped 27.9% YTD.