Paycom Software, Inc.

Paycom said second-quarter total revenue was $531 million, up 10% year over year, and recurring and other revenue was $505 million, up 11%. GAAP net income increased 20% to $107 million, or $2.34 per diluted share; non-GAAP net income was $128 million, or $2.78 per diluted share. Adjusted EBITDA was $235 million, with a 44.2% margin, up 320 basis points year over year. For 2026, management raised total revenue guidance to $2.197 billion-$2.212 billion, implying 7%-8% growth, and said recurring and other revenue should grow 8%-9%. Full-year adjusted EBITDA is now expected to be $1.007 billion-$1.022 billion, which implies a record 46% margin at the midpoint. The company also expects interest on funds held for clients of about $105 million and free cash flow to exceed $650 million in 2026.

Chad Richison said the quarter was strong and broad-based, with results coming in ahead of expectations and demand for automation continuing to increase. He emphasized that Paycom’s full-solution automation, service, and AI-driven product development are resonating with clients, and said the company is positioned to exceed its initial 2026 plan on both revenue and profitability. He highlighted new products including Career and Succession Planning, Asset Management, and Project Arc as evidence of continued innovation and stronger client value.

Robert Foster focused on the financial upside from operating leverage, saying efforts over the last several quarters are driving sustainable margin expansion and earnings growth. He cited $531 million of revenue, $235 million of adjusted EBITDA, 44.2% adjusted EBITDA margin, and a 320-basis-point margin expansion versus last year. He also detailed capital allocation: about 2.6 million shares repurchased in Q2 for $346 million, nearly 11 million shares repurchased in the first half, $1.4 billion returned to stockholders, $198 million of cash and cash equivalents at quarter-end, and $900 million drawn on the $2.1 billion revolver. He said CapEx will be more normalized and reiterated that free cash flow should exceed $650 million in 2026.

Analysts pressed on whether the revenue beat was driven by anything one-time, but Chad said it was broad-based and came from the same buckets as before. Questions also focused on sales productivity, AI enablement, and whether the large first-half buyback means capital allocation will become more balanced; management said AI is helping prospecting, in-app buying is shortening the sales path in some cases, and buybacks remain part of the strategy alongside investment in data centers and product development. On guidance and rates, Bob said the company assumes no rate increase or cut for the rest of the year, with only minimal impact if rates move. Management also said bookings were as expected and pipeline remained very strong.