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# Paycom Adjusted EBITDA Margin Reaches 49% And Full-Year Outlook Rises
- URL: https://www.bullished.co/paycom-adjusted-ebitda-margin-reaches-49-and-full-year-outlook-rises-3f1feaf3/
- Published: 2026-11-04T22:54:23.000Z
- Updated: 2026-11-04T22:54:23.000Z
- Description: The HR software maker's third-quarter adjusted EBITDA hit $268.1 million, but cash fell as buybacks and borrowing climbed.
- Author: Matteo Parrino
- Tags: Earnings, PAYC, Industry: Industrials

Paycom Software, which sells cloud-based payroll and human resources software, said third-quarter revenue rose 10% to [$544 million](https://www.sec.gov/Archives/edgar/data/0001590955/000119312526447248/payc-ex99%5F1.htm?ref=bullished.co), and it raised its 2026 forecast, according to results released Wednesday. Adjusted EBITDA, its profit measure before interest, taxes, depreciation and stock pay, reached $268.1 million, or 49% of revenue.

## Margin jumps from 39% to 49%

Adjusted EBITDA was [$268.1 million](https://www.businesswire.com/news/home/20261104079558/en/Paycom-Software-Inc.-Reports-Third-Quarter-2026-Results?ref=bullished.co), against $194.3 million a year earlier. The margin was 49.3%, versus 39.4% in the third quarter of 2025.

Total revenue was [$543.8 million](https://www.businesswire.com/news/home/20261104079558/en/Paycom-Software-Inc.-Reports-Third-Quarter-2026-Results?ref=bullished.co), up 10.2% from $493.3 million. Recurring and other revenue rose 11.3% to $519.3 million, or 95.5% of the total.

GAAP net income, the standard accounting measure, was $133.2 million, or $2.99 per diluted share, versus $110.7 million, or $1.96\. Diluted shares fell to 44.5 million from 56.4 million. The year-earlier quarter included a $35.6 million gain on a naming-rights agreement and $41.3 million of other income, against $1.2 million this time. Operating income rose to $195.8 million from $112.6 million.

Total administrative expenses, which include research and development, fell to $260.8 million from $295.3 million. Research and development expense alone dropped to $38.5 million from $74.1 million, while capitalized development costs fell to $17.4 million from $43.5 million. Stock-based pay across the company fell to $20.3 million from $31.1 million.

## A higher forecast for 2026

Paycom now expects 2026 revenue of $2.213 billion to $2.218 billion, about 8% growth, with adjusted EBITDA of $1.069 billion to $1.079 billion, a 48.5% margin at the midpoint. Founder and CEO Chad Richison said the quarter reflected the "tremendous ROI clients are realizing" from the platform's automated decisioning, adding: "we are once again raising our full-year outlook."

Paycom sells payroll, talent, HR and time-and-labor software built on one database. Clients pay based on headcount and the applications they use.

## Buybacks funded by debt

For the first nine months of 2026, Paycom spent $1,390.9 million repurchasing stock, versus $218.9 million a year earlier. It drew $900.0 million on its credit facility and repaid $150.0 million. Long-term debt stood at $750.0 million at September 30, with none at the end of 2025.

Cash and equivalents fell to $193.9 million from $370.0 million at year-end. Stockholders' equity shrank to $707.3 million from $1,731.5 million. Free cash flow for the nine months rose to $536.5 million from $285.4 million.

Paycom holds its conference call on the results at 5:00 p.m. Eastern on Wednesday.

Learn

- [Item 2.02: results of operations →](https://www.bullished.co/learn/8-k-items-explained/#item-202-results-of-operations)  
From 8-K Items Explained: What Every Item Code From 1.01 To 9.01 Tells You, With Examples

### Sources

- [8-K Filing — Paycom Software, Inc. (PAYC)](https://www.sec.gov/Archives/edgar/data/0001590955/000119312526447248/payc-20261104.htm?ref=bullished.co) — SEC EDGAR
- [Exhibit payc-ex99\_1.htm — Paycom Software, Inc. 8-K exhibit](https://www.sec.gov/Archives/edgar/data/0001590955/000119312526447248/payc-ex99%5F1.htm?ref=bullished.co) — SEC EDGAR
- [Paycom Software, Inc. Reports Third Quarter 2026 Results](https://www.businesswire.com/news/home/20261104079558/en/Paycom-Software-Inc.-Reports-Third-Quarter-2026-Results?ref=bullished.co) — businesswire.com