Paycom Adjusted EBITDA Margin Reaches 49% And Full-Year Outlook Rises

Paycom Software, which sells cloud-based payroll and human resources software, said third-quarter revenue rose 10% to $544 million, 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, 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, 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.

Sources

• 8-K Filing — Paycom Software, Inc. (PAYC) — SEC EDGAR
• Exhibit payc-ex99_1.htm — Paycom Software, Inc. 8-K exhibit — SEC EDGAR
• Paycom Software, Inc. Reports Third Quarter 2026 Results — businesswire.com