NYSE$PAYC

Paycom Software Inc · Q1 2022 earnings

Q1 2022 earnings · · Investor relations

Briefing

Reported first quarter results with revenue up 30% and adjusted EBITDA representing 48% of total revenues.

Paycom Software, Inc. announced its financial results for the quarter ended March 31, 2022, with total revenues of $353.5 million, a 29.9% increase compared to the same period last year. GAAP Net Income was $91.9 million, or $1.58 per diluted share, while Non-GAAP Net Income was $110.6 million, or $1.90 per diluted share. Adjusted EBITDA was $170.1 million.

  • Total revenues increased by 29.9% year-over-year to $353.5 million.
  • Recurring revenues grew by 30.0% year-over-year, comprising 98.5% of total revenues.
  • GAAP Net Income was $91.9 million, or $1.58 per diluted share.
  • Adjusted EBITDA reached $170.1 million, representing 48% of total revenues.

Headline financials

Total Revenue

$354M

Previous: $272M+29.9%
EPS (adj)

$1.90

Previous: $1.47+29.3%
Adjusted EBITDA

$170M

Previous: $133M+27.9%
Adjusted EBITDA Margin

48.1%

Previous: 48.9%-1.6%
Capital Expenditures

-$34.5M

Previous: -$25.3M-36.1%
Free Cash Flow

$57.5M

Previous: $39.3M+46.3%
Net Income

$91.9M

Previous: $64.6M+42.3%
Operating Income

$126M

Previous: $94.5M+33.6%
Gross Profit

$305M

Previous: $236M+29.3%
Cash & Equivalents

$361M

Previous: $215M+67.6%
Total Assets

$5.44B

Previous: $3.41B+59.8%
Stock-Based Comp

$22.1M

Previous: $23.6M-6.5%

Revenue & EPS history

Paycom · Revenue · Quarterly

$354M

Q1 2022+29.9%vs Q1 2021
Beat estimate in 15 of 16 quarters(94%)
ActualEstimate

Revenue by segment

Paycom · $348M total across 1 segment · Q1 2022

  • Recurring and other
    $348M+30.0%

Forward guidance

Paycom provides the following expected financial guidance for the quarter ending June 30, 2022 and the year ending December 31, 2022:

Tailwinds

  • Total Revenues in the range of $308 million to $310 million for the quarter ending June 30, 2022.
  • Adjusted EBITDA in the range of $111 million to $113 million for the quarter ending June 30, 2022.
  • Total Revenues in the range of $1.333 billion to $1.335 billion for the year ending December 31, 2022.
  • Adjusted EBITDA in the range of $533 million to $535 million for the year ending December 31, 2022.
  • The company expects revenue growth rate plus adjusted EBITDA margin, or the “Rule of 65”.

Headwinds

  • Forward-looking adjusted EBITDA ranges, margins, and non-GAAP effective income tax rate have not been reconciled to net income due to uncertainty regarding depreciation and amortization, interest expense, taxes, non-cash stock-based compensation expense, and change in fair value of interest rate swap.
  • Forward-looking adjusted gross margin range has not been reconciled to GAAP gross margin due to uncertainty regarding cost of revenues, including non-cash stock-based compensation expense.
  • Reconciliations of the forward-looking adjusted EBITDA ranges to net income, the forward-looking adjusted EBITDA margins to net income margin, the forward-looking adjusted gross margin range to gross margin and the forward-looking non-GAAP effective income tax rate to the GAAP effective income tax rate are not available at this time without unreasonable effort.
  • The company is unable to reconcile forward-looking adjusted EBITDA margin to net income margin without unreasonable effort.
  • The company is unable to reconcile the “Rule of 65” to a comparable GAAP measure without unreasonable effort.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q1 2022

Historical avgQ1 2022

+1.4%

Avg return

Earnings day

+0.3%

Avg return

5 days after

+2.9%

Avg return

30 days after

60%

32 / 53 earnings

Positive

+22.1%

Q2 2018

Best reaction

-37.2%

Q3 2023

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026+10.0%+7.6%+8.9%
Q4 2025+1.8%+3.0%+5.9%
Q3 2025-10.9%-7.3%-9.8%
Q1 2025+9.1%+13.8%+16.2%
Q4 2024+2.4%+3.1%+0.5%
Q3 2024+1.2%+10.6%+11.0%
Q2 2024+1.2%-4.5%-1.6%
Q1 2024-11.3%-7.2%-22.7%
Q4 2023-1.0%-3.0%-8.3%
Q3 2023-37.2%-33.8%-24.3%
Q2 2023-18.7%-21.2%-20.0%
Q1 2023-1.3%-8.4%-5.5%
Q4 2022-2.6%-3.8%-13.3%
Q3 2022-8.5%-11.5%+0.1%
Q2 2022+6.1%+11.4%+4.4%
Q1 2022+12.1%+0.9%+3.5%
Q4 2021+11.1%+6.4%-5.8%
Q3 2021-6.3%-7.7%-19.7%
Q2 2021+10.7%+16.6%+25.2%
Q1 2021-10.0%-13.5%-15.7%
Q4 2020-5.9%-4.6%-11.3%
Q3 2020+1.1%+9.7%+18.4%
Q2 2020+4.8%+3.0%-1.4%
Q1 2020+19.4%+6.9%+27.0%
Q4 2019-13.9%-11.8%-20.7%
Q3 2019+1.9%+2.5%+33.8%
Q2 2019+4.9%+3.0%+10.7%
Q1 2019+1.7%+4.5%+5.6%
Q4 2018+8.5%+12.8%+13.0%
Q3 2018+1.1%+1.0%+6.1%
Q2 2018+22.1%+28.8%+48.2%
Q1 2018-8.6%-6.1%-7.7%
Q4 2017+0.5%-0.9%+30.1%
Q3 2017-3.5%+0.2%+2.3%
Q2 2017-2.8%-0.9%+6.4%
Q1 2017+4.2%+6.5%+10.5%
Q4 2016+13.0%+14.2%+23.7%
Q3 2016-15.5%-16.9%-17.6%
Q2 2016+6.6%+7.7%+7.4%
Q1 2016+2.8%
Q4 2015-2.7%
Q3 2015+17.3%
Q2 2015+20.4%
Q1 2015+12.8%
Q4 2012-3.2%
Q4 2014+5.7%
Q3 2013+2.2%
Q3 2014+19.6%
Q2 2013+0.7%
Q2 2014+9.0%
Q1 2013-3.2%
Q4 2013-3.2%
Q1 2014-1.8%
Q3 2012

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