Financial Data and Key Metrics Changes - The company reported fourth quarter revenue of approximately $371 million, up 30% year-over-year, bringing full year 2022 revenue to $1.375 billion, also up 30% year-over-year [2][28] - Fourth quarter adjusted EBITDA was $164 million, representing an adjusted EBITDA margin of 44%, with full year adjusted EBITDA at $580 million, representing an adjusted EBITDA margin of 42% [2][45] - GAAP net income for the fourth quarter was $80 million or $1.38 per diluted share, compared to $48.7 million or $0.84 per diluted share in the prior year [12][30] Business Line Data and Key Metrics Changes - The fastest-growing revenue segment came from clients with more than 2,000 employees, with revenue from this segment up 60% year-over-year [11][58] - Recurring revenue for the fourth quarter was $364 million, representing 98% of total revenues and growing 30% from the prior year [66] - Total adjusted gross profit for the fourth quarter was $312.5 million, with an adjusted gross margin of 84.3% [44] Market Data and Key Metrics Changes - The company ended 2022 with approximately 36,600 clients, representing an 8% growth compared to 2021 [66] - The total number of employee records increased by 14% year-over-year in 2022 to 6.5 million [66] Company Strategy and Development Direction - The company plans to continue investing in talent, marketing, innovation, customer service, and geographic expansion to meet strong demand [4] - The focus remains on employee experience and client ROI, with expectations for rapid profitable growth in 2023 [24][27] - The company is positioned to benefit from the trend of larger organizations simplifying their HCM needs, with only about 5% of the total addressable market currently penetrated [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the momentum heading into 2023, with guidance for total revenues in the range of $1.7 billion to $1.702 billion, representing approximately 24% year-over-year growth [47] - The company anticipates adjusted EBITDA in the range of $700 million to $702 million for 2023, with an adjusted EBITDA margin of approximately 41% [47] - Management noted that the marketing strategy has been effective, driving high-quality demo leads and improving operating leverage [40] Other Important Information - The company repurchased approximately 365,000 shares for nearly $100 million in 2022, with $1.1 billion remaining in the buyback program [46][81] - The average daily balance of funds held on behalf of clients was approximately $2.1 billion in the fourth quarter of 2022 [31] Q&A Session Summary Question: What is the outlook for end demand given market nervousness? - Management indicated that they continue to see strong demand and that renewals came in at 93% [33] Question: Did the company buy back any stock in the quarter? - Management confirmed that no stock was bought back in the quarter, but $100 million was repurchased for the full year [81] Question: How is the company addressing the growth from existing clients versus new clients? - Management stated that growth is primarily driven by new logo adds, with a healthy upsell to current clients [17][60] Question: What is the expected impact of W2 revenue in Q1? - Management expects normalization in trends for W2 revenue due to improved hiring patterns [61] Question: How does the company view the retention rate among smaller clients? - Management noted that smaller clients are experiencing more churn, but retention remains strong at 93% overall [72][90] Question: What is the company's strategy regarding upmarket opportunities? - Management indicated a strategic focus on larger clients, with continued investments to support this shift [134]

PART I – FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Unaudited consolidated financial statements show strong 9-month revenue and net income growth, with balance sheet expansion [Unaudited Consolidated Balance Sheets](index=3&type=section&id=Unaudited%20Consolidated%20Balance%20Sheets) Total assets grew to $3.31 billion, liabilities decreased, and stockholders' equity increased to $1.08 billion by September 30, 2022 Consolidated Balance Sheet Highlights (in thousands) | Account | September 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | **Total Assets** | **$3,314,570** | **$3,215,145** | | Total current assets | $2,228,362 | $2,252,038 | | **Total Liabilities** | **$2,238,190** | **$2,321,431** | | Client funds obligation | $1,754,095 | $1,846,573 | | **Total Stockholders' Equity** | **$1,076,380** | **$893,714** | [Unaudited Consolidated Statements of Comprehensive Income](index=4&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Comprehensive%20Income) Q3 and 9-month revenues grew 30.4% to $334.2 million and $1.005 billion respectively, with significant net income increases Financial Performance (in thousands, except per share amounts) | Metric | Q3 2022 | Q3 2021 | % Change | Nine Months 2022 | Nine Months 2021 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Total Revenues** | **$334,167** | **$256,194** | **30.4%** | **$1,004,610** | **$770,538** | **30.4%** | | Recurring Revenues | $328,150 | $251,306 | 30.6% | $987,848 | $756,665 | 30.6% | | **Operating Income** | **$74,265** | **$43,305** | **71.5%** | **$272,845** | **$184,941** | **47.5%** | | **Net Income** | **$52,153** | **$30,379** | **71.7%** | **$201,438** | **$147,273** | **36.8%** | | **Diluted EPS** | **$0.90** | **$0.52** | **73.1%** | **$3.46** | **$2.53** | **36.8%** | [Unaudited Consolidated Statements of Stockholders' Equity](index=5&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) Stockholders' equity increased to $1.08 billion, driven by net income, partially offset by treasury stock repurchases - Total stockholders' equity grew to **$1,076.4 million** at September 30, 2022, from **$893.7 million** at December 31, 2021[15](index=15&type=chunk) - The increase was primarily driven by **$201.4 million** in net income for the nine-month period[15](index=15&type=chunk) - The company repurchased common stock, increasing the treasury stock balance from **$(488.1) million** to **$(587.8) million** during the first nine months of 2022[15](index=15&type=chunk) [Unaudited Consolidated Statements of Cash Flows](index=6&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow increased slightly, while investing and financing activities used cash, primarily for debt and share repurchases Cash Flow Summary (in thousands) | Activity | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :--- | :--- | :--- | | Net cash provided by operating activities | $236,647 | $229,637 | | Net cash used in investing activities | $(32,028) | $(63,978) | | Net cash (used in) provided by financing activities | $(198,871) | $1,283,999 | [Notes to the Unaudited Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20the%20Unaudited%20Consolidated%20Financial%20Statements) Notes detail revenue recognition, a new $1.1 billion stock repurchase plan, debt refinancing, and an increased effective tax rate - In August 2022, the Board of Directors authorized a new stock repurchase plan for up to **$1.1 billion** of common stock, expiring August 15, 2024[30](index=30&type=chunk) - The company entered into a new credit agreement in July 2022, providing a **$650 million** revolving credit facility and a **$750 million** delayed draw term loan facility, and used it to repay and terminate a prior facility[62](index=62&type=chunk)[63](index=63&type=chunk)[68](index=68&type=chunk) - The company's effective income tax rate was **26.9%** for the nine months ended September 30, 2022, up from **20.8%** in the prior year, primarily due to a decrease in excess tax benefits from stock-based compensation[103](index=103&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=21&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes revenue growth to client expansion and higher interest, detailing increased operating expenses and strong liquidity [Results of Operations](index=24&type=section&id=Results%20of%20Operations) Q3 revenues grew 30.4% to $334.2 million, with operating income up 71.5%, driven by client growth and increased operating expenses Q3 2022 vs Q3 2021 Performance (in thousands) | Metric | Q3 2022 | Q3 2021 | % Change | | :--- | :--- | :--- | :--- | | Total Revenues | $334,167 | $256,194 | 30.4% | | Total Operating Expenses | $259,902 | $212,889 | 22.1% | | Operating Income | $74,265 | $43,305 | 71.5% | | Net Income | $52,153 | $30,379 | 71.7% | - Revenue growth was primarily the result of adding new clients, productivity gains in mature sales offices, and selling additional applications to existing clients. Higher interest rates on funds held for clients also contributed positively[127](index=127&type=chunk) - Sales and marketing expenses for the nine months of 2022 increased by **$53.3 million** YoY due to higher employee-related costs (**$41.1M**) and increased advertising spend (**$12.2M**)[132](index=132&type=chunk) [Liquidity and Capital Resources](index=26&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity is strong, supported by operating cash flow, a new credit facility, and a $1.1 billion stock repurchase authorization - Principal liquidity sources are operating cash flow, cash equivalents, and a new credit agreement from July 2022 providing a **$650M** revolving credit facility and a **$750M** delayed draw term loan facility[143](index=143&type=chunk)[150](index=150&type=chunk) - In August 2022, the Board authorized a new stock repurchase plan for up to **$1.1 billion**. As of September 30, 2022, the full **$1.1 billion** was available for repurchases[156](index=156&type=chunk) - For the nine months ended September 30, 2022, the company repurchased **364,200** shares at an average cost of **$273.67** per share[157](index=157&type=chunk) [Non-GAAP Financial Measures](index=31&type=section&id=Non-GAAP%20Financial%20Measures) Adjusted EBITDA and Non-GAAP Net Income show strong growth, reflecting core business performance for Q3 and 9-month periods Reconciliation of Net Income to Adjusted EBITDA (in thousands) | Period | Net Income | Adjusted EBITDA | % Change (YoY) | | :--- | :--- | :--- | :--- | | **Q3 2022** | **$52,153** | **$126,026** | **40.5%** | | Q3 2021 | $30,379 | $89,703 | N/A | | **Nine Months 2022** | **$201,438** | **$415,774** | **34.2%** | | Nine Months 2021 | $147,273 | $309,715 | N/A | Reconciliation of Net Income to Non-GAAP Net Income (in thousands) | Period | Net Income | Non-GAAP Net Income | % Change (YoY) | | :--- | :--- | :--- | :--- | | **Q3 2022** | **$52,153** | **$73,431** | **37.0%** | | Q3 2021 | $30,379 | $53,586 | N/A | | **Nine Months 2022** | **$201,438** | **$257,073** | **31.2%** | | Nine Months 2021 | $147,273 | $195,976 | N/A | [Quantitative and Qualitative Disclosures About Market Risk](index=33&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Primary market risk is interest rate sensitivity on cash and variable-rate debt; a 100 basis point change is not material - Primary market risk is interest rate sensitivity on cash equivalents (**$317.2M**) and variable-rate debt (**$29.0M**)[178](index=178&type=chunk)[181](index=181&type=chunk) - The company terminated its floating-to-fixed interest rate swap agreement on August 24, 2022[180](index=180&type=chunk) - A hypothetical **100** basis point change in interest rates is not expected to have a material effect on operating results or financial condition[181](index=181&type=chunk) [Controls and Procedures](index=33&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective as of September 30, 2022, with no material internal control changes - Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of September 30, 2022[182](index=182&type=chunk) - There were no material changes in the company's internal control over financial reporting during the quarter ended September 30, 2022[184](index=184&type=chunk) PART II – OTHER INFORMATION [Legal Proceedings](index=34&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in ordinary course legal proceedings not expected to materially affect financial condition or operations - The company states that pending legal matters arise in the ordinary course of business and are not expected to have a material adverse effect on its business or financials[187](index=187&type=chunk) [Risk Factors](index=34&type=page&id=Item%201A.%20Risk%20Factors) No material changes to risk factors previously disclosed in the Form 10-K filed on February 17, 2022 - There have been no material changes from the risk factors disclosed in the Form 10-K filed on February 17, 2022[188](index=188&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=34&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Details Q3 2022 common stock repurchases of 631 shares and the $1.1 billion stock repurchase plan authorization Share Repurchases (Q3 2022) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | July 1 - 31, 2022 | 30 | $330.49 | | August 1 - 31, 2022 | 193 | $367.62 | | September 1 - 30, 2022 | 408 | $351.58 | | **Total** | **631** | **N/A** | - On August 15, 2022, the Board of Directors increased the availability under the stock repurchase plan to **$1.1 billion** and extended its expiration to August 15, 2024[191](index=191&type=chunk) [Other Information](index=34&type=section&id=Item%205.%20Other%20Information) Amended bylaws adopted October 31, 2022, update procedures for stockholder meetings and director nominations, aligning with new rules - On October 31, 2022, the company's Board of Directors adopted amended and restated bylaws[191](index=191&type=chunk) - Key changes include updated procedures for stockholder meetings, director nominations, and enhanced disclosure requirements for stockholders submitting proposals, including an undertaking to comply with Rule 14a-19[191](index=191&type=chunk)[193](index=193&type=chunk) [Exhibits](index=36&type=section&id=Item%206.%20Exhibits) Lists filed exhibits, including amended bylaws, the July 2022 Credit Agreement, and CEO/CFO certifications - Lists filed exhibits, including the Amended and Restated Bylaws (Exhibit **3.2**), the July 2022 Credit Agreement (Exhibit **10.1**), and CEO/CFO certifications (Exhibits **31.1**, **31.2**, **32.1**)[194](index=194&type=chunk)

Financial Data and Key Metrics Changes - The company reported Q3 2022 revenue of approximately $334 million, representing a 30% year-over-year growth, driven by strong recurring revenue growth from new business sales [8][13] - Recurring revenue for Q3 was $328.2 million, accounting for 98% of total revenues and growing 31% year-over-year [13] - Adjusted EBITDA for Q3 was $126 million, or 37.7% of total revenues, compared to $89.7 million or 35% in the prior year, reflecting a 270 basis points year-over-year margin expansion [15] - GAAP net income for Q3 was $52.2 million, or $0.90 per diluted share, compared to $30.4 million, or $0.52 per diluted share in the prior year [16] - The company ended the quarter with cash and cash equivalents of approximately $317 million and total debt of $29 million [17] Business Line Data and Key Metrics Changes - The focus on high-quality revenue growth has resulted in strong adjusted gross profit of $280.5 million for Q3, with an adjusted gross margin of 83.9% [13] - Adjusted sales and marketing expenses were $85.8 million, or 25.7% of revenues, slightly down from 25.9% in the prior year [14] Market Data and Key Metrics Changes - The company has a total addressable market (TAM) where it currently holds only 5%, indicating significant growth potential as it competes against larger competitors [24] - The demand for self-service solutions, particularly the BETI payroll system, continues to grow, with nearly half of the clients adopting it [9][55] Company Strategy and Development Direction - The company is focused on a differentiated product strategy centered around employee experience and self-service payroll, which is expected to drive future growth [11][20] - The go-to-market strategy includes 54 outside sales teams and a strong marketing campaign to enhance brand awareness and lead generation [9][10] Management's Comments on Operating Environment and Future Outlook - Management noted that the hiring market remains tight, but there has been some softening, which has not significantly impacted the company's performance [24] - The company raised its full-year 2022 revenue guidance to a range of $1.371 billion to $1.373 billion, reflecting confidence in continued growth [18] Other Important Information - The company is experiencing strong organic lead referrals from employees, which is enhancing its market penetration [10] - The management emphasized the importance of employee self-service in payroll, which is becoming a key differentiator in the market [9][55] Q&A Session All Questions and Answers Question: Market conditions and demand - The management discussed the current hiring market, indicating a slight softening but still strong demand for their services, with significant opportunities for efficiency improvements [24] Question: Operating cash flow - Management explained that the lower operating cash flow was primarily due to timing issues and additional tax payments in Q3 [26] Question: Fourth quarter guidance - The management expressed confidence in a strong seasonal uplift for Q4, driven by new client conversions and rate increases [29] Question: Hiring and retention changes - Management reported no noticeable changes in hiring or retention at customer companies, indicating stability in their client base [32] Question: Competitive landscape - The management noted that they continue to face the same competitors as they move upmarket, with no significant changes in the competitive landscape [49] Question: Marketing effectiveness - Management highlighted the success of their brand marketing program, which has shifted focus to emphasize employee self-service payroll [51] Question: BETI adoption and performance - Management reported that about 50% of current clients are using BETI, with increasing adoption rates as clients become more familiar with the product [55] Question: Module pricing and inflation - Management confirmed that BETI pricing is nominal compared to other modules, and any future pricing adjustments would be based on the ROI delivered to clients [58] Question: New logo growth - Management indicated that new logos were the primary source of upside in their performance, reflecting the effectiveness of their differentiated strategy [85]

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q For the transition period from ______ to ______ Commission File Number: 001-36393 Paycom Software, Inc. (Exact name of registrant as specified in its charter) Delaware 80-0957485 (State or ot ...

Financial Data and Key Metrics Changes - The company reported Q2 2022 revenue of approximately $317 million, representing a 31% year-over-year increase, driven by strong recurring revenue from new business sales [9][17] - Recurring revenue for Q2 was $311.5 million, accounting for 98% of total revenues and also growing 31% year-over-year [18] - Adjusted EBITDA for Q2 was $119.6 million, or 37.7% of total revenues, compared to $87 million or 35.9% in the prior year [21] - GAAP net income for Q2 was $57.4 million, or $0.99 per diluted share, up from $52.3 million or $0.90 per diluted share in the prior year [22] - The company ended the quarter with cash and cash equivalents of approximately $279 million and total debt of $29 million [23] Business Line Data and Key Metrics Changes - The company continues to see strong demand for self-service payroll and automation solutions, particularly through its product Beti, which has been adopted by over 13,000 clients, nearly 40% of the client base [12][70] - The marketing efforts have resulted in strong demo leads and brand recognition, particularly from larger clients, contributing to higher average revenue per client [13] Market Data and Key Metrics Changes - The company estimates it has roughly half of the country covered geographically but only about 5% of a large and growing Total Addressable Market (TAM), indicating significant growth potential [14][28] - The average daily balance of funds held on behalf of clients was approximately $2 billion in Q2 2022 [23] Company Strategy and Development Direction - The company is focused on increasing employee usage of its platform, particularly through Beti, which is seen as the future of payroll [10][12] - The strategy includes aggressive marketing and sales efforts to penetrate deeper into target geographies and expand market share [14][28] - The company raised its full-year 2022 revenue guidance to a range of $1.354 billion to $1.356 billion, reflecting strong demand trends [26] Management's Comments on Operating Environment and Future Outlook - Management noted that while hiring has become somewhat easier, it remains an employee's market with many jobs unfilled [31] - The company does not anticipate significant changes in demand due to macroeconomic factors, as it has historically weathered various economic cycles [42][78] - Management expressed confidence in the company's ability to continue growing, even in the face of potential economic challenges [78] Other Important Information - The company repurchased approximately 360,000 shares for a total of roughly $100 million during Q2 2022, with a remaining buyback authorization of $550 million [25] - The company plans to continue investing aggressively in marketing and advertising through the remainder of 2022 [20] Q&A Session Summary Question: What changes are being seen in end demand or customer behavior? - Management indicated that there are no significant changes in demand, and the employment market remains competitive [31] Question: How do interest rate changes impact future numbers? - For every 25 basis points increase in the Fed funds rate, the company expects about $5 million in annualized interest income [32] Question: Are deal cycles and close rates changing? - Management reported that close rates are improving, with more interest in initial calls leading to second calls [36] Question: What is the impact of employment levels on overall growth? - Historically, normal fluctuations in unemployment have not significantly impacted the company, except during the pandemic [42] Question: How are larger clients impacting lead generation? - The average size of new clients is increasing, and many leads are coming from employees of companies that have previously used the company's services [47] Question: What is the growth composition from existing clients versus new clients? - The majority of revenue growth comes from new client wins, although there are opportunities to upsell existing clients [88]

FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______ to ______ Commission File Number: 001-36393 Paycom Software, Inc. (Registrant's telephone number, including area code) Securities registered pursuant to ...

Financial Data and Key Metrics Changes - The company reported Q1 2022 revenue of approximately $354 million, representing a 30% year-over-year growth, exceeding expectations [8][16] - Recurring revenue was $348.2 million, accounting for 98% of total revenues and also growing 30% year-over-year [17] - Adjusted EBITDA was $170.1 million, or 48.1% of total revenues, compared to $133 million or 48.9% in the prior year [19] - GAAP net income for Q1 was $91.9 million, or $1.58 per diluted share, compared to $64.6 million, or $1.11 per diluted share in the prior year [20] - The company ended the quarter with cash and cash equivalents of approximately $361 million and total debt of $29 million [21] Business Line Data and Key Metrics Changes - Employee usage of self-service solutions is increasing, with over a quarter of clients implementing Beti, the advanced payroll experience [9][10] - The marketing plan is performing well, delivering strong demo leads and brand recognition, contributing to rapid revenue growth [11] Market Data and Key Metrics Changes - The company has only captured approximately 5% of a large and growing Total Addressable Market (TAM), indicating significant growth potential [14][24] - The company expects total revenues for Q2 2022 in the range of $308 million to $310 million, representing approximately 28% growth year-over-year [23] Company Strategy and Development Direction - The company is focused on innovation and expanding its market share, with a strong emphasis on employee usage and self-service technology [9][12] - The company plans to continue investing aggressively in marketing and advertising throughout 2022 to drive growth [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the market demand for their solutions and the success in expanding market share despite macroeconomic uncertainties [24][74] - The company believes that tight labor markets drive the need for efficient technology solutions, which positions them well for continued growth [73] Other Important Information - The company has a deep pipeline of projects and continues to innovate its products to deliver more value to clients [19][64] - Management acknowledged the recent leadership transition and expressed confidence in the new leadership's ability to drive growth [88] Q&A Session Summary Question: Concerns about European market impact - Management noted that their focus is on the domestic market and that they are not significantly affected by European issues, maintaining strong growth despite macro challenges [29] Question: Momentum in different customer segments - Management highlighted success in penetrating the market above the 1,000 employee mark, driven by the deployment of self-service technology [30] Question: Impact of higher interest rates - Management indicated that recent interest rate increases would take time to impact their financials, but they are monitoring the situation closely [31] Question: New office staffing and guidance - All new offices are open and producing revenue, although full maturity takes about two years [33] Question: Competitive landscape and retention rates - Management stated that they are not seeing significant changes in competitor retention rates and remain focused on capturing market share [81] Question: Product innovation and future plans - Management confirmed ongoing product development and enhancements, with a focus on increasing client engagement and satisfaction [64][86] Question: Client employment base stability - Management noted that client employment levels have remained stable, which is crucial for their business growth [67] Question: Salesforce growth and retention - Management reported improved sales retention rates, attributed to better performance and quicker advancement of sales reps [68] Question: Competitive environment and innovation - Management emphasized their leadership in innovation and the importance of continuing to meet employee expectations for technology [102]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting ...

Financial Data and Key Metrics Changes - Paycom reported Q4 2021 revenue of $285 million, a 29% increase year-over-year, and full-year revenue of $1.56 billion, growing 25% compared to 2020 [12][23]. - The annual revenue retention rate increased to 94%, reflecting strong ROI for clients [12][34]. - Adjusted EBITDA for Q4 2021 was $109.6 million, representing a margin of 38.4%, while full-year adjusted EBITDA was $419.3 million, with a margin of 39.7% [30][34]. - GAAP net income for Q4 was $48.7 million, or $0.84 per diluted share, compared to $24.4 million, or $0.42 per diluted share in the prior year [31][34]. - Cash from operations increased by 40.6% to $319 million in 2021 [35]. Business Line Data and Key Metrics Changes - Recurring revenue for Q4 2021 was $280 million, accounting for 98% of total revenues, and grew 29% year-over-year [24]. - Adjusted gross profit for Q4 was $239.7 million, with an adjusted gross margin of 84.1% [26]. - Adjusted sales and marketing expenses for Q4 were $72.3 million, indicating effective marketing strategies driving high-quality leads [27]. Market Data and Key Metrics Changes - Paycom ended 2021 with nearly 34,000 clients, a 9% growth compared to 2020 [25]. - The company expanded its target client size range from 5,000 to 10,000 employees, indicating a focus on larger clients [16]. Company Strategy and Development Direction - Paycom is focused on automating HR processes and enhancing employee self-service capabilities, positioning itself as a leader in the transformation of HR and payroll systems [11][15]. - The company plans to continue investing in talent, marketing, innovation, and geographic expansion to meet increasing demand [39]. - Paycom aims to capture more market share, currently holding only about 5% of the total addressable market (TAM) [17]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in strong demand and sales momentum, with expectations for continued growth in 2022 [21][39]. - The company noted that the pandemic's impact on employment levels has stabilized, allowing for a more predictable business environment moving forward [84]. - Management highlighted the importance of employee usage of products as a key driver for client retention and satisfaction [45]. Other Important Information - Paycom received several awards in 2021, including recognition for its innovative product Beti and being named a top workplace [18]. - The company opened five new sales offices in the last five months, indicating a commitment to expanding its sales force [16][28]. Q&A Session Summary Question: What are the drivers behind the 94% retention rate? - Management indicated that the increase in retention rates is driven by higher employee usage of products, leading to greater ROI for clients [42][45]. Question: How should investors think about customer additions in light of past growth? - Management noted that while customer additions moderated compared to the previous year, they are focusing on larger clients, which has resulted in higher average revenue per client [53][54]. Question: Can you provide insights on sales team productivity? - Management reported that sales productivity has improved significantly compared to pre-pandemic levels, attributing this to better strategies and connections with prospects [101]. Question: How is the competitive landscape evolving? - Management acknowledged that while there is increased competition, particularly from companies like UKG, Paycom is well-positioned to capture market share due to its innovative solutions and strong client satisfaction [112][114].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______ to ______ Commission File Number: 001-36393 Paycom Software, Inc. (Exact name of registrant as specified in its charter) (State or other jurisdictio ...