Paycom Software Q4 Earnings and Revenues Top Estimates, Rise Y/Y

Core Insights - Paycom Software, Inc. reported better-than-expected fourth-quarter 2024 results with non-GAAP earnings of $2.32 per share, surpassing the Zacks Consensus Estimate of $1.99 and reflecting a year-over-year increase of 20.2% driven by higher revenues, operating efficiency, and lower share counts [1][4] Financial Performance - The company reported revenues of $493.8 million for Q4 2024, exceeding the consensus mark of $481.1 million and showing a year-over-year growth of 13.6%, benefiting from increased sales momentum, international expansion, and AI integration [2][3] - Recurring revenues, which account for 94% of total revenues, improved by 14.5% to $464.8 million, while revenues from the Implementation and Other segment increased to $29 million from $28.5 million in the previous year [3] - Adjusted gross profits rose 14% year over year to $412.6 million, with an adjusted gross margin expanding by 30 basis points to 83.6% [4] - Adjusted EBITDA increased by 21.7% year over year to $214.9 million, with the adjusted EBITDA margin improving from 40.6% to 43.5% [4] Full-Year Performance - For the full year 2024, Paycom's revenues increased by 11.2% to $1.88 billion, surpassing the Zacks Consensus Estimate of $1.87 billion [5] - Recurring revenues rose by 10.9% to $1.76 billion, while revenues from interest on funds held for clients increased by 15.6% to $124.9 million [5][6] - The adjusted EPS for 2024 increased by 5.9% to $8.21, exceeding the consensus mark of $7.87 [6] Balance Sheet and Cash Flow - As of December 31, 2024, Paycom had cash and cash equivalents of $402 million, up from $325.8 million in the previous quarter, and had no debt after paying off all long-term debt at the end of 2023 [7] - The company generated an operating cash flow of approximately $533.9 million in 2024, paid out $84.8 million in dividends, and repurchased $145 million worth of its common stock [7][8] 2025 Guidance - For 2025, Paycom forecasts revenues between $2.015 billion and $2.035 billion, with recurring revenues expected to grow by 9% year over year [9] - The company projects to generate $110 million from interest on funds held for clients in 2025 and expects adjusted EBITDA to be between $820 million and $840 million, translating to an EBITDA margin of approximately 41% at the mid-point [10]