Paycom Raises 2026 Outlook After Profit Margin Expansion

The Tip Desk · November 10, 2026 · 2 min read

Third-quarter revenue reached $543.8 million as adjusted EBITDA margin hit 49.3% and the company lifted full-year revenue to about 8% growth.

Paycom Software, Inc. (PAYC), a cloud-based human capital management software provider, reported third-quarter total revenues of $543.8 million, up 10.2% from $493.3 million a year earlier, and raised its full-year 2026 outlook for a second consecutive quarter.

Year-over-year revenue growth accelerated from 9.8% in the second quarter and 7.8% in the first. Recurring and other revenues were $519.3 million, up 11.3%, and constituted 95.5% of the total. Interest on funds held for clients was $24.5 million.

GAAP net income was $133.2 million, or $2.99 a share, compared with $110.7 million, or $1.96 a share, a year earlier. Net income margin was 24.5%. Non-GAAP net income was $150.0 million, or $3.37 a share. Adjusted EBITDA was $268.1 million, a 49.3% margin, versus $194.3 million, or a 39.4% margin, a year earlier. Operating income was $195.8 million.

Gross margin was 84.0% and adjusted gross margin was 84.4%. Sales and marketing expenses were $108.0 million, or 19.9% of revenues. Research and development expenses were $38.5 million, or 7.1% of revenues; total research and development costs were $55.9 million, or 10.3% of revenues. General and administrative expenses were $88.2 million. Total administrative expenses were $260.8 million, or 48.0% of revenues.

Interest expense was $11.7 million, versus $1.1 million a year earlier. Long-term debt of $750.0 million appeared on the September 30, 2026 balance sheet, versus none at December 31, 2025. Cash and cash equivalents were $193.9 million at quarter-end, versus $370.0 million at year-end 2025. Funds held for clients were $3,891.3 million. During the quarter, Paycom paid $16.7 million in cash dividends.

Founder and CEO Chad Richison said the results reflected return on investment from automated decisioning logic in the platform and that the company was “once again raising our full-year outlook.”

Paycom now expects full-year 2026 total revenue of $2.213 billion to $2.218 billion, representing about 8% year-over-year growth, up from a prior range of $2.197 billion to $2.212 billion, or 7% to 8%. Recurring and other revenue growth is now expected at approximately 9%, from a prior 8% to 9%. Adjusted EBITDA is now expected at $1.069 billion to $1.079 billion, a 48.5% margin at the midpoint, up from $1.007 billion to $1.022 billion, or about 46% at the midpoint. Interest on funds held for clients is expected at approximately $107.0 million.

The company said it has not reconciled the forward-looking adjusted EBITDA ranges to net income because applicable information for future periods is not readily available.