Paycom Software 2025 Q1 Earnings Profit Declines 43.6%
Generado por agente de IAAinvest Earnings Report Digest
jueves, 8 de mayo de 2025, 1:43 am ET2 min de lectura
PAYC--
Paycom Software (PAYC) reported its fiscal 2025 Q1 earnings on May 07th, 2025. The company posted mixed results as it beat revenue estimates but saw a significant decline in net income. Guidance for 2025 was raised, signaling optimism for future growth.
Revenue
Paycom Software experienced a 6.1% increase in total revenue for 2025 Q1, reaching $530.50 million compared to $499.90 million in 2024 Q1. The recurring and other revenue segment contributed $500 million, while interest on funds held for clients added $30.50 million, culminating in the total revenue figure of $530.50 million.
Earnings/Net Income
Paycom Software's EPS fell 43.0% to $2.49 in 2025 Q1 from $4.37 in 2024 Q1. The net income also declined 43.6% to $139.40 million from $247.20 million in the previous year. The significant drop in EPS indicates a challenging financial period for the company.
Price Action
Post-Earnings Price Action Review
Over the past five years, purchasing Paycom SoftwarePAYC-- shares following a quarter of revenue growth and holding them for 30 days has yielded moderate returns, albeit with notable volatility and risk. This strategy has resulted in a compound annual growth rate (CAGR) of 2.74%, with a maximum drawdown of -12.79%. The Sharpe ratio, a measure of risk-adjusted returns, stood at 0.30. While there has been some growth, the strategy has been characterized by substantial volatility and limited risk-adjusted returns when compared to the benchmark. As such, while the approach has had its merits, the associated risks and volatility warrant careful consideration.
CEO Commentary
"We delivered strong results in the first quarter, led by our differentiated approach to automation, strong sales execution and operational efficiency gains," said Chad Richison, CEO and Chairman of Paycom Software, Inc. He highlighted the positive impact of investments in automation and client ROI achievement, stating that these efforts are yielding benefits. Richison expressed optimism about the company's accelerating momentum and expanding margins, which has led to an increase in the company's outlook for 2025.
Guidance
Paycom Software expects total revenue for 2025 to range between $2.023 billion and $2.038 billion, reflecting an approximate 8% year-over-year growth at the midpoint. The company anticipates recurring and other revenue growth of about 9% year-over-year and expects interest on funds held for clients to be around $110 million. Additionally, adjusted EBITDA is projected to be between $843.0 million and $858.0 million, representing an adjusted EBITDA margin of approximately 42% at the midpoint.
Additional News
In recent non-earnings related news, Paycom Software announced a quarterly cash dividend of $0.375 per share of common stock. This dividend will be payable on June 9, 2025, to stockholders of record as of May 27, 2025. This decision underscores the company's commitment to returning value to shareholders. Additionally, Paycom Software has maintained a strong financial position, with no total debt reported. The company has been recognized globally for its technology and workplace culture, which further supports its reputation in the industry. As of 2023, Paycom services approximately 19,500 clients, reflecting its significant market presence.
Revenue
Paycom Software experienced a 6.1% increase in total revenue for 2025 Q1, reaching $530.50 million compared to $499.90 million in 2024 Q1. The recurring and other revenue segment contributed $500 million, while interest on funds held for clients added $30.50 million, culminating in the total revenue figure of $530.50 million.
Earnings/Net Income
Paycom Software's EPS fell 43.0% to $2.49 in 2025 Q1 from $4.37 in 2024 Q1. The net income also declined 43.6% to $139.40 million from $247.20 million in the previous year. The significant drop in EPS indicates a challenging financial period for the company.
Price Action
Post-Earnings Price Action Review
Over the past five years, purchasing Paycom SoftwarePAYC-- shares following a quarter of revenue growth and holding them for 30 days has yielded moderate returns, albeit with notable volatility and risk. This strategy has resulted in a compound annual growth rate (CAGR) of 2.74%, with a maximum drawdown of -12.79%. The Sharpe ratio, a measure of risk-adjusted returns, stood at 0.30. While there has been some growth, the strategy has been characterized by substantial volatility and limited risk-adjusted returns when compared to the benchmark. As such, while the approach has had its merits, the associated risks and volatility warrant careful consideration.
CEO Commentary
"We delivered strong results in the first quarter, led by our differentiated approach to automation, strong sales execution and operational efficiency gains," said Chad Richison, CEO and Chairman of Paycom Software, Inc. He highlighted the positive impact of investments in automation and client ROI achievement, stating that these efforts are yielding benefits. Richison expressed optimism about the company's accelerating momentum and expanding margins, which has led to an increase in the company's outlook for 2025.
Guidance
Paycom Software expects total revenue for 2025 to range between $2.023 billion and $2.038 billion, reflecting an approximate 8% year-over-year growth at the midpoint. The company anticipates recurring and other revenue growth of about 9% year-over-year and expects interest on funds held for clients to be around $110 million. Additionally, adjusted EBITDA is projected to be between $843.0 million and $858.0 million, representing an adjusted EBITDA margin of approximately 42% at the midpoint.
Additional News
In recent non-earnings related news, Paycom Software announced a quarterly cash dividend of $0.375 per share of common stock. This dividend will be payable on June 9, 2025, to stockholders of record as of May 27, 2025. This decision underscores the company's commitment to returning value to shareholders. Additionally, Paycom Software has maintained a strong financial position, with no total debt reported. The company has been recognized globally for its technology and workplace culture, which further supports its reputation in the industry. As of 2023, Paycom services approximately 19,500 clients, reflecting its significant market presence.
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