Paycom Software 2025 Q2 Earnings Strong Performance as Net Income Surges 31.6%

Paycom Software (PAYC) reported its fiscal 2025 Q2 earnings on Aug 7, 2025, delivering robust results across the board. The company exceeded expectations with a 10.5% year-over-year revenue increase and a 31.6% jump in net income. The results underscore continued strong demand for Paycom’s cloud-based HCM solutions and the benefits of strategic AI-driven automation.

Paycom Software reported total revenue of $483.60 million for Q2 2025, a 10.5% increase from $437.50 million in the same quarter last year, driven by strong growth across key segments. Recurring revenue, the company’s core offering, reached $449.10 million, while the broader Recurring and other segment totaled $455.10 million. Additional revenue sources included $28.50 million from interest on funds held for clients and $6 million from implementation and other services, together forming the total revenue figure of $483.60 million.

Earnings per share (EPS) for Paycom Software surged to $1.59 in Q2 2025, a 32.5% increase from $1.20 in Q2 2024. Net income also rose significantly to $89.50 million, up 31.6% from $68 million in the prior-year period. The company has maintained profitability for 13 consecutive years, a testament to its consistent performance and efficient operations.

The stock price of Paycom Software moved modestly in the short term, with a 2.27% decline during the latest trading day, a 0.79% increase over the past week, and a 0.25% decline month-to-date. These movements reflect typical post-earnings volatility.

Following the earnings release, the performance of a strategy involving buying PAYC when it beats revenue expectations and holding for 30 days yielded poor results. The strategy posted a negative compound annual growth rate (CAGR) of -8.78% and an excess return of -122.80%, far below the benchmark return of 86.19%. The strategy’s Sharpe ratio of -0.21 and maximum drawdown of 0.00% highlighted its underperformance and high risk.

Chad Richison, CEO and Chairman of Paycom Software, emphasized the company’s strong Q2 performance, particularly the 10.5% year-over-year revenue growth and robust new customer additions. He also highlighted the launch of IWant, the industry’s first command-driven AI engine, as a key innovation that enhances automation and positions Paycom for continued leadership in the HCM space.

For the full year 2025, Paycom Software provided revenue guidance of $2.045 billion to $2.055 billion, representing approximately 9% year-over-year growth at the midpoint. Recurring and other revenue is expected to grow around 10%, and Adjusted EBITDA is projected between $872.0 million and $882.0 million, reflecting a margin of approximately 43%. Interest on funds held for clients is expected to reach approximately $113.0 million in 2025.

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