Paycom Software Outperforms Market by 6.93% Over 10 Years, $100 Investment Worth $591.31 Today.

Paycom Software (PAYC) has outperformed the market over the past 10 years with a 6.93% annualized return, making it worth $591.31 for a $100 investment in 2013. The company's market capitalization is now $12.76 billion. The key takeaway from this article is the power of compounded returns over time.

Paycom Software, Inc. (NYSE: PAYC) has continued to demonstrate robust performance, with its stock outperforming the market over the past decade. An investment of $100 in 2013 would now be worth $591.31, reflecting a 6.93% annualized return. The company's market capitalization stands at $12.76 billion, underscoring its significant growth and potential.

The latest financial results for Paycom Software have been particularly encouraging. The company reported strong revenue growth in the second quarter of 2025, with sales increasing by 10.5% year-over-year (y/y) to $483.6 million. This growth was driven primarily by the core recurring revenue segment, which expanded by 12.2% y/y to $455.1 million. Adjusted EBITDA margin also improved by 450 basis points (bps) y/y to 41%, reflecting the company's ability to expand margins while accelerating revenue growth [1].

Paycom Software's success can be attributed to several strategic initiatives. The company's revamped go-to-market (GTM) strategy has been particularly effective, with the outside sales team delivering record sales in both the first and second quarters of 2025. This strategy has not only driven immediate growth but also sets the stage for future expansion, as the record sales will translate into revenue recognition in the second half of 2025 [1].

The company's product innovation, specifically the launch of the IWant AI tool, is another key driver of growth. IWant is designed to redefine user interaction with enterprise software by enabling users to access information and execute tasks instantly through simple voice or text commands. This innovation addresses one of the biggest frictions for users— the steep learning curve—improving overall productivity and satisfaction [1].

Paycom Software's ability to expand margins is further underscored by its structural cost reductions. The company is applying full-suite automation to internal processes, reducing the need for hiring and backfilling roles. This strategy lowers operating costs while maintaining productivity, leading to higher operating leverage and improved profitability [1].

Investors should also note that Paycom Software's valuation remains attractive relative to its growth potential. The company's forward EBITDA multiple was 16.5x as of the last valuation, and with the current performance, it is expected to trade back to this level. Given the company's strong growth prospects and margin expansion, there is scope for multiple expansion if Paycom Software continues to execute well [1].

References:
[1] https://seekingalpha.com/article/4815629-paycom-software-expecting-continued-growth-acceleration-ahead