Revenue growth has slowed to 7.8% as of 2026Q1, though the company maintains a resilient 80.1% gross margin through its proprietary single-database architecture.
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 | Dec'16 | Dec'15 | Dec'14 | Dec'13 | Dec'12 |
|---|
| Sales/Revenue | 2.09B | 2.05B | 1.88B | 1.69B | 1.38B | 1.06B | 841.43M | 737.67M | 566.34M | 433.05M | 329.14M | 224.65M | 150.93M | 107.6M | 76.81M |
| Revenue Growth % | 9.37% | 8.95% | 11.19% | 23.16% | 30.29% | 25.44% | 14.07% | 30.25% | 30.78% | 31.57% | 46.51% | 48.85% | 40.27% | 40.09% | - |
| Cost of Goods Sold | 424.1M | 439.3M | 334.6M | 276.3M | 212.7M | 161.89M | 123.55M | 109.75M | 90.76M | 72.03M | 54.07M | 35.47M | 27.32M | 20.89M | 16.33M |
| COGS % of Revenue | - | 21.41% | 17.77% | 16.31% | 15.47% | 15.34% | 14.68% | 14.88% | 16.03% | 16.63% | 16.43% | 15.79% | 18.1% | 19.42% | 21.25% |
| Gross Profit | 1.67B | 1.61B | 1.55B | 1.42B | 1.16B | 893.64M | 717.89M | 627.92M | 475.57M | 361.02M | 275.07M | 189.18M | 123.61M | 86.71M | 60.48M |
| Gross Margin % | 79.74% | 78.59% | 82.23% | 83.69% | 84.53% | 84.66% | 85.32% | 85.12% | 83.97% | 83.37% | 83.57% | 84.21% | 81.9% | 80.58% | 78.75% |
| Gross Profit Growth % | - | 4.12% | 9.26% | 21.93% | 30.09% | 24.48% | 14.33% | 32.04% | 31.73% | 31.24% | 45.4% | 53.04% | 42.56% | 43.36% | - |
| Operating Expenses | 1.08B | 1.05B | 914.3M | 966.1M | 783.8M | 640.07M | 531.76M | 401.7M | 301.86M | 231.31M | 173.34M | 154.75M | 107.91M | 77.24M | 54.35M |
| OpEx % of Revenue | - | 50.94% | 48.55% | 57.04% | 57% | 60.64% | 63.2% | 54.46% | 53.3% | 53.41% | 52.66% | 68.88% | 71.5% | 71.78% | 70.76% |
| Selling, General & Admin | 771.8M | 761.8M | 593M | 705.7M | 585.7M | 485.83M | 413.92M | 306.82M | 240.49M | 191.07M | 144.53M | 140.38M | 99.05M | 71.41M | 48.63M |
| SG&A % of Revenue | - | 37.13% | 31.49% | 41.67% | 42.59% | 46.03% | 49.19% | 41.59% | 42.46% | 44.12% | 43.91% | 62.49% | 65.63% | 66.37% | 63.31% |
| Research & Development | 281.8M | 283.4M | 242.6M | 199M | 148.3M | 118.43M | 90.24M | 73.08M | 46.25M | 30.43M | 20.97M | 8.63M | 4.33M | 2.15M | 1.63M |
| R&D % of Revenue | - | 13.81% | 12.88% | 11.75% | 10.78% | 11.22% | 10.72% | 9.91% | 8.17% | 7.03% | 6.37% | 3.84% | 2.87% | 1.99% | 2.12% |
| Other Operating Expenses | 1.3M | 0 | 78.7M | 61.4M | 49.8M | 35.81M | 27.61M | 21.8M | 15.13M | 9.8M | 7.83M | 5.74M | 4.54M | 3.68M | 4.09M |
| Operating Income | 592.4M | 567.2M | 634.3M | 451.3M | 378.7M | 253.57M | 186.12M | 226.22M | 173.72M | 129.71M | 101.74M | 34.44M | 15.7M | 9.47M | 6.13M |
| Operating Margin % | 28.3% | 27.65% | 33.68% | 26.65% | 27.54% | 24.02% | 22.12% | 30.67% | 30.67% | 29.95% | 30.91% | 15.33% | 10.4% | 8.8% | 7.98% |
| Operating Income Growth % | - | -10.58% | 40.55% | 19.17% | 49.35% | 36.24% | -17.73% | 30.23% | 33.93% | 27.49% | 195.46% | 119.33% | 65.75% | 54.44% | - |
| EBITDA | 779.8M | 743.5M | 780.2M | 565.2M | 471.4M | 320.79M | 239.5M | 268.44M | 203.37M | 149.1M | 115.37M | 43.86M | 22.86M | 14.96M | 11.65M |
| EBITDA Margin % | 37.26% | 36.24% | 41.43% | 33.37% | 34.28% | 30.39% | 28.46% | 36.39% | 35.91% | 34.43% | 35.05% | 19.52% | 15.15% | 13.9% | 15.17% |
| EBITDA Growth % | 13.52% | -4.7% | 38.04% | 19.9% | 46.95% | 33.94% | -10.78% | 31.99% | 36.4% | 29.24% | 163.07% | 91.83% | 52.84% | 28.34% | - |
| D&A (Non-Cash Add-back) | 187.4M | 176.3M | 145.9M | 113.9M | 92.7M | 67.22M | 53.37M | 42.21M | 29.66M | 19.39M | 13.63M | 9.42M | 7.16M | 5.49M | 5.52M |
| EBIT | 642.2M | 622.8M | 652.4M | 474.3M | 392.1M | 255.96M | 185.96M | 227.03M | 175.48M | 128.64M | 102.05M | 34.95M | 13.08M | 10.67M | 6.49M |
| Net Interest Income | -6.7M | -3.4M | -3.4M | -1.9M | -2.5M | 0 | -19K | -940K | -766K | -911K | -1.04M | -1.43M | -3.42M | -9.27M | -6.98M |
| Interest Income | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Interest Expense | 6.7M | 3.4M | 3.4M | 1.9M | 2.5M | 0 | 19K | 940K | 766K | 911K | 1.04M | 1.43M | 3.42M | 9.27M | 6.98M |
| Other Income/Expense | 52.1M | 52.2M | 14.7M | 21.1M | 10.9M | 2.4M | -187K | -137K | 996K | -1.98M | -728K | -910K | -6.04M | -8.07M | -6.62M |
| Pretax Income | 644.5M | 619.4M | 649M | 472.4M | 389.6M | 255.96M | 185.94M | 226.09M | 174.71M | 127.73M | 101.01M | 33.52M | 9.66M | 1.4M | -490K |
| Pretax Margin % | 30.79% | 30.19% | 34.46% | 27.89% | 28.33% | 24.25% | 22.1% | 30.65% | 30.85% | 29.5% | 30.69% | 14.92% | 6.4% | 1.3% | -0.64% |
| Income Tax | 174.7M | 166M | 147M | 131.61M | 108.19M | 60M | 42.48M | 45.51M | 37.65M | 9.84M | 13.4M | 12.58M | 3.99M | 4M | -84K |
| Effective Tax Rate % | 27.11% | 26.8% | 22.65% | 27.86% | 27.77% | 23.44% | 22.85% | 20.13% | 21.55% | 7.7% | 13.27% | 37.52% | 41.35% | 286.2% | 17.14% |
| Net Income | 469.7M | 453.4M | 502M | 340.79M | 281.39M | 195.96M | 143.45M | 180.58M | 137.06M | 66.81M | 43.84M | 20.95M | 5.66M | 7.71M | -406K |
| Net Margin % | 22.44% | 22.1% | 26.66% | 20.12% | 20.46% | 18.57% | 17.05% | 24.48% | 24.2% | 15.43% | 13.32% | 9.32% | 3.75% | 7.17% | -0.53% |
| Net Income Growth % | 19.14% | -9.68% | 47.31% | 21.11% | 43.6% | 36.6% | -20.56% | 31.74% | 105.17% | 52.39% | 109.31% | 269.86% | -26.56% | 1999.26% | - |
| Net Income (Continuing) | 469.7M | 453.4M | 502M | 340.79M | 281.39M | 195.96M | 143.45M | 180.58M | 137.06M | 123.49M | 70.42M | 20.95M | 5.66M | 7.71M | -406K |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -7.1M | 0 |
| Minority Interest | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -3K | 0 |
| EPS (Diluted) | 9.17 | 8.08 | 8.92 | 5.88 | 4.84 | 3.37 | 2.46 | 3.09 | 2.34 | 1.13 | 0.74 | 0.36 | 0.11 | 0.01 | -0.01 |
| EPS Growth % | 23.4% | -9.42% | 51.7% | 21.49% | 43.62% | 36.99% | -20.39% | 32.05% | 107.08% | 52.7% | 105.56% | 227.27% | 787.1% | - | - |
| EPS (Basic) | - | 8.13 | 8.93 | 5.91 | 4.86 | 3.39 | 2.49 | 3.14 | 2.38 | 1.15 | 0.76 | 0.37 | 0.11 | 0.01 | -0.01 |
| Diluted Shares Outstanding | 51.2M | 56.1M | 56.3M | 57.97M | 58.17M | 58.19M | 58.28M | 58.4M | 58.58M | 58.79M | 58.97M | 57.92M | 51.86M | 48.37M | 48.37M |
| Basic Shares Outstanding | 51.1M | 55.8M | 56.2M | 57.71M | 57.93M | 57.88M | 57.62M | 57.56M | 57.71M | 57.84M | 57.55M | 56.5M | 49.78M | 47.69M | 47.69M |
| Dividend Payout Ratio | - | 18.7% | 16.89% | 19.03% | - | - | - | - | - | - | - | - | - | 70.15% | - |
Organic growth saturation risks
As reported in recent financial filings, Paycom's revenue growth has decelerated to 7.8% in 2026Q1, down from the double-digit expansion observed in previous periods, suggesting that the company's core mid-market penetration strategy may be encountering significant saturation challenges that warrant close investor scrutiny moving forward.
The transition toward the Beti automated payroll platform appears to be creating a structural shift in revenue composition, potentially masking underlying client acquisition trends. Investors should monitor whether this deceleration reflects a permanent change in the total addressable market or a temporary friction point during the product adoption cycle.
Based on the provided income statement data, Paycom maintains a robust gross margin profile of 80.1% as of 2026Q1, demonstrating that the company's proprietary single-database architecture continues to provide significant pricing power and operational efficiency despite the ongoing strategic pivot toward automated payroll solutions.
The ability to sustain margins above 80% suggests that the core software-as-a-service model remains highly scalable with minimal incremental costs. However, the volatility in quarterly gross margins indicates that the company's service-revenue mix remains sensitive to the adoption rate of automated features versus traditional manual support.
According to the latest quarterly results, Paycom's operating margin of 36.8% in 2026Q1 reflects a recovery from mid-2025 lows, yet the inconsistent scaling of operating income relative to gross profit suggests that SG&A expenses remain a significant variable that management must actively manage to drive profitability.
The fluctuation in operating margins appears tied to the aggressive sales force expansion and the costs associated with supporting new product rollouts. Analysts should investigate whether the current level of SG&A spending is a necessary investment for future growth or an indication of diminishing returns on marketing expenditures.
Analysis of the income statement reveals that Paycom's net income is periodically influenced by stock-based compensation, which reached $38.4 million in 2025Q2, highlighting a potential divergence between GAAP earnings and the actual cash-generating capacity of the business that investors must adjust for in their valuation models.
The variability in EPS growth, which swung from -43.2% in 2025Q1 to 22.6% in 2026Q1, suggests that non-operating items and compensation accounting create significant noise in reported figures. A focus on normalized earnings is essential to determine if the underlying business is truly scaling its bottom-line efficiency.
While Paycom's single-database model is a clear differentiator, the recent deceleration in revenue growth to single digits suggests that the company may be reaching a ceiling in its primary market, raising concerns about the sustainability of its premium valuation relative to legacy HCM competitors.
Short-term investors should be wary of the potential for margin compression if the company is forced to increase customer acquisition costs to enter new, more competitive segments. The reliance on domestic labor market health makes the company particularly vulnerable to cyclical downturns that could impair its long-term growth trajectory.
Quick answers to the most common questions about buying PAYC stock.
For fiscal year 2025, Paycom Software, Inc. (PAYC) reported total revenue of $2.05B. This represents a 2571.1% increase compared to $76.8M in 2012.
Paycom Software, Inc. (PAYC) is profitable, generating $453.4M in net income for the fiscal year ending 2025 with a net profit margin of 22.1%.
Paycom Software, Inc. (PAYC) reported an operating income of $567.2M, resulting in an operating profit margin of 27.6%. This margin reflects the operational efficiency of the business before interest and taxes.
Paycom Software, Inc. (PAYC) generated $1.61B in gross profit for the year, representing a gross profit margin of 78.6%. This demonstrates the company's core pricing power and production efficiency.