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Investing.com -- Paycom Software (ETR:SOWGn), Inc. (NYSE:PAYC) reported second-quarter earnings that significantly exceeded Wall Street expectations, prompting the company to raise its full-year guidance and sending shares up 9.7% in trading.
The cloud-based human capital management software provider posted adjusted earnings of $2.06 per share, handily beating analyst estimates of $1.78. Revenue climbed to $483.6 million, surpassing the consensus forecast of $472.01 million and representing a 10.5% increase YoY.
Recurring revenue, which constituted 94.1% of total revenue, grew 12.2% to $455.1 million compared to the same period last year. The strong performance led Paycom to raise its full-year 2025 revenue guidance to between $2.045 billion and $2.055 billion, above the analyst consensus of $2.03 billion.
"We delivered very strong results this quarter, and we are raising our growth and margin targets for 2025," said Paycom founder, CEO and chairman, Chad Richison. "Our sales team delivered robust new logo adds, and clients are benefiting from the most automated solution on the market."
The company also provided an optimistic outlook for its adjusted EBITDA, projecting a range of $872.0 million to $882.0 million for fiscal 2025, representing a margin of approximately 43% at the midpoint. Paycom expects recurring and other revenue growth of approximately 10% YoY.
Paycom ended the quarter with a strong balance sheet, reporting $532.2 million in cash and cash equivalents as of June 30, 2025, up from $402.0 million at the end of 2024. The company maintains zero debt while continuing to return capital to shareholders through dividends and share repurchases, having paid $21.8 million in cash dividends and repurchased 127,717 shares for $32.6 million during the quarter.
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