Paycom Q3 earnings rise to $133M; 2026 outlook raised

Nine-month free cash flow was $536.5 million, compared with $285.4 million in 2025.

Available on EDGAR 11/04/2026 - 04:10 PM EST Accepted by SEC EDGAR 11/04/2026 - 04:10 PM EST Learn about SEC filing dates

Rhea-AI Filing Summary

Paycom Software, Inc. reported third-quarter 2026 revenue of $543.8 million, up 10.2% year over year. Recurring and other revenue was $519.3 million, up 11.3%, and represented 95.5% of total revenue. GAAP net income was $133.2 million, or $2.99 per diluted share, compared with $110.7 million and $1.96 a year earlier. Non-GAAP net income was $150.0 million, or $3.37 per diluted share, while adjusted EBITDA was $268.1 million, compared with $194.3 million.

Management said it was again raising its full-year outlook. Paycom expects total revenue of $2.213 billion to $2.218 billion, approximately 8% year-over-year growth; recurring and other revenue growth of approximately 9%; interest on funds held for clients of approximately $107.0 million; and adjusted EBITDA of $1.069 billion to $1.079 billion, with a 48.5% margin at the midpoint. Cash and cash equivalents were $193.9 million as of September 30, 2026, compared with $370.0 million as of December 31, 2025. Long-term debt was $750.0 million as of September 30, 2026. For the nine months ended September 30, 2026, operating cash flow was $613.9 million, compared with $482.8 million a year earlier; common-stock repurchases were $1,390.9 million.

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Positive

• Moderate pointThird-quarter revenue reached $543.8 million, up 10.2% year over year.
• Moderate pointGAAP net income increased to $133.2 million from $110.7 million.
• Moderate pointAdjusted EBITDA increased to $268.1 million from $194.3 million.
• Moderate pointNine-month operating cash flow increased to $613.9 million from $482.8 million.

Negative

• None.

Filing Explained

The filing reports long-term debt at September 30, 2026, after reporting none at December 31, 2025.

This Form 8-K furnishes Paycom’s third-quarter results; its balance sheet reports fewer common shares outstanding on September 30, 2026 than on December 31, 2025.

Over those dates, issued shares rose, while treasury shares also rose.

For the nine months ended September 30, 2026, the cash-flow statement reports credit-facility borrowings and $150 million in long-term debt payments.

8-K Event Classification

2 items: 2.02, 9.01

2 items

Item 2.02 Results of Operations and Financial Condition Financial

Disclosure of earnings results, typically an earnings press release or preliminary financials.

Item 9.01 Financial Statements and Exhibits Exhibits

Financial statements, pro forma financial information, or exhibit attachments filed with this report.

Key Figures

Total revenue: $543.8 million Recurring and other revenues: $519.3 million GAAP net income: $133.2 million +5 more

8 metrics

Total revenue $543.8 million Third quarter 2026; up 10.2% year over year from $493.3 million.

Recurring and other revenues $519.3 million Third quarter 2026; up 11.3% year over year and 95.5% of total revenue.

GAAP net income $133.2 million Third quarter 2026; compared with $110.7 million in 2025.

Diluted earnings per share $2.99 per diluted share Third quarter 2026; compared with $1.96 in 2025.

Non-GAAP net income $150.0 million Third quarter 2026; compared with $109.6 million in 2025.

Adjusted EBITDA $268.1 million Third quarter 2026; compared with $194.3 million in 2025.

Cash and cash equivalents $193.9 million As of September 30, 2026; $370.0 million as of December 31, 2025.

Full-year total revenue guidance $2.213 billion to $2.218 billion Expected for the year ending December 31, 2026.

Key Terms

Adjusted EBITDA, Non-GAAP net income, funds held for clients, free cash flow, +1 more

5 terms

Adjusted EBITDA financial

"Adjusted EBITDA was $268.1 million"

Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.

Non-GAAP net income financial

"Non-GAAP net income was $150.0 million"

Non-GAAP net income is a company's profit figure that excludes certain costs or income that are included in standard accounting methods. Companies often use it to show what their earnings might look like without one-time expenses or other unusual items, helping investors see the company's core performance more clearly.

funds held for clients financial

"Interest on funds held for clients"

Money a financial firm or service provider keeps on behalf of its customers rather than claiming it as the firm’s own cash. Like a bank holding your paycheck in a locked safe for you, these client funds are kept separate to protect customers and meet legal rules; for investors, that separation matters because it reduces the firm’s usable cash, creates custody and reputational risk if mishandled, and affects how the company reports liabilities and liquidity.

free cash flow financial

"Free cash flow as net cash provided by operating activities"

Free cash flow is the amount of money a company has left over after paying all its expenses and investing in its business, like buying equipment or updating facilities. It shows how much cash is available to reward shareholders, pay down debt, or save for future growth. This helps investors understand if a company is financially healthy and able to grow.

available-for-sale securities financial

"Accretion of discount on available-for-sale securities"

Available-for-sale securities are investments in stocks, bonds or similar instruments that a company does not intend to trade frequently but may sell before they mature. They matter to investors because changes in the market value of these holdings show up as paper gains or losses on the company's balance sheet rather than immediately in profit, so they can affect reported net worth and the timing of income without changing day-to-day earnings. Think of them like items on a household shelf you might sell later: their value moves with the market even if you haven’t cashed out.

Earnings Snapshot

Total revenue: $543.8 million · Guidance included

Three months ended September 30, 2026

Total revenue $543.8 million Up 10.2% year over year

GAAP net income $133.2 million Compared with $110.7 million

Non-GAAP net income $150.0 million Compared with $109.6 million

Adjusted EBITDA $268.1 million Compared with $194.3 million

Guidance

For the year ending December 31, 2026: total revenue of $2.213 billion to $2.218 billion, representing approximately 8% year-over-year growth; recurring and other revenue growth of approximately 9%; interest on funds held for clients of approximately $107.0 million; and adjusted EBITDA of $1.069 billion to $1.079 billion, representing a 48.5% margin at the midpoint.

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What were PAYC's third-quarter 2026 revenue and recurring revenue?

Paycom reported total revenue of $543.8 million for the quarter ended September 30, 2026, up 10.2% year over year from $493.3 million. Recurring and other revenue was $519.3 million, up 11.3% and representing 95.5% of total revenue.

How much did PAYC earn per diluted share in Q3 2026?

GAAP net income was $133.2 million, or $2.99 per diluted share, compared with $110.7 million and $1.96 a year earlier. Non-GAAP net income was $150.0 million, or $3.37 per diluted share, compared with $109.6 million and $1.94.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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0001590955false00015909552026-11-042026-11-04

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported) November 4, 2026

Paycom Software, Inc.

(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation)	001-36393 (Commission File Number)	80-0957485 (IRS Employer Identification No.)
7501 W. Memorial Road, Oklahoma City, Oklahoma (Address of principal executive offices)		73142 (Zip Code)

Registrant’s telephone number, including area code: (405) 722-6900

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	PAYC	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b–2 of the Securities Exchange Act of 1934 (§240.12b–2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition.

On November 4, 2026, Paycom Software, Inc. (the “Company”) issued a press release announcing its financial results for the quarter ended September 30, 2026. A copy of the press release is furnished hereto as Exhibit 99.1 and is incorporated herein by reference. As previously announced, the Company will hold a conference call at 5:00 PM Eastern Time, on Wednesday, November 4, 2026, to discuss its financial results.

The information furnished pursuant to Item 2.02 (including Exhibit 99.1 hereto) shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.		Description of Exhibit
99.1		Press release, dated November 4, 2026, issued by Paycom Software, Inc. (furnished pursuant to Item 2.02).
104		Cover Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

			PAYCOM SOFTWARE, INC.
Date:	November 4, 2026	By:	/s/ Robert D. Foster
			Robert D. Foster
			Chief Financial Officer

Exhibit 99.1

Paycom Software, Inc. Reports Third Quarter 2026 Results

Third Quarter Total Revenues of $544 million, up 10% year over year

Third Quarter GAAP Net Income of $133 million, representing 24% of total revenues, or $2.99 per diluted share

Third Quarter Non-GAAP Net Income of $150 million, or $3.37 per diluted share

Third Quarter Adjusted EBITDA of $268 million, representing 49% of total revenues

OKLAHOMA CITY – November 4, 2026 – (BUSINESS WIRE) – Paycom Software, Inc. (“Paycom,” “we” and “our”) (NYSE: PAYC), a leading provider of comprehensive, cloud-based human capital management software, today announced its financial results for the quarter ended September 30, 2026.

“Our strong third-quarter results reflect the tremendous ROI clients are realizing from the automated decisioning logic built into our platform,” said Paycom founder and CEO Chad Richison. “Our software and infrastructure allow us to develop, release, host, distribute, and service technology that delivers greater value to our clients and Paycom. This represents a powerful advantage across our large and expanding TAM. Thanks to our strong performance, we are once again raising our full-year outlook.”

Financial Highlights for the Third Quarter of 2026

Total Revenues of $543.8 million represented a 10.2% increase compared to total revenues of $493.3 million in the same period last year. Recurring and other revenues of $519.3 million increased 11.3% from the comparable prior year period and constituted 95.5% of total revenues.

GAAP Net Income was $133.2 million, or $2.99 per diluted share, compared to GAAP net income of $110.7 million, or $1.96 per diluted share, in the same period last year.

Non-GAAP Net Income1 was $150.0 million, or $3.37 per diluted share, compared to $109.6 million, or $1.94 per diluted share, in the same period last year.

Adjusted EBITDA1 was $268.1 million, compared to $194.3 million in the same period last year.

Cash and Cash Equivalents were $193.9 million as of September 30, 2026, compared to $370.0 million as of December 31, 2025. During the quarter ended September 30, 2026, Paycom paid $16.7 million in cash dividends.

1Adjusted EBITDA, non-GAAP net income and non-GAAP net income per diluted share are non-GAAP financial measures. Please see the discussion below under the heading “Use of Non-GAAP Financial Information” and the reconciliations at the end of this release for additional information concerning these and other non-GAAP financial measures.

Financial Outlook

Paycom provides the following expected financial guidance for the year ending December 31, 2026.

Total revenue in the range of $2.213 billion to $2.218 billion, representing year-over-year growth of approximately 8%.

Recurring and other revenue growth of approximately 9% year over year.

Interest on funds held for clients of approximately $107.0 million.

Adjusted EBITDA in the range of $1.069 billion to $1.079 billion, representing a margin of 48.5% at the midpoint.

We have not reconciled the forward-looking adjusted EBITDA ranges and adjusted EBITDA margin presented above and discussed on the teleconference call to net income, and have not reconciled any other forward-looking non-GAAP metrics that may be discussed on the teleconference call, including free cash flow and non-GAAP effective income tax rate, to comparable GAAP measures, because applicable information for future periods, on which these reconciliations would be based, is not readily available due to uncertainty regarding, and the potential variability of, depreciation and amortization, interest expense, taxes, non-cash stock-based compensation expense, capital expenditures, changes in working capital and other items. Accordingly, reconciliations of the forward-looking adjusted EBITDA ranges to net income, the forward-looking adjusted EBITDA margin to net income margin, the forward-looking non-GAAP effective income tax rate to the GAAP effective

income tax rate, and the forward-looking free cash flow to net cash provided by operating activities are not available at this time without unreasonable effort.

Use of Non-GAAP Financial Information

To supplement our financial information presented in accordance with generally accepted accounting principles in the United States (“GAAP”), we present certain non-GAAP financial measures in this press release and on the related teleconference call, including adjusted EBITDA, non-GAAP net income, adjusted gross profit, adjusted gross margin, adjusted sales and marketing expenses, adjusted total administrative expenses, adjusted research and development expenses, adjusted total research and development costs, adjusted EBITDA margin, non-GAAP effective income tax rate, free cash flow and free cash flow margin. Management uses these non-GAAP financial measures as supplemental measures to review and assess the performance of our core business operations and for planning purposes. We define (i) adjusted EBITDA as net income plus interest expense, taxes, depreciation and amortization, non-cash stock-based compensation expense, certain transaction expenses that are not core to our operations (if any) and any loss on the extinguishment of debt, less any gain on modification of the naming rights agreement, (ii) non-GAAP net income as net income plus non-cash stock-based compensation expense, certain transaction expenses that are not core to our operations (if any) and any loss on the extinguishment of debt, less any gain on modification of the naming rights agreement, all of which are adjusted for the effect of income taxes, (iii) adjusted gross profit as gross profit plus applicable non-cash stock-based compensation expense, (iv) adjusted gross margin as gross profit plus applicable non-cash stock-based compensation expense, divided by total revenues, (v) each adjusted expense item as the GAAP expense amount less applicable non-cash stock-based compensation expense, (vi) adjusted total research and development costs as total research and development costs (including the capitalized portion) less applicable non-cash stock-based compensation (including the capitalized portion), (vii) adjusted EBITDA margin as adjusted EBITDA (calculated as described in clause (i)) divided by total revenues, (viii) non-GAAP effective income tax rate as the provision for income taxes plus the income tax effect on non-GAAP adjustments divided by non-GAAP net income (calculated as described in clause (ii)) plus the provision for income taxes and the income tax effect on non-GAAP adjustments, (ix) free cash flow as net cash provided by operating activities, less purchases of property and equipment and purchases of intangible assets (if any), and (x) free cash flow margin as free cash flow (calculated as described in clause (ix)) divided by total revenues. The terms “capital expenditures” and “cap ex” refer to the aggregate amount of purchases of property and equipment and purchases of intangible assets, if any, during the applicable period. The non-GAAP financial measures presented in this press release and discussed on the related teleconference call provide investors with greater transparency to the information used by management in its financial and operational decision-making. We believe these metrics are useful to investors because they facilitate comparisons of our core business operations across periods on a consistent basis, as well as comparisons with the results of peer companies, many of which use similar non-GAAP financial measures to supplement results under GAAP. In addition, adjusted EBITDA is a measure that provides useful information to management about the amount of cash available for reinvestment in our business, paying dividends, repurchasing common stock and other purposes. Management believes that the non-GAAP measures presented in this press release and discussed on the related teleconference call, when viewed in combination with our results prepared in accordance with GAAP, provide a more complete understanding of the factors and trends affecting our business and performance.

The non-GAAP financial measures presented in this press release and discussed on the related teleconference call are not measures of financial performance under GAAP and should not be considered a substitute for net income, gross profit, gross margin, research and development expenses, sales and marketing expenses, administrative expenses, total research and development costs, GAAP effective income tax rate and net cash provided by operating activities. Non-GAAP financial measures have limitations as analytical tools, and when assessing our operating performance, you should not consider these non-GAAP financial measures in isolation, or as a substitute for the consolidated statements of income data prepared in accordance with GAAP. The non-GAAP financial measures that we present may not be comparable to similarly titled measures of other companies, and other companies may not calculate such measures in the same manner as we do.

Conference Call Details

In conjunction with this announcement, Paycom will host a conference call today, November 4, 2026, at 5:00 p.m. Eastern time to discuss its financial results. To access this call, dial (833) 461-5787 and provide 133837666 as the access code. A live webcast as well as the replay of the conference call will be available on the Investor Relations page of Paycom’s website at investors.paycom.com.

About Paycom

Paycom Software, Inc. (NYSE: PAYC) is a cloud-based human capital management software provider that allows organizations of all sizes across the U.S. and internationally to set numerous HR and payroll tasks to “automatic” through employee-first technology. Built on a truly single database, Paycom’s full-solution automation manages the entire employment life cycle, helping organizations streamline processes and improve data accuracy. With its industry-first AI engine, IWant™, Paycom provides instant access to accurate employee data without requiring users to navigate or learn the software. For over 25 years, Paycom has been repeatedly recognized by third‑party reviewers as a leading payroll and HCM solution.

Financial Presentation

Dollar amounts are presented in millions, except amounts per share. As a result, some amounts may not sum or recalculate exactly due to rounding. All percentages have been calculated using unrounded amounts.

Forward-Looking Statements

Certain statements in this press release are, and certain statements on the related teleconference call may be, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are any statements that refer to our estimated or anticipated results, other non-historical facts or future events and include, but are not limited to, statements regarding our business strategy; anticipated future operating results and operating expenses, cash flows, capital resources, dividends and liquidity; competition; trends, opportunities and risks affecting our business, industry and financial results, including macroeconomic factors; future expansion or growth plans and potential for future growth, including internationally; our ability to attract new clients to purchase our solution; our ability to retain clients and induce them to purchase additional applications; our ability to accurately forecast future revenues and appropriately plan our expenses; market acceptance of our solution and applications; our expectations regarding future revenues generated by certain applications; the return on investment for users of our solution, as well as how certain applications may impact client employee usage and client satisfaction; our ability to attract and retain qualified employees and key personnel; future regulatory, judicial and legislative changes; how the performance of certain of our offerings is sensitive to changes in the labor market; our plan to expand our sales capacity and our ability to effectively execute such plan; the sufficiency of our existing cash and cash equivalents to meet our working capital and capital expenditure needs over the next 12 months; our plans regarding our capital expenditures and investment activity as our business grows, including with respect to research and development and the expansion of our facilities; our plans to pay cash dividends; our plans to repurchase shares of our common stock through a stock repurchase plan using cash and/or borrowings under our senior secured revolving credit facility; and our expected income tax rate for future periods. In addition, forward-looking statements also consist of statements involving trend analyses and statements including such words as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “should,” “will,” “would,” and similar expressions or the negative of such terms or other comparable terminology. These forward-looking statements are based only on information currently available to us, speak only as of the date hereof and are subject to business and economic risks. As such, our actual results could differ materially from those set forth in the forward-looking statements as a result of the factors discussed in our filings with the Securities and Exchange Commission, including but not limited to those discussed in our most recent Annual Report on Form 10-K. We do not undertake any obligation to update or revise the forward-looking statements to reflect events that occur or circumstances that exist after the date on which such statements were made, except to the extent required by law.

Paycom Software, Inc.

Unaudited Consolidated Balance Sheets

(in millions, except per share amounts)

		September 30, 2026				December 31, 2025
Assets
Current assets:
Cash and cash equivalents		$	193.9			$	370.0
Accounts receivable			56.2				44.9
Prepaid expenses			65.3				47.5
Inventory			2.1				1.7
Income tax receivable			12.5				78.2
Deferred contract costs			170.0				159.5
Current assets before funds held for clients			500.1				701.8
Funds held for clients			3,891.3				5,137.0
Total current assets			4,391.4				5,838.8
Property and equipment, net			625.7				687.3
Intangible assets, net			27.2				37.4
Goodwill			51.9				51.9
Long-term deferred contract costs			875.4				857.4
Operating lease right-of-use assets			74.4				89.4
Other assets			43.1				36.5
Total assets		$	6,089.2			$	7,598.7
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable		$	20.8			$	6.6
Accrued commissions and bonuses			31.4				28.2
Accrued payroll and vacation			39.0				60.1
Deferred revenue			29.8				28.3
Operating lease liabilities			23.1				28.4
Accrued expenses and other current liabilities			108.1				79.8
Current liabilities before client funds obligation			252.3				231.4
Client funds obligation			3,891.3				5,137.0
Total current liabilities			4,143.5				5,368.4
Deferred income tax liabilities, net			307.1				304.4
Long-term deferred revenue			124.1				121.9
Long-term debt			750.0				—
Long-term operating lease liabilities			50.4				61.9
Other long-term liabilities			6.7				10.6
Total long-term liabilities			1,238.3				498.8
Total liabilities			5,381.9				5,867.2
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.01 par value (100.0 shares authorized, 64.0 and 63.6 shares issued at September 30, 2026 and December 31, 2025, respectively; 44.3 and 54.8 shares outstanding at September 30, 2026 and December 31, 2025, respectively)			0.6				0.6
Additional paid-in capital			926.4				878.4
Retained earnings			2,600.3				2,255.6
Accumulated other comprehensive earnings (loss)			(0.8	)			0.3
Treasury stock, at cost (19.7 and 8.8 shares at September 30, 2026 and December 31, 2025, respectively)			(2,819.2	)			(1,403.4	)
Total stockholders’ equity			707.3				1,731.5
Total liabilities and stockholders’ equity		$	6,089.2			$	7,598.7

Paycom Software, Inc.

Unaudited Consolidated Statements of Comprehensive Income

(in millions, except per share amounts)

		Three Months Ended September 30,								Nine Months Ended September 30,
		2026				2025				2026				2025
Revenues
Recurring and other		$	519.3			$	466.5			$	1,568.5			$	1,421.6
Interest on funds held for clients			24.5				26.8				78.3				85.8
Total revenues			543.8				493.3				1,646.8				1,507.4
Cost of revenues
Operating expenses			62.6				64.1				190.1				198.8
Depreciation and amortization			24.6				21.3				73.5				58.8
Total cost of revenues			87.2				85.4				263.6				257.6
Administrative expenses
Sales and marketing			108.0				125.7				344.4				352.6
Research and development			38.5				74.1				151.1				211.2
General and administrative			88.2				71.9				234.8				207.8
Depreciation and amortization			26.1				23.6				78.4				68.1
Total administrative expenses			260.8				295.3				808.7				839.7
Total operating expenses			348.0				380.7				1,072.3				1,097.3
Operating income			195.8				112.6				574.5				410.1
Interest expense			(11.7	)			(1.1	)			(26.2	)			(2.7	)
Other income, net			1.2				41.3				9.1				52.9
Income before income taxes			185.3				152.8				557.5				460.3
Provision for income taxes			52.1				42.1				161.2				120.7
Net income		$	133.2			$	110.7			$	396.3			$	339.6
Earnings per share, basic		$	3.01			$	1.97			$	8.42			$	6.06
Earnings per share, diluted		$	2.99			$	1.96			$	8.40			$	6.02
Weighted average shares outstanding:
Basic			44.3				56.1				47.0				56.1
Diluted			44.5				56.4				47.2				56.4
Comprehensive earnings:
Net income		$	133.2			$	110.7			$	396.3			$	339.6
Unrealized net gains (losses) on available-for-sale securities			(0.4	)			0.4				(1.3	)			0.9
Tax effect			—				(0.2	)			0.2				0.1
Other comprehensive income (loss), net of tax			(0.4	)			0.2				(1.1	)			1.0
Comprehensive earnings		$	132.8			$	110.9			$	395.2			$	340.6

Paycom Software, Inc.

Unaudited Consolidated Statements of Cash Flows

(in millions)

		Nine Months Ended September 30,
		2026				2025
Cash flows from operating activities
Net income		$	396.3			$	339.6
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			151.9				126.9
Stock-based compensation expense			52.0				91.8
Amortization of debt issuance costs			1.1				1.1
Loss (gain) on disposition of property and equipment			7.2				(0.1	)
Accretion of discount on available-for-sale securities			(2.3	)			(9.2	)
Non-cash marketing expense			0.1				0.9
Deferred income taxes, net			3.0				109.6
Gain on modification of naming rights agreement			(9.0	)			(35.6	)
Other			(0.2	)			0.5
Changes in operating assets and liabilities:
Accounts receivable			(9.5	)			(11.2	)
Prepaid expenses			(23.0	)			(16.9	)
Inventory			(0.4	)			(0.4	)
Other assets			0.2				(2.3	)
Deferred contract costs			(29.8	)			(65.5	)
Income taxes, net			65.6				(65.4	)
Accounts payable			13.3				(2.8	)
Accrued commissions and bonuses			3.2				(8.7	)
Accrued payroll and vacation			(21.0	)			(4.4	)
Deferred revenue			3.6				6.5
Accrued expenses and other liabilities			13.3				26.5
Net change in operating right-of-use assets and operating lease liabilities			(1.8	)			1.9
Net cash provided by operating activities			613.9				482.8
Cash flows from investing activities
Purchases of investments from funds held for clients			(458.0	)			(711.9	)
Proceeds from the maturities of investments from funds held for clients			459.0				250.0
Purchases of property and equipment			(77.4	)			(197.4	)
Proceeds from sale of property and equipment			—				0.1
Net cash used in investing activities			(76.4	)			(659.2	)
Cash flows from financing activities
Proceeds from borrowings under credit facility			900.0				—
Payment of debt issuance costs			(8.1	)			—
Payments on long-term debt			(150.0	)			—
Repurchases of common stock			(1,390.9	)			(218.9	)
Withholding taxes paid related to net share settlements			(18.2	)			(42.4	)
Dividends paid			(52.2	)			(64.1	)
Proceeds from employee stock purchase plan			5.7				3.0
Net change in client funds obligation			(1,245.8	)			(1,845.8	)
Net cash used in financing activities			(1,959.4	)			(2,168.2	)
Decrease in cash, cash equivalents, restricted cash and restricted cash equivalents			(1,421.9	)			(2,344.6	)
Cash, cash equivalents, restricted cash and restricted cash equivalents
Cash, cash equivalents, restricted cash and restricted cash equivalents, beginning of period			5,132.5				4,042.8
Cash, cash equivalents, restricted cash and restricted cash equivalents, end of period		$	3,710.6			$	1,698.2

Paycom Software, Inc.

Unaudited Consolidated Statements of Cash Flows, continued

(in millions)

		Nine Months Ended September 30,
		2026				2025
Reconciliation of cash, cash equivalents, restricted cash and restricted cash equivalents
Cash and cash equivalents		$	193.9			$	375.0
Restricted cash included in funds held for clients			3,516.7				1,323.2
Total cash, cash equivalents, restricted cash and restricted cash equivalents, end of period		$	3,710.6			$	1,698.2
Supplemental disclosures of cash flow information:
Non-cash investing and financing activities:
Purchases of property and equipment, accrued but not paid		$	8.6			$	6.0
Stock-based compensation for capitalized software		$	2.6			$	20.4
Right-of-use assets obtained in exchange for operating lease liabilities		$	5.7			$	13.2

Paycom Software, Inc.

Unaudited Reconciliations of GAAP to Non-GAAP Financial Measures

(in millions, except per share amounts)

		Three Months Ended September 30,								Nine Months Ended September 30,
		2026				2025				2026				2025
Net income to adjusted EBITDA:
Net income		$	133.2			$	110.7			$	396.3			$	339.6
Interest expense			11.7				1.1				26.2				2.7
Provision for income taxes			52.1				42.1				161.2				120.7
Depreciation and amortization			50.7				44.9				151.9				126.9
EBITDA			247.7				198.9				735.5				589.8
Non-cash stock-based compensation expense			20.3				31.1				52.0				91.8
Gain on modification of naming rights agreement			—				(35.6	)			(9.0	)			(35.6	)
Adjusted EBITDA		$	268.1			$	194.3			$	778.5			$	645.9
Net income margin			24.5	%			22.4	%			24.1	%			22.5	%
Adjusted EBITDA margin			49.3	%			39.4	%			47.3	%			42.8	%

		Three Months Ended September 30,								Nine Months Ended September 30,
		2026				2025				2026				2025
Net income to non-GAAP net income:
Net income		$	133.2			$	110.7			$	396.3			$	339.6
Non-cash stock-based compensation expense			20.3				31.1				52.0				91.8
Gain on modification of naming rights agreement			—				(35.6	)			(9.0	)			(35.6	)
Income tax effect on non-GAAP adjustments			(3.6	)			3.4				(0.3	)			(11.8	)
Non-GAAP net income		$	150.0			$	109.6			$	439.0			$	383.9
Weighted average shares outstanding:
Basic			44.3				56.1				47.0				56.1
Diluted			44.5				56.4				47.2				56.4
Earnings per share, basic		$	3.01			$	1.97			$	8.42			$	6.06
Earnings per share, diluted		$	2.99			$	1.96			$	8.40			$	6.02
Non-GAAP net income per share, basic		$	3.38			$	1.95			$	9.33			$	6.85
Non-GAAP net income per share, diluted		$	3.37			$	1.94			$	9.31			$	6.81

		Three Months Ended September 30,								Nine Months Ended September 30,
		2026				2025				2026				2025
Earnings per share to non-GAAP net income per share, basic:
Earnings per share, basic		$	3.01			$	1.97			$	8.42			$	6.06
Non-cash stock-based compensation expense			0.46				0.55				1.11				1.64
Gain on modification of naming rights agreement			—				(0.64	)			(0.19	)			(0.64	)
Income tax effect on non-GAAP adjustments			(0.08	)			0.06				(0.01	)			(0.21	)
Non-GAAP net income per share, basic		$	3.38			$	1.95			$	9.33			$	6.85

		Three Months Ended September 30,								Nine Months Ended September 30,
		2026				2025				2026				2025
Earnings per share to non-GAAP net income per share, diluted:
Earnings per share, diluted		$	2.99			$	1.96			$	8.40			$	6.02
Non-cash stock-based compensation expense			0.46				0.55				1.10				1.63
Gain on modification of naming rights agreement			—				(0.63	)			(0.19	)			(0.63	)
Income tax effect on non-GAAP adjustments			(0.08	)			0.06				(0.01	)			(0.21	)
Non-GAAP net income per share, diluted		$	3.37			$	1.94			$	9.31			$	6.81

		Three Months Ended September 30,								Nine Months Ended September 30,
		2026				2025				2026				2025
Adjusted gross profit:
Total revenues		$	543.8			$	493.3			$	1,646.8			$	1,507.4
Less: Total cost of revenues			(87.2	)			(85.4	)			(263.6	)			(257.6	)
Total gross profit			456.6				407.9				1,383.2				1,249.8
Plus: Non-cash stock-based compensation expense			2.1				3.4				6.3				12.7
Total adjusted gross profit		$	458.7			$	411.3			$	1,389.5			$	1,262.5
Gross margin			84.0	%			82.7	%			84.0	%			82.9	%
Adjusted gross margin			84.4	%			83.4	%			84.4	%			83.8	%

		Three Months Ended September 30,								Nine Months Ended September 30,
		2026				2025				2026				2025
Adjusted sales and marketing expenses:
Sales and marketing expenses		$	108.0			$	125.7			$	344.4			$	352.6
Less: Non-cash stock-based compensation expense			(4.3	)			(6.6	)			(12.2	)			(19.1	)
Adjusted sales and marketing expenses		$	103.7			$	119.1			$	332.2			$	333.5
Total revenues		$	543.8			$	493.3			$	1,646.8			$	1,507.4
Sales and marketing expenses as a % of revenues			19.9	%			25.5	%			20.9	%			23.4	%
Adjusted sales and marketing expenses as a % of revenues			19.1	%			24.1	%			20.2	%			22.1	%

		Three Months Ended September 30,								Nine Months Ended September 30,
		2026				2025				2026				2025
Adjusted total administrative expenses:
Total administrative expenses		$	260.8			$	295.3			$	808.7			$	839.7
Less: Non-cash stock-based compensation expense			(18.2	)			(27.7	)			(45.7	)			(79.0	)
Adjusted total administrative expenses		$	242.6			$	267.6			$	763.0			$	760.7
Total revenues		$	543.8			$	493.3			$	1,646.8			$	1,507.4
Total administrative expenses as a % of revenues			48.0	%			59.9	%			49.1	%			55.7	%
Adjusted total administrative expenses as a % of revenues			44.6	%			54.3	%			46.3	%			50.5	%

		Three Months Ended September 30,								Nine Months Ended September 30,
		2026				2025				2026				2025
Adjusted research and development expenses:
Research and development expenses		$	38.5			$	74.1			$	151.1			$	211.2
Less: Non-cash stock-based compensation expense			(2.5	)			(9.9	)			(3.4	)			(29.4	)
Adjusted research and development expenses		$	36.0			$	64.2			$	147.8			$	181.8
Total revenues		$	543.8			$	493.3			$	1,646.8			$	1,507.4
Research and development expenses as a % of revenues			7.1	%			15.0	%			9.2	%			14.0	%
Adjusted research and development expenses as a % of revenues			6.6	%			13.0	%			9.0	%			12.1	%

		Three Months Ended September 30,								Nine Months Ended September 30,
		2026				2025				2026				2025
Total research and development costs:
Research and development expenses		$	38.5			$	74.1			$	151.1			$	211.2
Capitalized research and development costs			17.4				43.5				58.4				114.2
Total research and development costs		$	55.9			$	117.6			$	209.5			$	325.4
Total revenues		$	543.8			$	493.3			$	1,646.8			$	1,507.4
Total research and development costs as a % of revenues			10.3	%			23.8	%			12.7	%			21.6	%
Adjusted total research and development costs:
Total research and development costs		$	55.9			$	117.6			$	209.5			$	325.4
Less: Capitalized non-cash stock-based compensation			(1.5	)			(6.6	)			(2.6	)			(20.4	)
Less: Non-cash stock-based compensation expense			(2.5	)			(9.9	)			(3.4	)			(29.4	)
Adjusted total research and development costs		$	51.9			$	101.1			$	203.6			$	275.6
Total revenues		$	543.8			$	493.3			$	1,646.8			$	1,507.4
Adjusted total research and development costs as a % of revenues			9.5	%			20.5	%			12.4	%			18.3	%

		Nine Months Ended September 30,
		2026				2025
Free cash flow and free cash flow margin:
Net cash provided by operating activities		$	613.9			$	482.8
Purchases of property and equipment			(77.4	)			(197.4	)
Free cash flow		$	536.5			$	285.4
Operating cash flow margin			37.3	%			32.0	%
Free cash flow margin			32.6	%			18.9	%

Paycom Software, Inc.

Unaudited Components of Non-Cash Stock-Based Compensation Expense

(in millions)

		Three Months Ended September 30,								Nine Months Ended September 30,
		2026				2025				2026				2025
Non-cash stock-based compensation expense:
Operating expenses		$	2.1			$	3.4			$	6.3			$	12.7
Sales and marketing			4.3				6.6				12.2				19.1
Research and development			2.5				9.9				3.4				29.4
General and administrative			11.4				11.2				30.1				30.6
Total non-cash stock-based compensation expense		$	20.3			$	31.1			$	52.0			$	91.8

Contact

Paycom Software, Inc.

Investor Relations Contact:

James Samford, 800-580-4505

investors@paycom.com

Source: Paycom Software, Inc.

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