Paycom Software, Inc. Reports Fourth Quarter and Year-End 2022 Results

Rhea-AI Summary

Paycom Software reported impressive financial results for the year ended December 31, 2022, achieving total revenues of $1,375 million, a 30% increase year-over-year. The GAAP net income reached $281 million, equating to $4.84 per diluted share, with an adjusted EBITDA of $580 million, representing 42% of total revenues. In Q4 2022, revenues of $371 million marked a 30% growth compared to the previous year. Recurring revenues accounted for 98.2% of total revenues, demonstrating strong client retention. Looking ahead, Paycom anticipates Q1 2023 revenues between $443 million and $445 million, and expects 2023 total revenues to be $1.700 billion to $1.702 billion.

Positive

• Full Year Revenues increased by 30% year-over-year to $1,375 million.
• GAAP Net Income rose to $281 million, or $4.84 per diluted share.
• Adjusted EBITDA for the year was $580 million, representing 42% of total revenues.
• Fourth Quarter Revenues climbed 30% year-over-year to $371 million.
• Recurring revenues constituted 98.2% of total revenues for Q4 2022.
• Annual revenue retention rate was strong at 93%.

Negative

• None.

Full Year Revenues of $1,375 million, up 30% year-over-year

Full Year GAAP Net Income of $281 million, representing 20% of total revenues, or $4.84 per diluted share

Full Year Adjusted EBITDA of $580 million, representing 42% of total revenues

Fourth Quarter Revenues of $371 million, up 30% year-over-year

OKLAHOMA CITY--(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 and year ended December 31, 2022.

“We delivered outstanding results in 2022, with accelerating revenue growth and strong margins, reflecting strong demand for our user-friendly solutions and attractive client return on investment,” said Paycom’s founder, chairman and CEO, Chad Richison. “Employees are doing their own payroll with Beti®, and that’s what is best for the employee and the employer. In 2023, we will continue to invest in innovation around the employee experience and automation to deliver more value to our clients.”

Financial Highlights for the Fourth Quarter of 2022

Total Revenues of $370.6 million represented a 30.0% increase compared to total revenues of $285.0 million in the same period last year. Recurring revenues of $364.0 million increased 30.0% from the comparable prior year period, and constituted 98.2% of total revenues.

GAAP Net Income was $80.0 million, or $1.38 per diluted share, compared to GAAP net income of $48.7 million, or $0.84 per diluted share, in the same period last year.

Non-GAAP Net Income¹ was $100.2 million, or $1.73 per diluted share, compared to $64.4 million, or $1.11 per diluted share, in the same period last year.

Adjusted EBITDA¹ was $163.9 million, compared to $109.6 million in the same period last year.

Cash and Cash Equivalents were $400.7 million as of December 31, 2022, compared to $278.0 million as of December 31, 2021.

Total Debt, Net was $29.0 million as of December 31, 2022, compared to $29.2 million as of December 31, 2021.

Financial Highlights for the Full Year 2022

Total Revenues of $1,375.2 million represented a 30.3% increase compared to total revenues of $1,055.5 million last year. Recurring revenues of $1,351.9 million increased 30.4% from last year, and constituted 98.3% of total revenues.

GAAP Net Income was $281.4 million, or $4.84 per diluted share, compared to GAAP net income of $196.0 million, or $3.37 per diluted share, last year.

Non-GAAP Net Income¹ was $357.2 million, or $6.14 per diluted share, compared to $260.4 million, or $4.48 per diluted share, last year.

Adjusted EBITDA¹ was $579.7 million, compared to $419.3 million last year.

¹ Adjusted EBITDA and non-GAAP net income 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.

Business Highlights

Paycom earned a Top 25 ranking from Top Workplaces USA, and a Top Workplaces in Oklahoma award, its tenth-consecutive year on the list. Paycom was also named a Best Company for Women.

Total client count increased to 36,561 as of December 31, 2022, up 8% from the prior year-end. On a parent company grouping basis, client count as of December 31, 2022, increased to 19,081, up 8% from the prior year-end.

Annual revenue retention rate was 93% for the year ended December 31, 2022.

Paycom stored data for over 6.5 million persons employed by its clients during the year ended December 31, 2022, up 14.0% year-over-year.

Financial Outlook

Paycom provides the following expected financial guidance for the quarter ending March 31, 2023 and the year ending December 31, 2023.

Quarter Ending March 31, 2023:

Total Revenues in the range of $443 million to $445 million.

Adjusted EBITDA in the range of $210 million to $212 million.

Year Ending December 31, 2023:

Total Revenues in the range of $1.700 billion to $1.702 billion.

Adjusted EBITDA in the range of $700 million to $702 million.

We have not reconciled the forward-looking adjusted EBITDA ranges presented above and discussed on the teleconference call to net income, nor the forward-looking adjusted EBITDA margins and forward looking non-GAAP effective income tax rate discussed on the teleconference call 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 and other items. Further, we have not reconciled the forward-looking adjusted gross margin discussed on the teleconference call to GAAP gross margin because applicable information for future periods, on which this reconciliation would be based, is not readily available due to uncertainty regarding, and the potential variability of, cost of revenues, including non-cash stock-based compensation expense. Accordingly, reconciliations of the forward-looking adjusted EBITDA ranges to net income, the forward-looking adjusted EBITDA margins to net income margin, the forward-looking adjusted gross margin to gross margin, and the forward-looking non-GAAP effective income tax rate to the GAAP effective income tax rate are not available at this time without unreasonable effort. During the teleconference call, we also refer to a forward-looking estimate of our implied revenue growth rate plus adjusted EBITDA margin, or the “Rule of 65”. Because we are unable to reconcile forward-looking adjusted EBITDA margin to net income margin without unreasonable effort, we are unable to reconcile the “Rule of 65” to a comparable GAAP measure 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, “Rule of 65” and “Rule of 72”. 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 the change in fair value of our interest rate swap, (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 the change in fair value of our interest rate swap, 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) “Rule of 65” and “Rule of 72” each as revenue growth rate (expressed as a percentage) plus adjusted EBITDA margin (calculated as described in clause (vii)) and (ix) 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. 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, 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 and total research and development costs. 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, February 7, 2023, at 5:00 p.m. Eastern time to discuss its financial results. To access this call, dial (844) 200-6205 (domestic) or (929) 526-1599 (international) and provide 948754 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

For nearly 25 years, Paycom Software Inc. (NYSE:PAYC) has simplified businesses and the lives of their employees through easy-to-use HR and payroll technology to empower transparency and direct access to data. And thanks to its industry-first solution, Beti®, those employees now do their own payroll and are guided to find and fix costly errors before payroll submission. From onboarding and benefits enrollment to talent management and more, Paycom’s software streamlines processes, drives efficiencies and gives employees power over their own HR information, all in a single app. Named one of the World’s Most Innovative Companies by Fast Company and best employers in the U.S. by Top Workplaces, Paycom can serve businesses of all sizes and in all 50 states from offices across the country.

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 Paycom’s 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; trends, opportunities and risks affecting our business, industry and financial results; future expansion or growth plans and potential for future growth; 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; our ability to attract and retain qualified employees and key personnel; future regulatory, judicial and legislative changes; how certain factors affecting our performance correlate to improvement or deterioration in the labor market; our plan to open additional sales offices 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 corporate headquarters and other facilities; our plans to repurchase shares of our common stock through a stock repurchase plan; 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 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 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 thousands, except per share amounts)
		December 31,
		2022				2021
Assets
Current assets:
Cash and cash equivalents		$	400,730			$	277,978
Accounts receivable			22,843				9,490
Prepaid expenses			34,056				23,729
Inventory			1,607				1,131
Income tax receivable			5,583				16,413
Deferred contract costs			96,378				76,724
Current assets before funds held for clients			561,197				405,465
Funds held for clients			2,202,975				1,846,573
Total current assets			2,764,172				2,252,038
Property and equipment, net			402,448				348,953
Intangible assets, net			54,017				58,028
Goodwill			51,889				51,889
Long-term deferred contract costs			567,974				461,852
Other assets			62,013				42,385
Total assets		$	3,902,513			$	3,215,145
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable		$	16,054			$	5,772
Accrued commissions and bonuses			28,439				22,357
Accrued payroll and vacation			45,023				34,259
Deferred revenue			19,825				16,277
Current portion of long-term debt			—				1,775
Accrued expenses and other current liabilities			59,990				63,397
Current liabilities before client funds obligation			169,331				143,837
Client funds obligation			2,207,706				1,846,573
Total current liabilities			2,377,037				1,990,410
Deferred income tax liabilities, net			141,033				145,504
Long-term deferred revenue			97,591				85,149
Net long-term debt, less current portion			29,000				27,380
Other long-term liabilities			75,245				72,988
Total long-term liabilities			342,869				331,021
Total liabilities			2,719,906				2,321,431
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.01 par value (100,000 shares authorized, 62,518 and 62,298 shares issued at December 31, 2022 and December 31, 2021, respectively; 57,867 and 58,012 shares outstanding at December 31, 2022 and December 31, 2021, respectively)			625				623
Additional paid-in capital			576,622				465,594
Retained earnings			1,196,968				915,579
Accumulated other comprehensive earnings (loss)			(3,703	)			—
Treasury stock, at cost (4,651 and 4,286 shares at December 31, 2022 and December 31, 2021, respectively)			(587,905	)			(488,082	)
Total stockholders’ equity			1,182,607				893,714
Total liabilities and stockholders’ equity		$	3,902,513			$	3,215,145

Paycom Software, Inc.
Unaudited Consolidated Statements of Comprehensive Income
(in thousands, except per share amounts)
		Three Months Ended December 31,								Year Ended December 31,
		2022				2021				2022				2021
Revenues
Recurring		$	364,008			$	280,026			$	1,351,856			$	1,036,691
Implementation and other			6,600				4,960				23,362				18,833
Total revenues			370,608				284,986				1,375,218				1,055,524
Cost of revenues
Operating expenses			47,541				37,863				169,806				130,475
Depreciation and amortization			11,530				8,660				42,935				31,411
Total cost of revenues			59,071				46,523				212,741				161,886
Administrative expenses
Sales and marketing			92,727				75,509				346,561				275,994
Research and development			39,569				34,414				148,343				118,426
General and administrative			60,021				49,606				239,130				209,840
Depreciation and amortization			13,386				10,308				49,764				35,811
Total administrative expenses			205,703				169,837				783,798				640,071
Total operating expenses			264,774				216,360				996,539				801,957
Operating income			105,834				68,626				378,679				253,567
Interest expense			(949	)			—				(2,536	)			—
Other income (expense), net			9,104				1,376				13,435				2,395
Income before income taxes			113,989				70,002				389,578				255,962
Provision for income taxes			34,038				21,315				108,189				60,002
Net income		$	79,951			$	48,687			$	281,389			$	195,960
Earnings per share, basic		$	1.38			$	0.84			$	4.86			$	3.39
Earnings per share, diluted		$	1.38			$	0.84			$	4.84			$	3.37
Weighted average shares outstanding:
Basic			57,867				58,007				57,928				57,885
Diluted			58,037				58,238				58,175				58,191
Comprehensive earnings (loss):
Net income		$	79,951			$	48,687			$	281,389			$	195,960
Unrealized net gains (losses) on available-for-sale securities			124				—				(4,757	)			—
Tax effect			(14	)			—				1,054				—
Other comprehensive income (loss), net of tax			110				—				(3,703	)			—
Comprehensive earnings (loss)		$	80,061			$	48,687			$	277,686			$	195,960

Paycom Software, Inc.
Unaudited Consolidated Statements of Cash Flows
(in thousands)
		Year Ended December 31,
		2022				2021
Cash flows from operating activities
Net income		$	281,389			$	195,960
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			92,699				67,222
Accretion of discount on available-for-sale securities			(1,020	)			(452	)
Non-cash marketing expense			1,734				1,051
(Gain)/loss on disposition of property and equipment			(150	)			146
Amortization of debt issuance costs			847				36
Stock-based compensation expense			94,898				97,506
Cash paid for derivative settlement			205				(741	)
Gain on derivative			(1,559	)			(662	)
Deferred income taxes, net			(3,210	)			32,906
Other			(206	)			—
Changes in operating assets and liabilities:
Accounts receivable			(13,353	)			(360	)
Prepaid expenses			(6,497	)			(5,875	)
Inventory			(224	)			481
Other assets			(13,907	)			(7,862	)
Deferred contract costs			(122,440	)			(103,356	)
Accounts payable			11,676				(660	)
Income taxes, net			10,830				(5,966	)
Accrued commissions and bonuses			6,082				8,654
Accrued payroll and vacation			10,764				9,730
Deferred revenue			15,990				14,600
Accrued expenses and other current liabilities			555				17,004
Net cash provided by operating activities			365,103				319,362
Cash flows from investing activities
Purchases of investments from funds held for clients			(268,718	)			(398,819	)
Proceeds from investments from funds held for clients			382,230				267,341
Purchases of intangible assets			(4,120	)			(5,500	)
Purchases of property and equipment			(132,678	)			(120,692	)
Net cash used in investing activities			(23,286	)			(257,670	)
Cash flows from financing activities
Proceeds from the issuance of debt			29,000				—
Repurchases of common stock			(94,652	)			—
Withholding taxes paid related to net share settlements			(5,171	)			(65,580	)
Payments on long-term debt			(29,287	)			(1,775	)
Net change in client funds obligation			361,133				233,079
Payment of debt issuance costs			(6,436	)			—
Net cash provided by financing activities			254,587				165,724
Increase in cash, cash equivalents, restricted cash and restricted cash equivalents			596,404				227,416
Cash, cash equivalents, restricted cash and restricted cash equivalents
Cash, cash equivalents, restricted cash and restricted cash equivalents, beginning of period			1,812,691				1,585,275
Cash, cash equivalents, restricted cash and restricted cash equivalents, end of period		$	2,409,095			$	1,812,691

Paycom Software, Inc.
Unaudited Consolidated Statements of Cash Flows
(in thousands)
		Year Ended December 31,
		2022				2021
Reconciliation of cash, cash equivalents, restricted cash and restricted cash equivalents
Cash and cash equivalents		$	400,730			$	277,978
Restricted cash included in funds held for clients			2,008,365				1,534,713
Total cash, cash equivalents, restricted cash and restricted cash equivalents, end of period		$	2,409,095			$	1,812,691
Supplemental disclosures of cash flow information:
Cash paid for interest, net of amounts capitalized		$	507			$	2
Cash paid for income taxes		$	100,578			$	33,068
Non-cash investing and financing activities:
Purchases of property and equipment, accrued but not paid		$	5,899			$	7,581
Stock-based compensation for capitalized software		$	8,965			$	7,141
Right of use assets obtained in exchange for operating lease liabilities		$	21,467			$	14,141

Paycom Software, Inc. Unaudited Reconciliations of GAAP to Non-GAAP Financial Measures (in thousands, except per share amounts)
		Three Months Ended December 31,								Year Ended December 31,
		2022				2021				2022				2021
Net income to adjusted EBITDA:
Net income		$	79,951			$	48,687			$	281,389			$	195,960
Interest expense			949				—				2,536				—
Provision for income taxes			34,038				21,315				108,189				60,002
Depreciation and amortization			24,916				18,968				92,699				67,222
EBITDA			139,854				88,970				484,813				323,184
Non-cash stock-based compensation expense			24,083				21,142				94,898				97,506
Change in fair value of interest rate swap			—				(540	)			—				(1,403	)
Adjusted EBITDA		$	163,937			$	109,572			$	579,711			$	419,287
Net income margin			21.6	%			17.1	%			20.5	%			18.6	%
Adjusted EBITDA margin			44.2	%			38.4	%			42.2	%			39.7	%

		Three Months Ended December 31,								Year Ended December 31,
		2022				2021				2022				2021
Net income to non-GAAP net income:
Net income		$	79,951			$	48,687			$	281,389			$	195,960
Non-cash stock-based compensation expense			24,083				21,142				94,898				97,506
Change in fair value of interest rate swap			—				(540	)			—				(1,403	)
Income tax effect on non-GAAP adjustments			(3,873	)			(4,854	)			(19,053	)			(31,652	)
Non-GAAP net income		$	100,161			$	64,435			$	357,234			$	260,411
Weighted average shares outstanding:
Basic			57,867				58,007				57,928				57,885
Diluted			58,037				58,238				58,175				58,191
Earnings per share, basic		$	1.38			$	0.84			$	4.86			$	3.39
Earnings per share, diluted		$	1.38			$	0.84			$	4.84			$	3.37
Non-GAAP net income per share, basic		$	1.73			$	1.11			$	6.17			$	4.50
Non-GAAP net income per share, diluted		$	1.73			$	1.11			$	6.14			$	4.48

		Three Months Ended December 31,								Year Ended December 31,
		2022				2021				2022				2021
Earnings per share to non-GAAP net income per share, basic:
Earnings per share, basic		$	1.38			$	0.84			$	4.86			$	3.39
Non-cash stock-based compensation expense			0.42				0.36				1.64				1.68
Change in fair value of interest rate swap			—				(0.01	)			—				(0.02	)
Income tax effect on non-GAAP adjustments			(0.07	)			(0.08	)			(0.33	)			(0.55	)
Non-GAAP net income per share, basic		$	1.73			$	1.11			$	6.17			$	4.50
		Three Months Ended December 31,								Year Ended December 31,
		2022				2021				2022				2021
Earnings per share to non-GAAP net income per share, diluted:
Earnings per share, diluted		$	1.38			$	0.84			$	4.84			$	3.37
Non-cash stock-based compensation expense			0.41				0.36				1.63				1.68
Change in fair value of interest rate swap			—				(0.01	)			—				(0.02	)
Income tax effect on non-GAAP adjustments			(0.06	)			(0.08	)			(0.33	)			(0.55	)
Non-GAAP net income per share, diluted		$	1.73			$	1.11			$	6.14			$	4.48

		Three Months Ended December 31,								Year Ended December 31,
		2022				2021				2022				2021
Adjusted gross profit:
Total revenues		$	370,608			$	284,986			$	1,375,218			$	1,055,524
Less: Total cost of revenues			(59,071	)			(46,523	)			(212,741	)			(161,886	)
Total gross profit			311,537				238,463				1,162,477				893,638
Plus: Non-cash stock-based compensation expense			946				1,189				4,671				4,570
Total adjusted gross profit		$	312,483			$	239,652			$	1,167,148			$	898,208
Gross margin			84.1	%			83.7	%			84.5	%			84.7	%
Adjusted gross margin			84.3	%			84.1	%			84.9	%			85.1	%

		Three Months Ended December 31,								Year Ended December 31,
		2022				2021				2022				2021
Adjusted sales and marketing expenses:
Sales and marketing expenses		$	92,727			$	75,509			$	346,561			$	275,994
Less: Non-cash stock-based compensation expense			(5,473	)			(3,234	)			(18,659	)			(13,801	)
Adjusted sales and marketing expenses		$	87,254			$	72,275			$	327,902			$	262,193
Total revenues		$	370,608			$	284,986			$	1,375,218			$	1,055,524
Sales and marketing expenses as a % of revenues			25.0	%			26.5	%			25.2	%			26.1	%
Adjusted sales and marketing expenses as a % of revenues			23.5	%			25.4	%			23.8	%			24.8	%

		Three Months Ended December 31,								Year Ended December 31,
		2022				2021				2022				2021
Adjusted total administrative expenses:
Total administrative expenses		$	205,703			$	169,837			$	783,798			$	640,071
Less: Non-cash stock-based compensation expense			(23,137	)			(19,953	)			(90,227	)			(92,936	)
Adjusted total administrative expenses		$	182,566			$	149,884			$	693,571			$	547,135
Total revenues		$	370,608			$	284,986			$	1,375,218			$	1,055,524
Total administrative expenses as a % of revenues			55.5	%			59.6	%			57.0	%			60.6	%
Adjusted total administrative expenses as a % of revenues			49.3	%			52.6	%			50.4	%			51.8	%

		Three Months Ended December 31,								Year Ended December 31,
		2022				2021				2022				2021
Adjusted research and development expenses:
Research and development expenses		$	39,569			$	34,414			$	148,343			$	118,426
Less: Non-cash stock-based compensation expense			(2,948	)			(2,133	)			(11,063	)			(7,527	)
Adjusted research and development expenses		$	36,621			$	32,281			$	137,280			$	110,899
Total revenues		$	370,608			$	284,986			$	1,375,218			$	1,055,524
Research and development expenses as a % of revenues			10.7	%			12.1	%			10.8	%			11.2	%
Adjusted research and development expenses as a % of revenues			9.9	%			11.3	%			10.0	%			10.5	%

		Three Months Ended December 31,								Year Ended December 31,
		2022				2021				2022				2021
Total research and development costs:
Capitalized research and development costs		$	17,572			$	13,716			$	66,407			$	52,876
Research and development expenses			39,569				34,414				148,343				118,426
Total research and development costs		$	57,141			$	48,130			$	214,750			$	171,302
Total revenues		$	370,608			$	284,986			$	1,375,218			$	1,055,524
Total research and development costs as a % of revenues			15.4	%			16.9	%			15.6	%			16.2	%
Adjusted total research and development costs:
Total research and development costs		$	57,141			$	48,130			$	214,750			$	171,302
Less: Capitalized non-cash stock-based compensation			(2,420	)			(2,033	)			(8,965	)			(7,141	)
Less: Non-cash stock-based compensation expense			(2,948	)			(2,133	)			(11,063	)			(7,527	)
Adjusted total research and development costs		$	51,773			$	43,964			$	194,722			$	156,634
Total revenues		$	370,608			$	284,986			$	1,375,218			$	1,055,524
Adjusted total research and development costs as a % of revenues			14.0	%			15.4	%			14.2	%			14.8	%

Paycom Software, Inc. Unaudited Components of Non-Cash Stock-Based Compensation Expense (in thousands)
		Three Months Ended December 31,								Year Ended December 31,
		2022				2021				2022				2021
Non-cash stock-based compensation expense:
Operating expenses		$	946			$	1,189			$	4,671			$	4,570
Sales and marketing			5,473				3,234				18,659				13,801
Research and development			2,948				2,133				11,063				7,527
General and administrative			14,716				14,586				60,505				71,608
Total non-cash stock-based compensation expense		$	24,083			$	21,142			$	94,898			$	97,506

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20230207005229/en/

Investor Relations Contact:

James Samford, 800-580-4505

investors@paycom.com

Source: Paycom Software, Inc.

FAQ

What were Paycom's total revenues for the full year 2022?

Paycom's total revenues for the full year 2022 were $1,375 million.

What was Paycom's GAAP net income for the fourth quarter of 2022?

Paycom's GAAP net income for the fourth quarter of 2022 was $80 million, or $1.38 per diluted share.

How much did Paycom's recurring revenues increase in 2022?

Paycom's recurring revenues increased by 30.4% in 2022.

What is Paycom's revenue outlook for Q1 2023?

Paycom expects total revenues in the range of $443 million to $445 million for Q1 2023.

What total revenue does Paycom forecast for the year ending December 31, 2023?

Paycom forecasts total revenues between $1.700 billion and $1.702 billion for the year ending December 31, 2023.