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Paycom Software, Inc. Reports First Quarter 2023 Results

05/02/2023

First Quarter Revenues of $452 million, up 28% from the comparable prior year period

First Quarter GAAP Net Income of $119 million, representing 26% of total revenues, or $2.06 per diluted share

First Quarter Non-GAAP Net Income of $143 million, of $2.46 per diluted share

First Quarter Adjusted EBITDA of $221 million, representing 49% of total revenues

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 March 31, 2023.

“Results for the first quarter of 2023 were excellent, with robust revenue growth from new clients and expanding margins, as demand for automation and our easy-to-use HCM solutions continues to increase,” said Paycom’s founder, chairman and CEO, Chad Richison. “Our unique value proposition, particularly with Beti where employees do their own payroll, continues to resonate with clients and their employees.”

Financial Highlights for the First Quarter of 2023

Total Revenues of $451.6 million represented a 27.8% increase compared to total revenues of $353.5 million in the same period last year. Recurring revenues of $444.4 million increased 27.6% from the comparable prior year period, and constituted 98.4% of total revenues.

GAAP Net Income was $119.3 million, or $2.06 per diluted share, compared to GAAP net income of $91.9 million, or $1.58 per diluted share, in the same period last year.

Non-GAAP Net Income1was $142.7 million, or $2.46 per diluted share, compared to $110.6 million, or $1.90 per diluted share, in the same period last year.

Adjusted EBITDA1 was $220.5 million, compared to $170.1 million in the same period last year.

Cash and Cash Equivalents were $505.6 million as of March 31, 2023, compared to $400.7 million as of December 31, 2022.

Total Debt was $29.0 million as of March 31, 2023 and December 31, 2022.

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.

Financial Outlook

Paycom provides the following expected financial guidance for the quarter ending June 30, 2023 and the year ending December 31, 2023.

Quarter Ending June 30, 2023:

Total Revenues in the range of $397 million to $399 million.

Adjusted EBITDA in the range of $152 million to $154 million.

Year Ending December 31, 2023:

Total Revenues in the range of $1.713 billion to $1.715 billion.

Adjusted EBITDA in the range of $717 million to $719 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, and “Rule of 65”. 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, and (viii) “Rule of 65” 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, May 2, 2023, at 5:00 p.m. Eastern time to discuss its financial results. To access this call, dial (833) 470-1428 (domestic) or (404) 975-4839 (international) and provide 863310 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 through direct access to their data. And thanks to its industry-first solution, Beti®, U.S. 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. Recognized nationally for its technology and workplace culture, Paycom can now serve businesses of all sizes in the U.S. and internationally.

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 pay cash dividends; 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)

 

 

 

 

 

 

 

 

 

 

March 31, 2023

 

 

December 31, 2022

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

505,590

 

 

$

400,730

 

Accounts receivable

 

 

17,802

 

 

 

22,843

 

Prepaid expenses

 

 

40,260

 

 

 

34,056

 

Inventory

 

 

887

 

 

 

1,607

 

Income tax receivable

 

 

 

 

 

5,583

 

Deferred contract costs

 

 

102,374

 

 

 

96,378

 

Current assets before funds held for clients

 

 

666,913

 

 

 

561,197

 

Funds held for clients

 

 

2,387,778

 

 

 

2,202,975

 

Total current assets

 

 

3,054,691

 

 

 

2,764,172

 

Property and equipment, net

 

 

421,017

 

 

 

402,448

 

Intangible assets, net

 

 

53,040

 

 

 

54,017

 

Goodwill

 

 

51,889

 

 

 

51,889

 

Long-term deferred contract costs

 

 

602,205

 

 

 

567,974

 

Other assets

 

 

58,780

 

 

 

62,013

 

Total assets

 

$

4,241,622

 

 

$

3,902,513

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

10,036

 

 

$

16,054

 

Income tax payable

 

 

19,350

 

 

 

 

Accrued commissions and bonuses

 

 

17,594

 

 

 

28,439

 

Accrued payroll and vacation

 

 

36,188

 

 

 

45,023

 

Deferred revenue

 

 

20,505

 

 

 

19,825

 

Accrued expenses and other current liabilities

 

 

70,090

 

 

 

59,990

 

Current liabilities before client funds obligation

 

 

173,763

 

 

 

169,331

 

Client funds obligation

 

 

2,391,335

 

 

 

2,207,706

 

Total current liabilities

 

 

2,565,098

 

 

 

2,377,037

 

Deferred income tax liabilities, net

 

 

139,661

 

 

 

141,033

 

Long-term deferred revenue

 

 

100,297

 

 

 

97,591

 

Long-term debt

 

 

29,000

 

 

 

29,000

 

Other long-term liabilities

 

 

73,095

 

 

 

75,245

 

Total long-term liabilities

 

 

342,053

 

 

 

342,869

 

Total liabilities

 

 

2,907,151

 

 

 

2,719,906

 

Commitments and contingencies

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Common stock, $0.01 par value (100,000 shares authorized, 62,525 and 62,518 shares issued at March 31, 2023 and December 31, 2022, respectively; 57,872 and 57,867 shares outstanding at March 31, 2023 and December 31, 2022, respectively)

 

 

625

 

 

 

625

 

Additional paid-in capital

 

 

608,966

 

 

 

576,622

 

Retained earnings

 

 

1,316,264

 

 

 

1,196,968

 

Accumulated other comprehensive earnings (loss)

 

 

(2,853

)

 

 

(3,703

)

Treasury stock, at cost (4,653 and 4,651 shares at March 31, 2023 and December 31, 2022, respectively)

 

 

(588,531

)

 

 

(587,905

)

Total stockholders’ equity

 

 

1,334,471

 

 

 

1,182,607

 

Total liabilities and stockholders’ equity

 

$

4,241,622

 

 

$

3,902,513

 

 

Paycom Software, Inc.

 

Unaudited Consolidated Statements of Comprehensive Income

 

(in thousands, except per share amounts)

 

 

 

 

 

Three Months Ended March 31,

 

 

 

2023

 

 

2022

 

Revenues

 

 

 

 

 

 

Recurring

 

$

444,421

 

 

$

348,164

 

Implementation and other

 

 

7,216

 

 

 

5,355

 

Total revenues

 

 

451,637

 

 

 

353,519

 

Cost of revenues

 

 

 

 

 

 

Operating expenses

 

 

53,085

 

 

 

38,492

 

Depreciation and amortization

 

 

12,147

 

 

 

9,992

 

Total cost of revenues

 

 

65,232

 

 

 

48,484

 

Administrative expenses

 

 

 

 

 

 

Sales and marketing

 

 

103,574

 

 

 

74,996

 

Research and development

 

 

42,669

 

 

 

31,605

 

General and administrative

 

 

65,605

 

 

 

60,504

 

Depreciation and amortization

 

 

14,125

 

 

 

11,663

 

Total administrative expenses

 

 

225,973

 

 

 

178,768

 

Total operating expenses

 

 

291,205

 

 

 

227,252

 

Operating income

 

 

160,432

 

 

 

126,267

 

Interest expense

 

 

(837

)

 

 

(215

)

Other income (expense), net

 

 

6,004

 

 

 

1,412

 

Income before income taxes

 

 

165,599

 

 

 

127,464

 

Provision for income taxes

 

 

46,303

 

 

 

35,534

 

Net income

 

$

119,296

 

 

$

91,930

 

Earnings per share, basic

 

$

2.06

 

 

$

1.58

 

Earnings per share, diluted

 

$

2.06

 

 

$

1.58

 

Weighted average shares outstanding:

 

 

 

 

 

 

Basic

 

 

57,867

 

 

 

58,014

 

Diluted

 

 

57,991

 

 

 

58,219

 

Comprehensive earnings (loss):

 

 

 

 

 

 

Net income

 

$

119,296

 

 

$

91,930

 

Unrealized net gains (losses) on available-for-sale securities

 

 

1,050

 

 

 

(1,522

)

Tax effect

 

 

(200

)

 

 

403

 

Other comprehensive income (loss), net of tax

 

 

850

 

 

 

(1,119

)

Comprehensive earnings (loss)

 

$

120,146

 

 

$

90,811

 

 

Paycom Software, Inc.

 

Unaudited Consolidated Statements of Cash Flows

 

(in thousands)

 

 

 

 

 

Three Months Ended March 31,

 

 

 

2023

 

 

2022

 

Cash flows from operating activities

 

 

 

 

 

 

Net income

 

$

119,296

 

 

$

91,930

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

26,272

 

 

 

21,655

 

Accretion of discount on available-for-sale securities

 

 

(124

)

 

 

(303

)

Non-cash marketing expense

 

 

418

 

 

 

437

 

Gain on disposition of property and equipment

 

 

(13

)

 

 

 

Amortization of debt issuance costs

 

 

308

 

 

 

9

 

Stock-based compensation expense

 

 

27,819

 

 

 

22,055

 

Cash paid for derivative settlement

 

 

 

 

 

(174

)

Gain on derivative

 

 

 

 

 

(1,089

)

Deferred income taxes, net

 

 

(1,650

)

 

 

(10,332

)

Other

 

 

78

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

 

5,041

 

 

 

(8,455

)

Prepaid expenses

 

 

(6,984

)

 

 

(4,859

)

Inventory

 

 

385

 

 

 

124

 

Other assets

 

 

2,923

 

 

 

(2,970

)

Deferred contract costs

 

 

(38,519

)

 

 

(36,261

)

Accounts payable

 

 

(4,645

)

 

 

5,406

 

Income taxes, net

 

 

24,933

 

 

 

39,593

 

Accrued commissions and bonuses

 

 

(10,845

)

 

 

(10,309

)

Accrued payroll and vacation

 

 

(8,835

)

 

 

8,579

 

Deferred revenue

 

 

3,386

 

 

 

3,390

 

Accrued expenses and other current liabilities

 

 

6,859

 

 

 

(1,195

)

Net cash provided by operating activities

 

 

146,103

 

 

 

117,231

 

Cash flows from investing activities

 

 

 

 

 

 

Purchases of investments from funds held for clients

 

 

(25,000

)

 

 

(169,152

)

Proceeds from investments from funds held for clients

 

 

25,000

 

 

 

136,000

 

Purchases of property and equipment

 

 

(40,618

)

 

 

(34,474

)

Net cash used in investing activities

 

 

(40,618

)

 

 

(67,626

)

Cash flows from financing activities

 

 

 

 

 

 

Withholding taxes paid related to net share settlements

 

 

(626

)

 

 

(218

)

Payments on long-term debt

 

 

 

 

 

(444

)

Net change in client funds obligation

 

 

183,629

 

 

 

2,099,530

 

Net cash provided by financing activities

 

 

183,003

 

 

 

2,098,868

 

Increase in cash, cash equivalents, restricted cash and restricted cash equivalents

 

 

288,488

 

 

 

2,148,473

 

Cash, cash equivalents, restricted cash and restricted cash equivalents

 

 

 

 

 

 

Cash, cash equivalents, restricted cash and restricted cash equivalents, beginning of period

 

 

2,409,095

 

 

 

1,812,691

 

Cash, cash equivalents, restricted cash and restricted cash equivalents, end of period

 

$

2,697,583

 

 

$

3,961,164

 

 

Paycom Software, Inc.

 

Unaudited Consolidated Statements of Cash Flows

 

(in thousands)

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31,

 

 

 

2023

 

 

2022

 

Reconciliation of cash, cash equivalents, restricted cash and restricted cash equivalents

 

 

 

 

 

 

Cash and cash equivalents

 

$

505,590

 

 

$

360,594

 

Restricted cash included in funds held for clients

 

 

2,191,993

 

 

 

3,600,570

 

Total cash, cash equivalents, restricted cash and restricted cash equivalents, end of period

 

$

2,697,583

 

 

$

3,961,164

 

 

 

 

 

 

 

 

Supplemental disclosures of cash flow information:

 

 

 

 

 

 

Non-cash investing and financing activities:

 

 

 

 

 

 

Purchases of property and equipment, accrued but not paid

 

$

6,991

 

 

$

5,394

 

Stock-based compensation for capitalized software

 

$

3,597

 

 

$

1,891

 

Right of use assets obtained in exchange for operating lease liabilities

 

$

1,933

 

 

$

4,146

 

 

Paycom Software, Inc.

Unaudited Reconciliations of GAAP to Non-GAAP Financial Measures

(in thousands, except per share amounts)

 

 

 

Three Months Ended March 31,

 

 

 

2023

 

 

2022

 

Net income to adjusted EBITDA:

 

 

 

 

 

 

Net income

 

$

119,296

 

 

$

91,930

 

Interest expense

 

 

837

 

 

 

215

 

Provision for income taxes

 

 

46,303

 

 

 

35,534

 

Depreciation and amortization

 

 

26,272

 

 

 

21,655

 

EBITDA

 

 

192,708

 

 

 

149,334

 

Non-cash stock-based compensation expense

 

 

27,819

 

 

 

22,055

 

Change in fair value of interest rate swap

 

 

 

 

 

(1,263

)

Adjusted EBITDA

 

$

220,527

 

 

$

170,126

 

Net income margin

 

 

26.4

%

 

 

26.0

%

Adjusted EBITDA margin

 

 

48.8

%

 

 

48.1

%

 

 

Three Months Ended March 31,

 

 

 

2023

 

 

2022

 

Net income to non-GAAP net income:

 

 

 

 

 

 

Net income

 

$

119,296

 

 

$

91,930

 

Non-cash stock-based compensation expense

 

 

27,819

 

 

 

22,055

 

Change in fair value of interest rate swap

 

 

 

 

 

(1,263

)

Income tax effect on non-GAAP adjustments

 

 

(4,464

)

 

 

(2,074

)

Non-GAAP net income

 

$

142,651

 

 

$

110,648

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

Basic

 

 

57,867

 

 

 

58,014

 

Diluted

 

 

57,991

 

 

 

58,219

 

 

 

 

 

 

 

 

Earnings per share, basic

 

$

2.06

 

 

$

1.58

 

Earnings per share, diluted

 

$

2.06

 

 

$

1.58

 

Non-GAAP net income per share, basic

 

$

2.47

 

 

$

1.91

 

Non-GAAP net income per share, diluted

$

2.46

$

1.90

 

 

Three Months Ended March 31,

 

 

 

2023

 

 

2022

 

Earnings per share to non-GAAP net income per share, basic:

 

 

 

 

 

 

Earnings per share, basic

 

$

2.06

 

 

$

1.58

 

Non-cash stock-based compensation expense

 

 

0.48

 

 

 

0.38

 

Change in fair value of interest rate swap

 

 

 

 

 

(0.02

)

Income tax effect on non-GAAP adjustments

 

 

(0.07

)

 

 

(0.03

)

Non-GAAP net income per share, basic

 

$

2.47

 

 

$

1.91

 

 

 

Three Months Ended March 31,

 

 

 

2023

 

 

2022

 

Earnings per share to non-GAAP net income per share, diluted:

 

 

 

 

 

 

Earnings per share, diluted

 

$

2.06

 

 

$

1.58

 

Non-cash stock-based compensation expense

 

 

0.48

 

 

 

0.38

 

Change in fair value of interest rate swap

 

 

 

 

 

(0.02

)

Income tax effect on non-GAAP adjustments

 

 

(0.08

)

 

 

(0.04

)

Non-GAAP net income per share, diluted

 

$

2.46

 

 

$

1.90

 

 

 

Three Months Ended March 31,

 

 

 

2023

 

 

2022

 

Adjusted gross profit:

 

 

 

 

 

 

Total revenues

 

$

451,637

 

 

$

353,519

 

Less: Total cost of revenues

 

 

(65,232

)

 

 

(48,484

)

Total gross profit

 

 

386,405

 

 

 

305,035

 

Plus: Non-cash stock-based compensation expense

 

 

2,385

 

 

 

982

 

Total adjusted gross profit

 

$

388,790

 

 

$

306,017

 

Gross margin

 

 

85.6

%

 

 

86.3

%

Adjusted gross margin

 

 

86.1

%

 

 

86.6

%

 

 

Three Months Ended March 31,

 

 

 

2023

 

 

2022

 

Adjusted sales and marketing expenses:

 

 

 

 

 

 

Sales and marketing expenses

 

$

103,574

 

 

$

74,996

 

Less: Non-cash stock-based compensation expense

 

 

(5,476

)

 

 

(2,877

)

Adjusted sales and marketing expenses

 

$

98,098

 

 

$

72,119

 

 

 

 

 

 

 

 

Total revenues

 

$

451,637

 

 

$

353,519

 

Sales and marketing expenses as a % of revenues

 

 

22.9

%

 

 

21.2

%

Adjusted sales and marketing expenses as a % of revenues

 

 

21.7

%

 

 

20.4

%

 

 

Three Months Ended March 31,

 

 

 

2023

 

 

2022

 

Adjusted total administrative expenses:

 

 

 

 

 

 

Total administrative expenses

 

$

225,973

 

 

$

178,768

 

Less: Non-cash stock-based compensation expense

 

 

(25,434

)

 

 

(21,073

)

Adjusted total administrative expenses

 

$

200,539

 

 

$

157,695

 

 

 

 

 

 

 

 

Total revenues

 

$

451,637

 

 

$

353,519

 

Total administrative expenses as a % of revenues

 

 

50.0

%

 

 

50.5

%

Adjusted total administrative expenses as a % of revenues

 

 

44.4

%

 

 

44.6

%

 

 

Three Months Ended March 31,

 

 

 

2023

 

 

2022

 

Adjusted research and development expenses:

 

 

 

 

 

 

Research and development expenses

 

$

42,669

 

 

$

31,605

 

Less: Non-cash stock-based compensation expense

 

 

(5,258

)

 

 

(2,219

)

Adjusted research and development expenses

 

$

37,411

 

 

$

29,386

 

 

 

 

 

 

 

 

Total revenues

 

$

451,637

 

 

$

353,519

 

Research and development expenses as a % of revenues

 

 

9.4

%

 

 

8.9

%

Adjusted research and development expenses as a % of revenues

 

 

8.3

%

 

 

8.3

%

 

 

Three Months Ended March 31,

 

 

 

2023

 

 

2022

 

Total research and development costs:

 

 

 

 

 

 

Capitalized research and development costs

 

$

21,353

 

 

$

15,400

 

Research and development expenses

 

 

42,669

 

 

 

31,605

 

Total research and development costs

 

$

64,022

 

 

$

47,005

 

 

 

 

 

 

 

 

Total revenues

 

$

451,637

 

 

$

353,519

 

Total research and development costs as a % of revenues

 

 

14.2

%

 

 

13.3

%

 

 

 

 

 

 

 

Adjusted total research and development costs:

 

 

 

 

 

 

Total research and development costs

 

$

64,022

 

 

$

47,005

 

Less: Capitalized non-cash stock-based compensation

 

 

(3,597

)

 

 

(1,891

)

Less: Non-cash stock-based compensation expense

 

 

(5,258

)

 

 

(2,219

)

Adjusted total research and development costs

 

$

55,167

 

 

$

42,895

 

 

 

 

 

 

 

 

Total revenues

 

$

451,637

 

 

$

353,519

 

Adjusted total research and development costs as a % of revenues

 

 

12.2

%

 

 

12.1

%

Paycom Software, Inc.

Unaudited Components of Non-Cash Stock-Based Compensation Expense

(in thousands)

 

 

 

Three Months Ended March 31,

 

 

 

2023

 

 

2022

 

Non-cash stock-based compensation expense:

 

 

 

 

 

 

Operating expenses

 

$

2,385

 

 

$

982

 

Sales and marketing

 

 

5,476

 

 

 

2,877

 

Research and development

 

 

5,258

 

 

 

2,219

 

General and administrative

 

 

14,700

 

 

 

15,977

 

Total non-cash stock-based compensation expense

 

$

27,819

 

 

$

22,055

 

 

Paycom Software, Inc.
Investor Relations:
James Samford, 800-580-4505
investors@paycom.com

Source: Paycom Software, Inc.

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