Paycom posts $47.3 million first-quarter profit
Paycom Software Inc. reported Tuesday that its net income during the first quarter rose 15% over the year-ago quarter.
Executives for the human capital management company praised the third consecutive quarter of growth, which coincided with Paycom's five-year anniversary this month as a publicly traded company on the New York Stock Exchange.
Net income was $47.3 million, or 81 cents per share, up from $41.2 million, or 70 cents a share, in the first quarter of 2018. Total revenue during the past three months was $200 million, up 30% from $154 million one year ago. Nearly all of it was recurring revenue, the company said.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) was $103 million, up from $80.7 million in the year-ago period.
“Our strong first-quarter results were driven by our proprietary software offering and focused sales efforts, positioning us well to accomplish our performance objectives for 2019,” said Chad Richison, Paycom’s founder and CEO. “Employee usage of human capital management (HCM) technology is the future of our industry. We believe comprehensive HCM software that is easy to use can lead to higher employee engagement, increased efficiencies, better job satisfaction and higher employee retention."
The earnings beat expectations the company released earlier this year.
Paycom stock closed at more than $200 per share for the first time on Friday increased Tuesday to $202.53.
The company expects second-quarter revenues to be in a range of $162.5 million to $164.5 million, with year-end total revenue of $718 million to $720 million. Its adjusted second-quarter EBITDA is expected to be in a range of $62.5 million to $64.5 million.
A new operations center should be completed within two years and is expected to support 1,000 jobs, the earning report stated.
In an earnings call with investors, Richison said Paycom's new Direct Data Exchange has helped its customers be more efficient with Paycom products. DDX, as it's called, lets customers see more about how their employees use Paycom services. Doing so can lead to Paycom services being used more often rather than emails or phone calls to human resources.
"We’ve seen clients go from 30% usage up to 90%. Even what we call good is beginning to change," he said. "They’re not emailing their bank … so I don’t understand why we’re not doing it in our industry."