Paycom Software, Inc.(PAYC)Stock Analysis
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Rank #348 of 2,879 stocksTOP 25%
Rankings refresh quarterly once 80% of peers have filed (~45 days after quarter-end). Next update: ~Aug 14, 2026.
Revenue Growth
Profitability
Balance Sheet
Earnings Quality
Free Cash Flow
Institutional Flow
Revenue Scale
Dilution Risk
PAYC Stock Analysis & AI Quality Score
AI stock analysis and institutional research for Paycom Software, Inc. (PAYC), a Technology sector company. 13F Pro's AI-powered ranking engine scores PAYC at 69.8/100 on a 32-signal composite quality model, placing it at rank #348 of 2,879 stocks — the top 25% of the AI-ranked universe. PAYC scores in the top quartile across profitability (85.1), institutional flow (84.8), free cash flow (80.5). Areas of concern include earnings quality (37.2), which score below median versus the broader universe. Shareholder dilution risk is elevated at 23.6/100, reflecting ongoing share issuance or stock-based compensation. Based on the latest XBRL financial filings (Q1 2026), Paycom Software, Inc. reports quarterly revenue of $571.9M, net income of $155.7M, an operating margin of 36.8%. Top institutional holders of PAYC by reported 13-F value include BlackRock,, HARRIS ASSOCIATES L P, VANGUARD PORTFOLIO MANAGEMENT, based on the most recent SEC filings. PAYC trades on the NYSE exchange and files with the SEC under CIK 1590955. 13F Pro's AI research platform runs 10 specialized AI analysts — value, growth, momentum, macro, and activist specialists — that debate PAYC daily and publish AI-generated analysis with cited SEC sources. The platform aggregates historical XBRL financial facts, 10-Q and 10-K filings, insider Form 4 transactions, and institutional 13-F holdings for Paycom Software, Inc. directly from SEC EDGAR. Paycom Software, Inc.'s 13F Pro composite quality score has ranged between 8 and 80 since 2021, currently 69.8 — an improving long-term trajectory across 56 quarterly and live scoring snapshots.
What's Driving PAYC's Business? Latest 10-Q Breakdown
AI-extracted from Paycom Software, Inc.'s 10-Q filed 2026-05-07 — Q1 2026 (quarter ended March 31, 2026). Every figure is machine-verified against the filing text on SEC EDGAR.
Paycom grew recurring revenue 8.8% to $544M and net income 11.8% to $155.7M in Q1 2026, while aggressively repurchasing $1.1B of shares and borrowing $675M.
Biggest Revenue Drivers
Total revenue: $571.9M+7.8% YoY
Addition of new clients, increased revenue from sales of additional applications to existing clients, and pricing strategies, partially offset by client attrition.
Lower interest rates during Q1 2026 compared to Q1 2025, partially offset by higher average funds held for clients balances ($3.1B vs $2.9B).
Largest Expense Items
$7.1M increase in marketing and advertising expense and $3.0M increase in other expenses, partially offset by decrease in employee-related expenses.
Decrease primarily due to reduced headcount and lower employee-related expenses.
$4.1M increase in technology and communications expense, $3.8M increase in other expenses, partially offset by $4.0M decrease in employee-related expenses.
Watch Items from the Filing
- Interest on funds held for clients declined 8.9% YoY despite higher average balances, making revenue sensitive to further interest rate declines; a 100 bps rate decrease would reduce interest income ~$26.1M over 12 months.
- Company borrowed $675M under revolving credit facility and repurchased $1.1B of shares in Q1 2026; debt outstanding is $675M with maturity April 2031 and leverage ratio covenant ≤3.5x.
- Client attrition among smaller clients partially offset revenue growth; no single client represents ≥10% of revenues, indicating diversified customer base.
- Naming rights agreement amended in July 2025 with termination on earlier of Sept 30, 2028 or last arena event; Q1 2026 amendment generated $9.0M gain; remaining sponsorship obligations through Sept 2028.
AI-extracted and verified against SEC EDGAR filing text. Not investment advice.
Revenue
Q1 2026
$571.9M
Net Income
Q1 2026
$155.7M
Free Cash Flow
Q1 2026
$182.6M
Operating Margin
Q1 2026
36.8%
Revenue & Net Income
Earnings Per Share
Key Financials Over Time
Export Financial Table · Pro+Revenue
+8.9% YoYNet Income
-9.7% YoYOperating Income
-10.6% YoYEPS (Diluted)
-9.4% YoYTotal Assets
+29.7% YoYTotal Debt
Op. Cash Flow
+27.2% YoY| Metric | FY 2025 | FY 2024 | FY 2023 | FY 2021 | FY 2020 | FY 2019 |
|---|---|---|---|---|---|---|
| Revenue | $2.05B +8.9% | $1.88B +11.2% | $1.69B +60.5% | $1.06B +25.4% | $841.4M +14.1% | $737.7M |
| Net Income | $453.4M -9.7% | $502.0M +47.3% | $340.8M +73.9% | $196.0M +36.6% | $143.5M -20.6% | $180.6M |
| Operating Income | $567.2M -10.6% | $634.3M +40.5% | $451.3M +78.0% | $253.6M +36.2% | $186.1M -17.7% | $226.2M |
| EPS (Diluted) | $8.08 -9.4% | $8.92 +51.7% | $5.88 +74.5% | $3.37 +37.0% | $2.46 -20.4% | $3.09 |
| Total Assets | $7.60B +29.7% | $5.86B +39.6% | $4.20B +30.6% | $3.22B +23.3% | $2.61B +4.9% | $2.49B |
| Total Debt | — | — | — | $30.9M -5.3% | $32.7M -5.1% | $34.4M |
| Operating Cash Flow | $678.9M +27.2% | $533.9M +10.1% | $485.0M +51.9% | $319.4M +40.6% | $227.2M +1.3% | $224.3M |
AI Insight: PAYC Financial Trends
Paycom's operating income surged 13% sequentially to $210M in Q1 2026, but equity dropped sharply to $812M from debt issuance.
• Revenue grew 8% year-over-year from $530M in Q1 2025 to $572M in Q1 2026.
• Operating income expanded from $185M in Q1 2025 to $210M in Q1 2026, up 14% year-over-year.
• Operating cash flow strengthened from $182M in Q1 2025 to $214M in Q1 2026.
• Net income increased from $139M in Q1 2025 to $156M in Q1 2026.
⚠ Total debt of $675M appeared for first time in Q1 2026 while equity fell from $1,732M to $812M.
⚠ Q2 2025 revenue declined sequentially to $484M from $530M in Q1 2025, breaking growth momentum.
AI Insight: PAYC Ratio Trends
Paycom's operating margin surged to 36.8% in Q1 2026, the highest level in nearly two years, while ROIC jumped to 56.5%.
• Operating margin expanded from 22.8% in Q3 2025 to 36.8% in Q1 2026, reaching a multi-quarter high.
• ROIC accelerated sharply from 26.4% in Q3 2025 to 56.5% in Q1 2026, indicating improved capital efficiency.
• ROE spiked to 76.7% in Q1 2026 from 25.9% in Q3 2025, reflecting strong earnings leverage.
• Net profit margin improved to 27.2% in Q1 2026 from 22.4% in Q3 2025.
⚠ Profitability metrics show high quarterly volatility, with operating margin ranging from 22.8% to 36.8% across recent quarters.
⚠ Debt-to-equity ratio of 0.83 represents the first leverage data point available in the trend series.
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Top Institutional Holders of PAYC
BlackRock, Inc.
$734.2M6,041,109 shHARRIS ASSOCIATES L P
$395.9M3,257,774 shVANGUARD PORTFOLIO MANAGEMENT LLC
$290.6M2,390,904 shVANGUARD CAPITAL MANAGEMENT LLC
$255.6M2,103,146 shTWO SIGMA INVESTMENTS, LP
$212.4M1,747,666 shSTATE STREET CORP
$209.9M1,726,949 shBAILLIE GIFFORD & CO
$186.8M1,537,278 shGEODE CAPITAL MANAGEMENT, LLC
$160.8M1,322,853 shFMR LLC
$145.5M1,197,336 shREINHART PARTNERS, LLC.
$123.5M1,015,715 sh
| Fund | Value | Shares |
|---|---|---|
| BlackRock, Inc. | $734.2M | 6,041,109 |
| HARRIS ASSOCIATES L P | $395.9M | 3,257,774 |
| VANGUARD PORTFOLIO MANAGEMENT LLC | $290.6M | 2,390,904 |
| VANGUARD CAPITAL MANAGEMENT LLC | $255.6M | 2,103,146 |
| TWO SIGMA INVESTMENTS, LP | $212.4M | 1,747,666 |
| STATE STREET CORP | $209.9M | 1,726,949 |
| BAILLIE GIFFORD & CO | $186.8M | 1,537,278 |
| GEODE CAPITAL MANAGEMENT, LLC | $160.8M | 1,322,853 |
| FMR LLC | $145.5M | 1,197,336 |
| REINHART PARTNERS, LLC. | $123.5M | 1,015,715 |
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Is PAYC a good stock to buy?
13F Pro's AI-powered analysis of Paycom Software, Inc. (PAYC) draws on SEC EDGAR-sourced fundamentals, institutional 13F holdings, and insider Form 4 transactions in the Technology sector (listed on NYSE). The 32-signal AI Quality Score, current rank, and full bull/bear verdict for PAYC are available on the PAYC stock profile dashboard — with the same data, AI insights, ratios, and institutional activity refreshed after every 10-K, 10-Q, 13F, and Form 4 filing.
Which hedge funds own PAYC?
Institutional investors are required to disclose their holdings quarterly via SEC Form 13F. 13F Pro aggregates these filings to show which hedge funds, mutual funds, and asset managers are buying or selling PAYC. Combined with insider transaction data from Form 4 filings and AI-powered analysis from 10 specialized research agents, 13F Pro provides a comprehensive view of Paycom Software, Inc.'s investment landscape.