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Paycom Software, Inc. Reports Third Quarter 2021 Results

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, 2021.

“We delivered very strong third quarter results, which is a reflection of the investments we’ve made in product innovation, sales and marketing, and providing world-class service,” said Paycom’s founder and CEO, Chad Richison. “Paycom’s differentiated solutions and go-to-market strategy are resonating with businesses of all sizes across the country. We continue to aggressively reinvest into the business to maximize our growth opportunities.”

Financial Highlights for the Third Quarter of 2021

Total Revenues of $256.2 million represented a 30.4% increase compared to total revenues of $196.5 million in the same period last year. Recurring revenues of $251.3 million increased 30.4% from the comparable prior year period, and constituted 98.1% of total revenues.

GAAP Net Income was $30.4 million, or $0.52 per diluted share, compared to GAAP net income of $27.5 million, or $0.47 per diluted share, in the same period last year.

Non-GAAP Net Income1 was $53.6 million, or $0.92 per diluted share, compared to $40.6 million, or $0.70 per diluted share, in the same period last year.

Adjusted EBITDA1 was $89.7 million, compared to $67.5 million in the same period last year.

Cash and Cash Equivalents were $230.9 million as of September 30, 2021, compared to $151.7 million as of December 31, 2020.

Total Debt, Net was $29.6 million as of September 30, 2021, compared to $30.9 million as of December 31, 2020.

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 and year ending December 31, 2021:

Quarter Ending December 31, 2021:

Total Revenues in the range of $274.5 million to $276.5 million.

Adjusted EBITDA in the range of $103 million to $105 million.

Year Ending December 31, 2021:

Total Revenues in the range of $1.045 billion to $1.047 billion.

Adjusted EBITDA in the range of $413 million to $415 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, are not readily available due to uncertainty regarding, and the potential variability of, depreciation and amortization, interest expense, taxes, non-cash stock-based compensation expense, change in fair value of our interest rate swap and other items. Further, we have not reconciled the forward-looking adjusted gross margin range 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 range 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 plus adjusted EBITDA margin for 2021, or the “Rule of 60.” 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 60” to a comparable GAAP measure without unreasonable effort.

Impact of the COVID-19 Pandemic

During the third quarter of 2021, we transitioned the majority of our employees back to our offices, with a large contingent temporarily utilizing alternating schedules between work-from-home and on-site arrangements. We may take further actions that alter our business operations as may be required by federal, state or local authorities or that we determine are in the best interests of our employees and clients. Business continuity and safety will continue to guide our return-to-office plans. Although we currently have some insight with respect to the effects of the COVID-19 pandemic to date, it is not possible at this time to estimate the full impact that the crisis could continue to have on our business and results of operations.

  • The COVID-19 pandemic has resulted in, and may continue to result in, headcount fluctuations across our client base. Because we charge our clients on a per-employee basis for certain services we provide, headcount fluctuations at our clients impacts our recurring revenue. The negative effects on our client revenue of lower headcount resulting from the pandemic were more than offset by headcount additions from new clients and modestly improved headcount levels among our pre-pandemic client base throughout the third quarter of 2021. We expect that our recurring revenue in future periods will continue to be impacted by such headcount fluctuations.
  • Despite growth in the number of clients in our base and growth in our average funds held for clients balance, significantly lower average interest rates during the first nine months of 2021 as compared to the first nine months of 2020 had a negative effect on interest earned on funds held for clients and, consequently, recurring revenue growth in the three and nine months ended September 30, 2021.
  • Our solution allows clients to seamlessly manage and communicate with their remote workforces. In a work-from-home environment, our clients have recognized the benefits of our focus on employee usage, as well as the strengths and advantages of our single database solution.
  • While our sales force continues to conduct meetings with current and prospective clients virtually, as prospective clients begin to take meetings in-person, we expect our sales process would transition to include a combination of virtual and in-person meetings.

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 and “Rule of 60”. 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 60” as revenue growth (expressed as a percentage) plus adjusted EBITDA margin (calculated as described in clause (vii)). 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, November 2, 2021, at 5:00 p.m. Eastern time to discuss its financial results. To access this call, dial (833) 233-4461 (domestic) or (647) 689-4140 (international) and announce Paycom as the conference name to the operator. 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. A replay of this conference call can also be accessed by dialing (800) 585-8367 (domestic) or (416) 621-4642 (international) until November 9, 2021. The replay passcode is 9493807.

About Paycom

As a leader in payroll and HR technology, Oklahoma City-based Paycom redefines the human capital management industry by allowing companies to effectively navigate a rapidly changing business environment. Its cloud-based software solution is based on a core system of record maintained in a single database for all human capital management functions, providing the functionality that businesses need to manage the complete employment lifecycle, from recruitment to retirement. Paycom has the ability to serve businesses of all sizes and in every industry. As one of the leading human capital management providers, Paycom serves clients 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 ability to relocate our Texas operations facility within an expected timeframe; our plans regarding our capital expenditures and investment activity as our business grows, including with respect to our new Texas operations facility and research and development; the expected impact on our consolidated financial statements of new accounting pronouncements; our plans to repurchase shares of our common stock through a stock repurchase plan; our expected income tax rate for future periods; and the impact of the novel coronavirus (COVID-19) pandemic on our business, results of operations, cash flows, financial condition and liquidity. 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 and Quarterly Report on Form 10-Q. 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)

September 30, 2021

December 31, 2020

Assets

Current assets:

Cash and cash equivalents

$

230,926

$

151,710

Accounts receivable

13,004

9,130

Prepaid expenses

26,643

17,854

Inventory

866

1,151

Income tax receivable

10,211

10,447

Deferred contract costs

71,559

60,819

Current assets before funds held for clients

353,209

251,111

Funds held for clients

2,959,973

1,613,494

Total current assets

3,313,182

1,864,605

Property and equipment, net

329,296

285,218

Intangible assets, net

59,057

319

Goodwill

51,889

51,889

Long-term deferred contract costs

430,761

371,357

Other assets

33,853

34,524

Total assets

$

4,218,038

$

2,607,912

Liabilities and Stockholders’ Equity

Current liabilities:

Accounts payable

$

9,441

$

6,787

Accrued commissions and bonuses

12,431

13,703

Accrued payroll and vacation

36,138

24,529

Deferred revenue

16,175

13,567

Current portion of long-term debt

1,775

1,775

Accrued expenses and other current liabilities

50,340

44,175

Current liabilities before client funds obligation

126,300

104,536

Client funds obligation

2,959,973

1,613,494

Total current liabilities

3,086,273

1,718,030

Deferred income tax liabilities, net

125,228

112,598

Long-term deferred revenue

81,702

73,259

Net long-term debt, less current portion

27,815

29,119

Other long-term liabilities

71,679

19,263

Total long-term liabilities

306,424

234,239

Total liabilities

3,392,697

1,952,269

Commitments and contingencies

Stockholders’ equity:

Common stock, $0.01 par value (100,000 shares authorized, 62,275 and 61,861 shares issued at September 30, 2021 and December 31, 2020, respectively; 57,997 and 57,739 shares outstanding at September 30, 2021 and December 31, 2020, respectively)

622

618

Additional paid-in capital

441,479

357,908

Retained earnings

866,892

719,619

Treasury stock, at cost (4,278 and 4,122 shares at September 30, 2021 and December 31, 2020, respectively)

(483,652

)

(422,502

)

Total stockholders’ equity

825,341

655,643

Total liabilities and stockholders’ equity

$

4,218,038

$

2,607,912

Paycom Software, Inc.

Unaudited Consolidated Statements of Income

(in thousands, except per share amounts)

Three Months Ended September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

Revenues

Recurring

$

251,306

$

192,664

$

756,665

$

609,109

Implementation and other

4,888

3,868

13,873

11,378

Total revenues

256,194

196,532

770,538

620,487

Cost of revenues

Operating expenses

34,766

24,278

92,612

71,651

Depreciation and amortization

7,914

6,634

22,751

18,865

Total cost of revenues

42,680

30,912

115,363

90,516

Administrative expenses

Sales and marketing

69,745

62,146

200,485

173,228

Research and development

31,077

21,772

84,012

65,171

General and administrative

59,980

40,516

160,234

121,487

Depreciation and amortization

9,407

7,150

25,503

20,209

Total administrative expenses

170,209

131,584

470,234

380,095

Total operating expenses

212,889

162,496

585,597

470,611

Operating income

43,305

34,036

184,941

149,876

Interest expense

(19

)

Other income (expense), net

244

246

1,019

(522

)

Income before income taxes

43,549

34,282

185,960

149,335

Provision for income taxes

13,170

6,800

38,687

30,249

Net income

$

30,379

$

27,482

$

147,273

$

119,086

Earnings per share, basic

$

0.52

$

0.48

$

2.55

$

2.07

Earnings per share, diluted

$

0.52

$

0.47

$

2.53

$

2.04

Weighted average shares outstanding:

Basic

57,935

57,603

57,843

57,609

Diluted

58,190

58,171

58,192

58,312

Paycom Software, Inc.

Unaudited Consolidated Statements of Cash Flows

(in thousands)

Nine Months Ended September 30,

2021

2020

Cash flows from operating activities

Net income

$

147,273

$

119,086

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

Depreciation and amortization

48,254

39,073

Accretion of discount on available-for-sale securities

(276

)

(1,374

)

Non-cash marketing expense

618

Loss on disposition of property and equipment

146

Amortization of debt issuance costs

27

27

Stock-based compensation expense

76,364

56,531

Cash paid for derivative settlement

(558

)

(424

)

(Gain)/loss on derivative

(305

)

2,042

Deferred income taxes, net

12,630

11,204

Changes in operating assets and liabilities:

Accounts receivable

(3,874

)

(3,057

)

Prepaid expenses

(8,789

)

(7,196

)

Inventory

97

32

Other assets

671

(3,757

)

Deferred contract costs

(68,041

)

(56,922

)

Accounts payable

1,659

4,491

Income taxes, net

236

(5,260

)

Accrued commissions and bonuses

(1,272

)

(4,403

)

Accrued payroll and vacation

11,609

12,853

Deferred revenue

11,051

9,143

Accrued expenses and other current liabilities

2,117

2,239

Net cash provided by operating activities

229,637

174,328

Cash flows from investing activities

Purchase of short-term investments from funds held for clients

(170,760

)

(217,858

)

Proceeds from maturities of short-term investments from funds held for clients

195,000

93,593

Purchases of intangible assets

(1,500

)

Purchases of property and equipment

(86,718

)

(73,502

)

Net cash used in investing activities

(63,978

)

(197,767

)

Cash flows from financing activities

Repurchases of common stock

(52,040

)

Withholding taxes paid related to net share settlements

(61,149

)

(26,099

)

Payments on long-term debt

(1,331

)

(1,331

)

Net change in client funds obligation

1,346,479

(140,421

)

Net cash provided by (used in) financing activities

1,283,999

(219,891

)

Increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents

1,449,658

(243,330

)

Cash, cash equivalents, restricted cash and restricted cash equivalents

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

1,585,275

1,641,854

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

$

3,034,933

$

1,398,524

Paycom Software, Inc.

Unaudited Consolidated Statements of Cash Flows, continued

(in thousands)

Nine Months Ended September 30,

2021

2020

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

Cash and cash equivalents

$

230,926

$

156,398

Restricted cash included in funds held for clients

2,804,007

1,242,126

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

$

3,034,933

$

1,398,524

Supplemental disclosures of cash flow information:

Non-cash investing and financing activities:

Purchases of property and equipment, accrued but not paid

$

5,994

$

2,707

Stock-based compensation for capitalized software

$

5,108

$

5,284

Right of use assets obtained in exchange for operating lease liabilities

$

4,439

$

9,323

Paycom Software, Inc.

Unaudited Reconciliations of GAAP to Non-GAAP Financial Measures

(in thousands, except per share amounts)

 

Three Months Ended September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

Net income to adjusted EBITDA:

Net income

$

30,379

$

27,482

$

147,273

$

119,086

Interest expense

19

Provision for income taxes

13,170

6,800

38,687

30,249

Depreciation and amortization

17,321

13,784

48,254

39,074

EBITDA

60,870

48,066

234,214

188,428

Non-cash stock-based compensation expense

28,991

19,502

76,364

56,531

Change in fair value of interest rate swap

(158

)

(88

)

(863

)

1,618

Adjusted EBITDA

$

89,703

$

67,480

$

309,715

$

246,577

Net income margin

11.9

%

14.0

%

19.1

%

19.2

%

Adjusted EBITDA margin

35.0

%

34.3

%

40.2

%

39.7

%

Three Months Ended September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

Net income to non-GAAP net income:

Net income

$

30,379

$

27,482

$

147,273

$

119,086

Non-cash stock-based compensation expense

28,991

19,502

76,364

56,531

Change in fair value of interest rate swap

(158

)

(88

)

(863

)

1,618

Income tax effect on non-GAAP adjustments

(5,626

)

(6,332

)

(26,798

)

(22,802

)

Non-GAAP net income

$

53,586

$

40,564

$

195,976

$

154,433

Weighted average shares outstanding:

Basic

57,935

57,603

57,843

57,609

Diluted

58,190

58,171

58,192

58,312

Earnings per share, basic

$

0.52

$

0.48

$

2.55

$

2.07

Earnings per share, diluted

$

0.52

$

0.47

$

2.53

$

2.04

Non-GAAP net income per share, basic

$

0.92

$

0.70

$

3.39

$

2.68

Non-GAAP net income per share, diluted

$

0.92

$

0.70

$

3.37

$

2.65

Three Months Ended September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

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

Earnings per share, basic

$

0.52

$

0.48

$

2.55

$

2.07

Non-cash stock-based compensation expense

0.50

0.34

1.32

0.98

Change in fair value of interest rate swap

(0.01

)

0.03

Income tax effect on non-GAAP adjustments

(0.10

)

(0.12

)

(0.47

)

(0.40

)

Non-GAAP net income per share, basic

$

0.92

$

0.70

$

3.39

$

2.68

Three Months Ended September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

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

Earnings per share, diluted

$

0.52

$

0.47

$

2.53

$

2.04

Non-cash stock-based compensation expense

0.50

0.34

1.31

0.97

Change in fair value of interest rate swap

(0.01

)

0.03

Income tax effect on non-GAAP adjustments

(0.10

)

(0.11

)

(0.46

)

(0.39

)

Non-GAAP net income per share, diluted

$

0.92

$

0.70

$

3.37

$

2.65

Three Months Ended September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

Adjusted gross profit:

Total revenues

$

256,194

$

196,532

$

770,538

$

620,487

Less: Total cost of revenues

(42,680

)

(30,912

)

(115,363

)

(90,516

)

Total gross profit

213,514

165,620

655,175

529,971

Plus: Non-cash stock-based compensation expense

1,256

1,227

3,381

4,158

Total adjusted gross profit

$

214,770

$

166,847

$

658,556

$

534,129

Gross margin

83.3

%

84.3

%

85.0

%

85.4

%

Adjusted gross margin

83.8

%

84.9

%

85.5

%

86.1

%

Three Months Ended September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

Adjusted sales and marketing expenses:

Sales and marketing expenses

$

69,745

$

62,146

$

200,485

$

173,228

Less: Non-cash stock-based compensation expense

(3,417

)

(3,829

)

(10,567

)

(10,795

)

Adjusted sales and marketing expenses

$

66,328

$

58,317

$

189,918

$

162,433

Total revenues

$

256,194

$

196,532

$

770,538

$

620,487

Sales and marketing expenses as a % of revenues

27.2

%

31.6

%

26.0

%

27.9

%

Adjusted sales and marketing expenses as a % of revenues

25.9

%

29.7

%

24.6

%

26.2

%

Three Months Ended September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

Adjusted total administrative expenses:

Total administrative expenses

$

170,209

$

131,584

$

470,234

$

380,095

Less: Non-cash stock-based compensation expense

(27,735

)

(18,275

)

(72,983

)

(52,373

)

Adjusted total administrative expenses

$

142,474

$

113,309

$

397,251

$

327,722

Total revenues

$

256,194

$

196,532

$

770,538

$

620,487

Total administrative expenses as a % of revenues

66.4

%

67.0

%

61.0

%

61.3

%

Adjusted total administrative expenses as a % of revenues

55.6

%

57.7

%

51.6

%

52.8

%

Three Months Ended September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

Adjusted research and development expenses:

Research and development expenses

$

31,077

$

21,772

$

84,012

$

65,171

Less: Non-cash stock-based compensation expense

(1,827

)

(2,115

)

(5,394

)

(7,270

)

Adjusted research and development expenses

$

29,250

$

19,657

$

78,618

$

57,901

Total revenues

$

256,194

$

196,532

$

770,538

$

620,487

Research and development expenses as a % of revenues

12.1

%

11.1

%

10.9

%

10.5

%

Adjusted research and development expenses as a % of revenues

11.4

%

10.0

%

10.2

%

9.3

%

Three Months Ended September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

Total research and development costs:

Capitalized research and development costs

$

13,157

$

11,727

$

39,160

$

32,448

Research and development expenses

31,077

21,772

84,012

65,171

Total research and development costs

$

44,234

$

33,499

$

123,172

$

97,619

Total revenues

$

256,194

$

196,532

$

770,538

$

620,487

Total research and development costs as a % of revenues

17.3

%

17.0

%

16.0

%

15.7

%

Adjusted total research and development costs:

Total research and development costs

$

44,234

$

33,499

$

123,172

$

97,619

Less: Capitalized non-cash stock-based compensation

(1,757

)

(1,566

)

(5,108

)

(5,284

)

Less: Non-cash stock-based compensation expense

(1,827

)

(2,115

)

(5,394

)

(7,270

)

Adjusted total research and development costs

$

40,650

$

29,818

$

112,670

$

85,065

Total revenues

$

256,194

$

196,532

$

770,538

$

620,487

Adjusted total research and development costs as a % of revenues

15.9

%

15.2

%

14.6

%

13.7

%

Paycom Software, Inc.

Unaudited Components of Non-Cash Stock-Based Compensation Expense

(in thousands)

 

Three Months Ended September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

Non-cash stock-based compensation expense:

Operating expenses

$

1,256

$

1,227

$

3,381

$

4,158

Sales and marketing

3,417

3,829

10,567

10,795

Research and development

1,827

2,115

5,394

7,270

General and administrative

22,491

12,331

57,022

34,308

Total non-cash stock-based compensation expense

$

28,991

$

19,502

$

76,364

$

56,531

Contacts:

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

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