Paycom beats earnings estimates
Oklahoma City-based Pay com Software Inc. posted improved earnings on Tuesday, beating estimates from both itself and analysts.
Net income for the software company surged to $48.8 million, or 83 cents a share, in the second quarter, up from $35.7 million, or 61 cents a share in the second quarter of 2018. A provider of human capital management software and service, Paycom consistently has grown to become a leading company in the industry.
Paycom also beat its own revenue estimate with collections of $169 million before expenses, up from almost $129 million one year ago.
The earnings report was released after trading ended Tuesday. The stock price closed at $228.62 per share but quickly topped $241 in afterhours trading.
Adjusted for one-time items, Pay com reported a net income of $43.7 million, or 75 cents a share, up from $ 34.8 million, or 59 cents a share, in the year-ago quarter. Adjusted earnings before interest, taxes, depreciation and amortization ( EBITDA) improved to $69.4 million, up from $53.5 million in the second quarter of 2018.
Much of the increased profits were from efforts by the company's sales force, which now has 50 offices throughout the United States, with the latest addition in New Orleans.
“The second-quarter results came in strong thanks to robust new business adds, and we remain well-positioned for another excellent full year,” CEO Chad Rich is on said. “Employee usage of HCM
technology is the future of our i ndustry, and our clients and their employees are embracing the digital transformation faster than ever.”
Richison also announced Tuesday the company will release a new tool called Ask Here, which gives clients' employees an direct line of communication to human resource managers and appropriate staff. One goal of the Ask Here tool, he said, is to reduce emails, phone calls and foot traffic by encouraging workers to use the online resource.
The feature will come at no added cost to Pay com clients. In a call with analysts Tuesday, Richison said Ask Here will help employees use the software correctly. Rich is on praised another module announced last quarter, Direct Data Exchange, which helps businesses collect quantifiable data on how employees use Paycom software.
“Clients choose the pace of their digital transformation, and Paycom can go as fast or as slow as they want,” Richison said. “However, we are seeing clients embrace the transformation at a faster pace today than a year ago.”
The strong quarter led the company to raise its end-ofyear guidance. Total annual revenues this year are now expected to be between $728 million and $730 million. The year-end adjusted EBITDA estimate increased to a range of $306 million to $308 million.
Paycom expects the next quarterly earnings report to show revenues of at least $170 million with an EBITDA of at least $61 million.