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Paycom Software, Inc. Reports Third Quarter 2016 Results

OKLAHOMA CITY--(BUSINESS WIRE)--Paycom Software, Inc. (“Paycom”) (NYSE: PAYC), a leading provider of comprehensive, cloud-based human capital management software, today announced its financial results for the quarter ended September 30, 2016.

“We continue to drive value for our clients – with our best-in-class, single-database payroll and human capital management solution – and also for our shareholders by repurchasing over 525,000 shares over the past five months under our stock repurchase plan.”

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“We are pleased to once again report very strong revenue and adjusted EBITDA growth, as the Paycom solution continues to remain top-of-mind with C-suite and HR leaders across the country,” said Chad Richison, Paycom founder and CEO. “We continue to drive value for our clients – with our best-in-class, single-database payroll and human capital management solution – and also for our shareholders by repurchasing over 525,000 shares over the past five months under our stock repurchase plan.”

Financial Highlights for the Third Quarter of 2016

Total Revenues of $77.3 million represented a 40% increase compared to total revenues of $55.3 million in the same period last year. Recurring revenues of $75.9 million increased 40% from the comparable prior year period, and constituted 98% of total revenues.

GAAP Net Income was $6.2 million, or $0.10 per diluted share, compared to GAAP net income of $3.8 million, or $0.07 per diluted share, in the same period last year.

Adjusted EBITDA1 was $18.2 million, compared to $10.8 million in the same period last year.

Non-GAAP Net Income1 was $9.0 million, or $0.15 per diluted share, compared to $4.7 million, or $0.08 per diluted share, in the same period last year.

Cash and Cash Equivalents were $74.5 million as of September 30, 2016.

Total Debt was $30.1 million as of September 30, 2016. This debt consisted solely of debt on our corporate headquarters.

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 non-GAAP financial measures.

Financial Outlook

Paycom provides the following expected financial guidance for the quarter and year ending December 31, 2016:

Quarter Ending December 31, 2016

Total Revenues in the range of $85 million to $87 million.

Adjusted EBITDA in the range of $14 million to $16 million.

Year Ending December 31, 2016

Total Revenues in the range of $326.5 million to $328.5 million.

Adjusted EBITDA in the range of $88 million to $90 million.

We have not reconciled the Adjusted EBITDA ranges for the quarter or year ending December 31, 2016 to net income 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, depreciation and amortization, interest expense, taxes, non-cash stock-based compensation expense and other items. Accordingly, a reconciliation of these Adjusted EBITDA ranges to net income is not available at this time 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 consider and have included certain non-GAAP financial measures in this press release, including Adjusted EBITDA and non-GAAP net income. We use Adjusted EBITDA and non-GAAP net income as supplemental measures to review and assess our performance before gains, losses or other changes that our management considers to be outside of our core business operating results 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 and certain transaction expenses that are not core to our operations; and (ii) non-GAAP net income as net income plus non-cash stock-based compensation expense and certain transaction expenses that are not core to our operations, each of which is adjusted for the effect of income taxes. Adjusted EBITDA and non-GAAP net income are metrics that provide investors with greater transparency to the information used by our management in its financial and operational decision-making. We believe these metrics are useful to investors because they provide period-to-period comparisons of the results of our continuing operations, and facilitate comparison with other 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.

Adjusted EBITDA and non-GAAP net income are not measures of financial performance under GAAP and should not be considered a substitute for net income, which we consider to be the most directly comparable GAAP measure. Adjusted EBITDA and non-GAAP net income have limitations as analytical tools, and when assessing our operating performance, you should not consider Adjusted EBITDA or non-GAAP net income in isolation, or as a substitute for net income or other consolidated statements of income data prepared in accordance with GAAP. Adjusted EBITDA and non-GAAP net income may not be comparable to similar 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 1, 2016, at 5:00 p.m. Eastern time to discuss its financial results. To access this call, dial (877) 201-0168 (domestic) or (647) 788-4901 (international) and enter conference ID 83692288. 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 (855) 859-2056 (domestic) or (404) 537-3406 (international) until November 8, 2016. The replay passcode is 83692288.

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 is based on a core system of...


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