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Paycom reported quarterly revenue of about 531 million dollars, a 10 percent increase that came in ahead of what analysts expected. The company earned $2.78 per share, easily topping the $2.38 estimate. These results show that the company is successfully moving past a period of slower growth by focusing on its automation tools, which help clients handle their own payroll tasks with less manual work.
Management also raised its forecast for the full year, suggesting that demand for its software remains steady despite a maturing market. For long-term owners, the key is that Paycom is maintaining high profit margins while it shifts its focus toward returning cash to shareholders through buybacks. As long as the company keeps its existing customers while making its platform more efficient to run, it can grow its earnings even if new sales growth stays in the single digits.
See the full quarter, and how our tracked metrics did
Source: 8-K filing
Paycom will pay a dividend of $0.375 per share on September 8 to shareholders who own the stock as of August 24. This is a routine payment that aligns with the company's recent shift toward returning more cash to its owners. While the dividend provides a small steady return, the much larger part of the company's plan to reward shareholders remains its aggressive program to buy back its own stock.
Source: Business Wire
Management has a habit of setting a bar they can clear, beating analyst profit estimates in seven of the last eight quarters.
| Expectation | |
|---|---|
| EPS | $2.80 |
| Revenue | $535M |