HR software provider Paycom (NYSE:PAYC) reported revenue ahead of Wall Street’s expectations in Q1 CY2026, with sales up 7.8% year on year to $571.9 million. The company expects the full year’s revenue to be around $2.19 billion, close to analysts’ estimates. Its non-GAAP profit of $3.15 per share was 5.4% above analysts’ consensus estimates.
Is now the time to buy Paycom? Find out by accessing our full research report, it’s free.
Paycom (PAYC) Q1 CY2026 Highlights:
- Revenue: $571.9 million vs analyst estimates of $563.9 million (7.8% year-on-year growth, 1.4% beat)
- Adjusted EPS: $3.15 vs analyst estimates of $2.99 (5.4% beat)
- Adjusted Operating Income: $224.3 million vs analyst estimates of $215.8 million (39.2% margin, 3.9% beat)
- The company reconfirmed its revenue guidance for the full year of $2.19 billion at the midpoint
- EBITDA guidance for the full year is $960 million at the midpoint, in line with analyst expectations
- Operating Margin: 36.8%, up from 34.9% in the same quarter last year
- Free Cash Flow Margin: 31.9%, up from 22.5% in the previous quarter
- Billings: $575.8 million at quarter end, up 7.7% year on year
- Market Capitalization: $6.13 billion
Company Overview
Pioneering the concept of employees doing their own payroll with its "Beti" technology, Paycom (NYSE:PAYC) provides cloud-based human capital management software that helps businesses manage the entire employment lifecycle from recruitment to retirement.
Revenue Growth
Examining a company’s long-term performance can provide clues about its quality. Any business can have short-term success, but a top-tier one grows for years. Luckily, Paycom’s sales grew at a decent 19.2% compounded annual growth rate over the last five years. Its growth was slightly above the average software company and shows its offerings resonate with customers.
Long-term growth is the most important, but within software, a half-decade historical view may miss new innovations or demand cycles. Paycom’s recent performance shows its demand has slowed as its annualized revenue growth of 9.6% over the last two years was below its five-year trend. We’re wary when companies in the sector see decelerations in revenue growth, as it could signal changing consumer tastes aided by low switching costs. 
This quarter, Paycom reported year-on-year revenue growth of 7.8%, and its $571.9 million of revenue exceeded Wall Street’s estimates by 1.4%.
Looking ahead, sell-side analysts expect revenue to grow 6.8% over the next 12 months, a slight deceleration versus the last two years. This projection is underwhelming and indicates its products and services will see some demand headwinds.
ONE MORE THING: 3 Hidden Platforms Growing 3X Faster than Amazon, Google, and PayPal. Amazon, Google, and Meta all followed the same playbook: Dominate an ignored market. Build an unbeatable moat. Scale until you’re unstoppable.
These three platforms are running that exact playbook right now. The early investors in Amazon made fortunes. The early investors in these could do the same. Get All 3 Stocks Here for FREE.
Billings
Billings is a non-GAAP metric that is often called “cash revenue” because it shows how much money the company has collected from customers in a certain period. This is different from revenue, which must be recognized in pieces over the length of a contract.
Paycom’s billings came in at $575.8 million in Q1, and over the last four quarters, its growth was underwhelming as it averaged 9% year-on-year increases. This performance mirrored its total sales and suggests that increasing competition is causing challenges in acquiring/retaining customers. 
Customer Acquisition Efficiency
The customer acquisition cost (CAC) payback period measures the months a company needs to recoup the money spent on acquiring a new customer. This metric helps assess how quickly a business can break even on its sales and marketing investments.
Paycom is extremely efficient at acquiring new customers, and its CAC payback period checked in at 14.5 months this quarter. The company’s rapid recovery of its customer acquisition costs means it can attempt to spur growth by increasing its sales and marketing investments. 
Key Takeaways from Paycom’s Q1 Results
It was encouraging to see Paycom beat analysts’ EBITDA expectations this quarter. We were also happy its revenue narrowly outperformed Wall Street’s estimates. On the other hand, its full-year revenue guidance was in line and its billings fell slightly short of Wall Street’s estimates. Overall, this was a mixed quarter. The stock traded up 1.7% to $128.46 immediately after reporting.
Is Paycom an attractive investment opportunity right now? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here (it’s free).