Key Highlights

  • Revenue expanded 10.2% to USD 543.8 million, and the recurring portion rose 11.3% to USD 519.3 million, which is 95.5% of sales.
  • Under GAAP, profit per diluted share reached USD 2.99 compared with USD 1.96 a year before, and the non-GAAP tally was USD 3.37 per share based on USD 150.0 million of earnings.
  • Adjusted EBITDA hit USD 268.1 million, close to 49% of sales, versus USD 194.3 million, which equals growth of about 38% (calculated).
  • Cash fell to USD 193.9 million by September 30, 2026 from USD 370.0 million at the end of 2025, with USD 16.7 million paid out in dividends.

Profit Growth Runs Ahead of Sales at Paycom Software (NYSE:PAYC)

Paycom Software (NYSE:PAYC) published third-quarter 2026 figures on November 4, 2026. Top-line sales reached USD 543.8 million, a 10.2% advance, but bottom-line income grew at a steeper clip, rising from USD 110.7 million to USD 133.2 million, roughly a quarter of sales. Under GAAP, diluted Earnings per share jumped from USD 1.96 to USD 2.99, about 53% higher (calculated). The firm sells cloud software that handles HR and Payroll functions, and it markets an artificial intelligence engine under the IWant name. Founder and CEO Chad Richison attributed the period's performance to customers benefiting from automated decision-making built into the product.

Non-GAAP Results Pull Further Ahead and the Margin Puzzle

The adjusted measures widened the gap even more. Adjusted net profit, which strips out non-cash Stock Compensation after tax, came to USD 150.0 million, or USD 3.37 per diluted share, against USD 109.6 million, or USD 1.94, last year. That change equals about 74% (calculated), compared with about 53% on the GAAP line. Taken together, the adjusted figures show a wider improvement than the GAAP figures alone. Adjusted EBITDA of USD 268.1 million produced a margin close to 49%. The filing does not explain what lifted the margin beyond sales growth, so that Factor remains unidentified.

Higher Annual Targets, Shrinking Cash and the Quarterly Distribution

Management nudged the year's projections higher, now expecting Revenue between USD 2.213 billion and USD 2.218 billion, roughly 8% growth, with recurring and other revenue increasing near 9%. Investment income on client balances is forecast at around USD 107.0 million. Adjusted EBITDA is planned at USD 1.069 billion to USD 1.079 billion, a 48.5% midpoint margin. Earlier ranges were absent from the release, which makes the magnitude of the revision impossible to pin down. The guidance figures are company projections as presented in the release and are not independently verified here. Cash and equivalents declined roughly USD 176.1 million (calculated) since December 31, 2025, and USD 16.7 million went to dividends this quarter, while other cash uses went undisclosed.

Where Things Stand

Sustaining a 49% adjusted EBITDA margin requires continued growth and disciplined spending. Paycom Software (NYSE:PAYC) delivered 10.2% sales growth and a steeper profit rise in the third quarter, then raised guidance that implies a 48.5% midpoint margin for the year. The concern is tempo: forecast full-year growth near 8% trails the quarterly pace, client-fund interest matters meaningfully to results, and cash fell. Investors should examine the next quarterly release and check whether margins land near the guided midpoint. Those projections should be weighed against the reported quarter rather than treated as certainties.