Paycom Software, Inc. (PAYC) Business Profile

What it does

Paycom sells cloud-based human capital management software, a set of tools businesses use to manage employees from recruiting through retirement. Its applications cover payroll, hiring, employee records, benefits, performance, scheduling, and time and labor management. Paycom targets organizations with 50 to 10,000 or more employees.

The software is delivered as a service over the internet rather than installed and maintained by each client. Its applications share a single database of employee information. For example, a change to an employee’s record can be available across the relevant applications without the client entering it into multiple systems.

Payroll is the foundation of the platform: clients must use it to access Paycom’s other applications. Employees can use the software to view pay information, update personal details, manage schedules and request time off. Beti guides employees through reviewing and approving their paychecks before payroll is submitted. IWant lets users seek employee information without navigating through the software.

Paycom also provides implementation help and assigns clients service specialists. It sells directly through its own sales force and owns and maintains the infrastructure used to host its software. The company was founded in 1998 and is headquartered in Oklahoma City. Chad Richison is its chief executive officer.

How it makes money

Paycom operates as one reporting segment. It has historically generated most of its revenue from payroll applications, although its offering also includes hiring, talent management, HR, and time and labor tools. The company often sells applications in groups for a single price, so it generally does not separately track revenue for each non-payroll application.

Substantially all revenue comes from fixed charges per billing period, sometimes combined with a fee for each employee or transaction processed. The billing period generally follows the client’s payroll schedule, although Paycom expects more clients to be billed monthly for certain applications and services. Pricing also depends on the number of applications a client uses. Client employee counts and payroll timing can therefore affect revenue.

Recurring revenue was $1.9 billion in FY2025, representing 93.2% of revenue. Recurring charges include application fees, as well as fees associated with payroll forms, checks, reports, background checks and verification services. Paycom also earns interest on funds held for clients and revenue from implementation and other services. It does not charge clients separately for IWant or for tokens used on its system.

Total revenue was $544 million in the third quarter of 2026. Revenue is seasonal: Paycom generally expects the first and fourth quarters to be higher because of payroll and health-care form processing early in the year and unscheduled payroll runs, such as bonuses, late in the year.

Customers and how it sells

Paycom serves businesses across industries, from small employers to organizations with many thousands of employees. Its target clients have 50 to 10,000 or more employees. It had approximately 39,200 clients at the end of 2025; that count can include separate accounts affiliated with the same parent organization. Annual revenue retention was 91% for 2025.

The company sells directly through sales offices across the United States. Client relations representatives also introduce additional applications to existing clients, and each client is assigned a specialist within a dedicated service team. Paycom had sales offices in 41 of the 50 largest U.S. metropolitan statistical areas, based on July 2024 estimates.

Global HCM applications are available in 15 languages and dialects and accessible in more than 190 countries. Paycom offers native payroll in Canada, Mexico, the United Kingdom and Ireland, in addition to its U.S. business. Its U.S.-based sales teams target global organizations with a U.S. presence, and the company has added a large enterprise client in Mexico.

Suppliers and costs

Paycom develops its applications in-house and owns and maintains the infrastructure that hosts its software. Its research and development team is based in Oklahoma and Texas. The company’s business depends on computing and communications infrastructure, including data centers and telecommunications services; outages from third-party telecommunications providers are among the interruption risks it identifies.

Costs include sales personnel, system development and programming, general and administrative expenses, salaries and benefits, stock-based compensation, and facilities. Facilities include data centers, operations facilities and sales office leases. Paycom has also invested in data centers, AI technology and GPUs.

Automation of Paycom’s own business systems contributed to lower headcount and a decrease in certain employee-related expenses in 2025. The company expected some employee-related expenses to be lower in 2026 than in 2025 because of that reduced headcount. Paycom also expects to continue spending on its data centers.

Competitive position

Paycom competes in a fragmented market for payroll and HR software. Named competitors include Automatic Data Processing, Dayforce, Intuit, Oracle, Paychex, Paylocity, SAP, ServiceNow, Ultimate Kronos Group and Workday. Their offerings can overlap with some or all of Paycom’s application categories, and most offer cloud-based solutions.

Competition turns on service responsiveness, product quality and reputation, breadth of service, applications and price. Price tends to matter most to smaller businesses, while features and customization carry more weight for larger businesses. Implementation experience matters across company sizes. Paycom estimates that it serves approximately 5% of its addressable market.

Our reading: The single database is a meaningful source of differentiation because it connects payroll and HR applications without requiring clients to maintain multiple databases, though competitors also sell broad cloud offerings. Our reading: Employee use and dedicated service can support retention by embedding the software in clients’ routines and providing ongoing help; the 2025 revenue retention rate was 91%. Our reading: These advantages face limits because rivals can compete on pricing, features, integration and their own client-retention strategies.

Growth opportunities

Paycom’s growth strategy includes adding sales capacity in existing markets, opening offices in new markets, winning larger employers and selling more applications to current clients. It also plans to expand its international offering and target global organizations with a U.S. presence. Paycom estimates that it serves approximately 5% of its addressable market.

The company sees an opportunity to increase revenue from existing clients as they adopt additional applications and use its global payroll capabilities. It also expects to add native payroll in more countries. Larger organizations, including those with international employees, are a target because they can generate more revenue per client.

Paycom continues to build AI and automation into its platform. Its asset management product helps clients track, recover and deploy equipment and other assets; the company says it is a billable offering. Paycom also had products in testing that were already used by select clients.

For 2026, Paycom expects total revenue between $2.213 billion and $2.218 billion and recurring and other revenue to rise nearly 9% year over year. It was reported on 4 November 2026 that the consensus expected revenue to grow 6.30% over the next 12 months.

Structural risks

• Security and availability: A breach or unauthorized access to sensitive data could cause clients to reduce or stop using Paycom, harm its ability to attract clients and create liabilities. Data-center or communications interruptions could also disrupt its service.
• Competition: Paycom expects intense competition as technologies and new entrants emerge and aggressive pricing and retention strategies persist. Rivals may offer different integrations, bundles or contract terms, or devote more resources to development and sales.
• Client employment: Some fees depend on client employee counts. Changes in the labor market and pressures affecting clients’ hiring can therefore affect Paycom’s revenue.
• Regulation and international expansion: Paycom faces differing and changing privacy, employment, tax and other rules across jurisdictions. Expansion abroad also brings risks involving approvals, local competition and managing foreign operations.
• Leadership: Paycom’s success and strategy depend in part on founder, chief executive and chairman Chad Richison and other key executives and employees.

Leadership

Founder Chad Richison is chief executive officer and chairman of the board.

Bottom line

Our reading

Paycom is a recurring-revenue software business built around payroll, with additional HR applications sharing one employee database. Our reading: Its opportunity rests on retaining clients, adding applications and reaching larger or international employers, while its exposure includes competitive pricing, client employment levels and the security and availability of a system handling sensitive information.