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Dec 31, 2020
Paycom Q4 2020 Earnings Report
Paycom reported a revenue increase of 14.2% and adjusted EBITDA of $84.2 million.
Key Takeaways
Paycom's Q4 2020 results showed strong revenue growth, driven by its differentiated employee usage strategy. The company is well-positioned to reach $1 billion in revenue in 2021.
Total revenues increased by 14.2% compared to the same period last year.
Recurring revenues increased by 14.0% and constituted 98.1% of total revenues.
GAAP Net Income was $24.4 million, or $0.42 per diluted share.
Adjusted EBITDA was $84.2 million, compared to $78.6 million in the same period last year.
Paycom
Paycom
Paycom Revenue by Segment
Revenue by Segment
Recurring and Other Revenues Revenue
CapyFin.com Forward Guidance
Paycom provided financial guidance for the quarter ending March 31, 2021 and the year ending December 31, 2021.
Positive Outlook
- Total Revenues in the range of $270 million to $272 million for the quarter ending March 31, 2021.
- Adjusted EBITDA in the range of $126 million to $128 million for the quarter ending March 31, 2021.
- Total Revenues in the range of $1.009 billion to $1.011 billion for the year ending December 31, 2021.
- Adjusted EBITDA in the range of $396 million to $398 million for the year ending December 31, 2021.
- Targeting $1 billion in revenue for 2021.
Challenges Ahead
- Headcount reductions across client base negatively impacted recurring revenue.
- Clients electing to defer payment of their share of Social Security taxes under the CARES Act resulted in nominal growth in average funds held for clients balance.
- Significantly lower average interest rates in 2020 had a negative effect on interest earned on funds held for clients.
- The full impact of the COVID-19 crisis may continue to have on business and results of operations is not possible to estimate at this time.
- Recurring revenue in future periods will continue to be negatively impacted by headcount reductions until employment levels among client base at the onset of the pandemic return to pre-pandemic levels.