Q3 2023 Earnings Summary
Reported on Oct 31, 2023 (After Market Close)
Pre-Earnings Price$244.97Last close (Oct 31, 2023)
Post-Earnings Price$152.55Open (Nov 1, 2023)
Price Change
$-92.42(-37.73%)
- Strong Demand and Client Onboarding: Paycom continues to see strong demand in the SMB and mid-market segments, with ongoing client onboarding and delivery of significant value to clients.
- Expansion into International Markets: Paycom is expanding its global HCM product, now enabling employees in Canada and Mexico to use its payroll solutions, indicating significant growth opportunities through international expansion.
- Focus on Innovation with Beti Platform: Paycom is leaning more into its innovative Beti platform, which is revolutionizing payroll by enabling employees to do their own payroll, driving long-term shareholder value and strengthening the company's competitive position.
- Paycom significantly lowered its revenue growth guidance for 2024 to between 10% and 12%, down from approximately 22% growth in 2023, indicating potential growth challenges ahead.
- The adoption of Beti, Paycom's do-it-yourself payroll system, is cannibalizing service revenues and unscheduled payroll runs, as clients experience "perfect payrolls" and eliminate errors that were previously billable items; additionally, cross-selling revenues were lower due to this shift. ,
- Macro headwinds from inflation are impacting preemployment services, and the company expects these challenges to continue into the fourth quarter and into 2024, potentially affecting revenues further.
Research analysts covering Paycom Software.