[February 06, 2018] |
|
Paycom Software, Inc. Reports Fourth Quarter and Year-End 2017 Results
Paycom Software, Inc. (NYSE: PAYC):
Fourth Quarter Revenues of $114.0 million, up 30% from comparable
prior year period Fourth Quarter GAAP Net Income of $12.9
million, or $0.22 per diluted share, up 49% from comparable prior year
period Fourth Quarter Adjusted EBITDA of $31.8 million, up
54% from comparable prior year period Fourth Quarter
non-GAAP Net Income of $16.8 million, or $0.29 per diluted share
Full Year 2017 Revenues of $433.0 million, up 32% from comparable
prior year period Full Year 2017 GAAP Net Income of $66.8
million, or $1.13 per diluted share, up 52% from comparable prior year
period Full Year 2017 Adjusted EBITDA of $137.0 million, up
45% from comparable prior year period Full Year 2017
non-GAAP Net Income of $76.7 million, or $1.30 per diluted share
Paycom Software, Inc. ("Paycom") (NYSE: PAYC), a leading provider of
comprehensive, cloud-based human capital management software, today
announced its financial results for the quarter and full year ended
December 31, 2017.
"I'm proud of our accomplishments in 2017 as we achieved our goals and
achieved 32% revenue growth for the year," said Paycom's founder and
CEO, Chad Richison. "Our profitable business model also allowed us to
continue to return value to our stockholders, as we repurchased over 1.2
million shares in 2017."
Financial Highlights for the Fourth Quarter of
2017
Total Revenues of $114.0 million represented a 30% increase
compared to total revenues of $87.8 million in the same period last
year. Recurring revenues of $111.7 million increased 29% from the
comparable prior year period, and constituted 98% of total revenues.
GAAP Net Income was $12.9 million, or $0.22 per diluted share,
compared to GAAP net income of $8.6 million, or $0.15 per diluted share,
in the same period last year.
Adjusted EBITDA1 was $31.8 million, compared to
$20.7 million in the same period last year.
Non-GAAP Net Income1 was $16.8 million,
or $0.29 per diluted share, compared to $10.8 million, or $0.18 per
diluted share, in the same period last year.
Cash and Cash Equivalents were $46.1 million as of December 31,
2017.
Total Debt was $35.3 million as of December 31, 2017.
Financial Highlights for the Full Year 2017
Total Revenues of $433.0 million represented a 32% increase
compared to total revenues of $329.1 million in the same period last
year. Recurring revenues of $425.4 million increased 31% from the
comparable prior year period, and constituted 98% of total revenues.
GAAP Net Income was $66.8 million, or $1.13 per diluted share,
compared to GAAP net income of $43.8 million, or $0.74 per diluted
share, in the same period last year.
Adjusted EBITDA1 was $137.0 million, compared
to $94.5 million in the same period last year.
Non-GAAP Net Income1 was $76.7 million,
or $1.30 per diluted share, compared to $51.6 million, or $0.87 per
diluted share, in the same period last year.
1 Adjusted EBITDA and non-GAAP net income are non-GAAP
financial measures. Please see the discussion below under the heading
"Use of Non-GAAP Financial Information" and the reconciliations at the
end of this release for additional information concerning these non-GAAP
financial measures.
Financial Outlook
Paycom provides the following expected financial guidance for the
quarter ending March 31, 2018 and the year ending December 31, 2018.
Please note that this guidance reflects the January 1, 2018 adoption of
ASU No. 2014-09, Topic 606:
Quarter Ending March 31, 2018
Total Revenues in the range of $150 million to $152 million.
Adjusted EBITDA in the range of $74 million to $76 million.
Year Ending December 31, 2018
Total Revenues in the range of $541 million to $543 million.
Adjusted EBITDA in the range of $213 million to $215 million.
We have not reconciled the Adjusted EBITDA ranges for the quarter ending
March 31, 2018 or the year ending December 31, 2018 to net income
because applicable information for future periods, on which this
reconciliation would be based, is not readily available due to
uncertainty regarding, and the potential variability of, depreciation
and amortization, interest expense, taxes, non-cash stock-based
compensation expense, change in fair value of our interest rate swap and
other items. Accordingly, a reconciliation of these Adjusted EBITDA
ranges to net income is not available at this time without unreasonable
effort.
Use of Non-GAAP Financial Information
To supplement our financial information presented in accordance with
generally accepted accounting principles in the United States ("GAAP"),
we consider and have included certain non-GAAP financial measures in
this press release, including Adjusted EBITDA and non-GAAP net income.
Management uses Adjusted EBITDA and non-GAAP net income as supplemental
measures to review and assess the performance of our core business
operations and for planning purposes. We define (i) Adjusted EBITDA as
net income plus interest expense, taxes, depreciation and amortization,
non-cash stock-based compensation expense, certain transaction expenses
that are not core to our operations (if any), loss on early repayment of
debt, and the change in fair value of our interest rate swap and
(ii) non-GAAP net income as net income plus non-cash stock-based
compensation expense, certain transaction expenses that are not core to
our operations (if any), loss on early repayment of debt and the change
in fair value of our interest rate swap, all of which are adjusted for
the effect of income taxes. Adjusted EBITDA and non-GAAP net income are
metrics that provide investors with greater transparency to the
information used by management in its financial and operational
decision-making. We believe these metrics are useful to investors
because they facilitate comparisons of our core business operations
across periods on a consistent basis, as well as comparisons with the
results of peer companies, many of which use similar non-GAAP financial
measures to supplement results under GAAP. In addition, Adjusted EBITDA
is a measure that provides useful information to management about the
amount of cash available for reinvestment in our business, repurchasing
common stock and other purposes. Management believes that the non-GAAP
measures presented in this press release, when viewed in combination
with our results prepared in accordance with GAAP, provide a more
complete understanding of the factors and trends affecting our business
and performance.
Adjusted EBITDA and non-GAAP net income are not measures of financial
performance under GAAP and should not be considered a substitute for net
income, which we consider to be the most directly comparable GAAP
measure. Adjusted EBITDA and non-GAAP net income have limitations as
analytical tools, and when assessing our operating performance, you
should not consider Adjusted EBITDA or non-GAAP net income in isolation,
or as a substitute for net income or other consolidated statements of
income data prepared in accordance with GAAP. Adjusted EBITDA and
non-GAAP net income may not be comparable to similar titled measures of
other companies and other companies may not calculate such measures in
the same manner as we do.
Conference Call Details:
In conjunction with this announcement, Paycom will host a conference
call today, Feb. 6, 2018, at 5:00 p.m. Eastern time to discuss its
financial results. To access this call, dial (866) 362-4443 (domestic)
or (412) 317-5229 (international) and announce Paycom as the conference
name to the operator. A live webcast as well as the replay of the
conference call will be available on the Investor Relations page of
Paycom's website at investors.paycom.com.
A replay of this conference call can also be accessed by dialing (877)
344-7529 (domestic) or (412) 317-0088 (international) until Feb. 13,
2018. The replay passcode is 10115660.
About Paycom
As a leader in payroll and HR technology, Oklahoma City-based Paycom
redefines the human capital management industry by allowing companies to
effectively navigate a rapidly changing business environment. Its
cloud-based software solution is based on a core system of record
maintained in a single database for all human capital management
functions, providing the functionality that businesses need to manage
the complete employment lifecycle, from recruitment to retirement.
Paycom has the ability to serve businesses of all sizes and in every
industry. As one of the leading human capital management providers,
Paycom serves clients in all 50 states from offices across the country.
Forward-Looking Statements
Certain statements in this press release are, and certain statements on
the related teleconference call may be, forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of
1995. Forward-looking statements are any statements that refer to
Paycom's estimated or anticipated results, other non-historical facts or
future events and include, but are not limited to, statements regarding
our business strategy; anticipated future operating results and
operating expenses, cash flows, capital resources, dividends and
liquidity; trends, opportunities and risks affecting our business,
industry and financial results; future expansion or growth plans and
potential for future growth; our ability to attract new clients to
purchase our solution; our ability to retain clients and induce them to
purchase additional applications; our ability to accurately forecast
future revenues and appropriately plan our expenses; market acceptance
of our solution and applications; our expectations regarding future
revenues generated by certain applications; the impact of future
regulatory, judicial, or legislative changes; how certain factors
affecting our performance correlate to improvement or deterioration in
the labor market; our plan to open additional sales offices and our
ability to effectively execute such plan; the sufficiency of our
existing cash and cash equivalents to meet our working capital and
capital expenditure needs over the next 12 months; our ability to expand
our corporate headquarters within an expected timeframe; our plans
regarding our capital expenditures and investment activity as our
business grows, including with respect to research and development; the
expected impact of the Tax Cuts and Jobs Act of 2017 and our expected
income tax rate for future periods; our plans to purchase shares of our
common stock through a stock repurchase plan; and the impact on our
consolidated financial statements of new accounting pronouncements. In
addition, forward-looking statements also consist of statements
involving trend analyses and statements including such words as
"anticipate," "believe," "could," "expect," "may," "might," "plan,"
"possible," "potential," "project," "should," "would," and similar
expressions or the negative of such terms or other comparable
terminology. These forward-looking statements speak only as of the date
hereof and are subject to business and economic risks. As such, our
actual results could differ materially from those set forth in the
forward-looking statements as a result of the factors discussed in our
filings with the Securities and Exchange Commission, including but not
limited to those discussed in our Annual Report on Form 10-K for the
year ended December 31, 2016. We do not undertake any obligation to
update or revise the forward-looking statements to reflect events or
circumstances that exist after the date on which such statements were
made, except to the extent required by law.
|
|
Paycom Software, Inc.
|
Consolidated Balance Sheets
|
(in thousands, except share amounts)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
|
|
2017
|
|
|
|
|
2016
|
|
Assets
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
46,077
|
|
|
|
$
|
60,158
|
|
Accounts receivable
|
|
|
|
1,576
|
|
|
|
|
1,339
|
|
Prepaid expenses
|
|
|
|
4,982
|
|
|
|
|
4,475
|
|
Inventory
|
|
|
|
979
|
|
|
|
|
675
|
|
Income tax receivable
|
|
|
|
7,047
|
|
|
|
|
692
|
|
Current assets before funds held for clients
|
|
|
|
60,661
|
|
|
|
|
67,339
|
|
Funds held for clients
|
|
|
|
1,089,201
|
|
|
|
|
858,244
|
|
Total current assets
|
|
|
|
1,149,862
|
|
|
|
|
925,583
|
|
Property and equipment, net
|
|
|
|
147,705
|
|
|
|
|
96,848
|
|
Deposits and other assets
|
|
|
|
1,456
|
|
|
|
|
1,215
|
|
Goodwill
|
|
|
|
51,889
|
|
|
|
|
51,889
|
|
Intangible assets, net
|
|
|
|
958
|
|
|
|
|
1,871
|
|
Deferred income tax assets, net
|
|
|
|
3,294
|
|
|
|
|
1,207
|
|
Total assets
|
|
|
$
|
1,355,164
|
|
|
|
$
|
1,078,613
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
Accounts payable
|
|
|
$
|
6,490
|
|
|
|
$
|
3,737
|
|
Accrued commissions and bonuses
|
|
|
|
9,585
|
|
|
|
|
8,003
|
|
Accrued payroll and vacation
|
|
|
|
7,015
|
|
|
|
|
4,769
|
|
Deferred revenue
|
|
|
|
6,982
|
|
|
|
|
5,230
|
|
Current portion of long-term debt
|
|
|
|
888
|
|
|
|
|
1,113
|
|
Accrued expenses and other current liabilities
|
|
|
|
19,991
|
|
|
|
|
17,798
|
|
Current liabilities before client funds obligation
|
|
|
|
50,951
|
|
|
|
|
40,650
|
|
Client funds obligation
|
|
|
|
1,089,201
|
|
|
|
|
858,244
|
|
Total current liabilities
|
|
|
|
1,140,152
|
|
|
|
|
898,894
|
|
Long-term derivative liability
|
|
|
|
554
|
|
|
|
|
-
|
|
Long-term deferred revenue
|
|
|
|
44,642
|
|
|
|
|
34,481
|
|
Net long-term debt, less current portion
|
|
|
|
34,414
|
|
|
|
|
28,711
|
|
Total long-term liabilities
|
|
|
|
79,610
|
|
|
|
|
63,192
|
|
Commitments and contingencies
|
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
|
|
Common stock, $0.01 par value (100,000,000 shares authorized,
60,149,411 and 58,453,283 shares issued at December 31, 2017 and
2016, respectively; 57,788,573 and 57,331,022 shares outstanding at
December 31, 2017 and 2016, respectively)
|
|
|
|
601
|
|
|
|
|
585
|
|
Additional paid in capital
|
|
|
|
137,234
|
|
|
|
|
95,452
|
|
Retained earnings
|
|
|
|
137,255
|
|
|
|
|
70,448
|
|
Treasury stock, at cost (2,360,838 and 1,122,261 shares at December
31, 2017 and 2016, respectively)
|
|
|
|
(139,688
|
)
|
|
|
|
(49,958
|
)
|
Total stockholders' equity
|
|
|
|
135,402
|
|
|
|
|
116,527
|
|
Total liabilities and stockholders' equity
|
|
|
$
|
1,355,164
|
|
|
|
$
|
1,078,613
|
|
|
|
Paycom Software, Inc.
|
Consolidated Statements of Income
|
(in thousands, except per share and share amounts)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
Year ended
|
|
|
|
December 31, 2017
|
|
|
December 31, 2016
|
|
|
December 31, 2017
|
|
|
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
Recurring
|
|
|
$
|
111,661
|
|
|
|
$
|
86,295
|
|
|
|
$
|
425,424
|
|
|
|
$
|
323,548
|
|
Implementation and other
|
|
|
|
2,364
|
|
|
|
|
1,515
|
|
|
|
|
7,623
|
|
|
|
|
5,593
|
|
Total revenues
|
|
|
|
114,025
|
|
|
|
|
87,810
|
|
|
|
|
433,047
|
|
|
|
|
329,141
|
|
Cost of revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
16,419
|
|
|
|
|
13,777
|
|
|
|
|
62,438
|
|
|
|
|
48,268
|
|
Depreciation and amortization
|
|
|
|
2,761
|
|
|
|
|
1,705
|
|
|
|
|
9,590
|
|
|
|
|
5,798
|
|
Total cost of revenues
|
|
|
|
19,180
|
|
|
|
|
15,482
|
|
|
|
|
72,028
|
|
|
|
|
54,066
|
|
Administrative expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
|
|
|
|
44,052
|
|
|
|
|
36,556
|
|
|
|
|
150,512
|
|
|
|
|
119,258
|
|
Research and development
|
|
|
|
7,426
|
|
|
|
|
6,672
|
|
|
|
|
30,430
|
|
|
|
|
20,966
|
|
General and administrative
|
|
|
|
21,197
|
|
|
|
|
14,163
|
|
|
|
|
91,647
|
|
|
|
|
69,046
|
|
Depreciation and amortization
|
|
|
|
2,736
|
|
|
|
|
2,256
|
|
|
|
|
9,805
|
|
|
|
|
7,834
|
|
Total administrative expenses
|
|
|
|
75,411
|
|
|
|
|
59,647
|
|
|
|
|
282,394
|
|
|
|
|
217,104
|
|
Total operating expenses
|
|
|
|
94,591
|
|
|
|
|
75,129
|
|
|
|
|
354,422
|
|
|
|
|
271,170
|
|
Operating income
|
|
|
|
19,434
|
|
|
|
|
12,681
|
|
|
|
|
78,625
|
|
|
|
|
57,971
|
|
Interest expense
|
|
|
|
(153
|
)
|
|
|
|
(303
|
)
|
|
|
|
(911
|
)
|
|
|
|
(1,036
|
)
|
Other income, net
|
|
|
|
(1,429
|
)
|
|
|
|
371
|
|
|
|
|
(1,067
|
)
|
|
|
|
308
|
|
Income before income taxes
|
|
|
|
17,852
|
|
|
|
|
12,749
|
|
|
|
|
76,647
|
|
|
|
|
57,243
|
|
Provision for income taxes
|
|
|
|
4,947
|
|
|
|
|
4,116
|
|
|
|
|
9,840
|
|
|
|
|
13,403
|
|
Net income
|
|
|
$
|
12,905
|
|
|
|
$
|
8,633
|
|
|
|
$
|
66,807
|
|
|
|
$
|
43,840
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share, basic
|
|
|
$
|
0.22
|
|
|
|
$
|
0.15
|
|
|
|
$
|
1.15
|
|
|
|
$
|
0.76
|
|
Earnings per share, diluted
|
|
|
$
|
0.22
|
|
|
|
$
|
0.15
|
|
|
|
$
|
1.13
|
|
|
|
$
|
0.74
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
58,100,141
|
|
|
|
|
57,652,531
|
|
|
|
|
57,839,155
|
|
|
|
|
57,550,204
|
|
Diluted
|
|
|
|
58,850,271
|
|
|
|
|
58,882,996
|
|
|
|
|
58,790,019
|
|
|
|
|
58,968,099
|
|
|
|
Paycom Software, Inc.
|
Consolidated Statements of Cash Flows
|
(in thousands)
|
(unaudited)
|
|
|
|
|
Year ended December 31,
|
|
|
|
|
2017
|
|
|
|
|
2016
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
Net income
|
|
|
$
|
66,807
|
|
|
|
$
|
43,840
|
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
19,395
|
|
|
|
|
13,632
|
|
(Gain)/loss on disposition of property and equipment
|
|
|
|
21
|
|
|
|
|
(64
|
)
|
Amortization of debt discount and debt issuance costs
|
|
|
|
117
|
|
|
|
|
124
|
|
Stock-based compensation expense
|
|
|
|
38,542
|
|
|
|
|
22,471
|
|
Loss on early repayment of debt
|
|
|
|
923
|
|
|
|
|
-
|
|
Cash paid for derivative settlement
|
|
|
|
(24
|
)
|
|
|
|
-
|
|
Loss on derivative
|
|
|
|
673
|
|
|
|
|
-
|
|
Deferred income taxes, net
|
|
|
|
(2,087
|
)
|
|
|
|
(1,848
|
)
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
Accounts receivable
|
|
|
|
(237
|
)
|
|
|
|
1,015
|
|
Prepaid expenses
|
|
|
|
(507
|
)
|
|
|
|
(944
|
)
|
Inventory
|
|
|
|
462
|
|
|
|
|
418
|
|
Deposits and other assets
|
|
|
|
(241
|
)
|
|
|
|
71
|
|
Accounts payable
|
|
|
|
79
|
|
|
|
|
(1,571
|
)
|
Income taxes, net
|
|
|
|
(6,355
|
)
|
|
|
|
6,051
|
|
Accrued commissions and bonuses
|
|
|
|
1,582
|
|
|
|
|
(684
|
)
|
Accrued payroll and vacation
|
|
|
|
2,246
|
|
|
|
|
1,871
|
|
Deferred revenue
|
|
|
|
11,913
|
|
|
|
|
10,675
|
|
Accrued expenses and other current liabilities
|
|
|
|
(2,709
|
)
|
|
|
|
3,896
|
|
Net cash provided by operating activities
|
|
|
|
130,600
|
|
|
|
|
98,953
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
Net change in funds held for clients
|
|
|
|
(230,957
|
)
|
|
|
|
(161,541
|
)
|
Purchases of property and equipment
|
|
|
|
(59,389
|
)
|
|
|
|
(43,805
|
)
|
Proceeds from sale of property and equipment
|
|
|
|
-
|
|
|
|
|
295
|
|
Net cash used in investing activities
|
|
|
|
(290,346
|
)
|
|
|
|
(205,051
|
)
|
Cash flows from financing activities:
|
|
|
|
|
|
|
Proceeds from issuance of long-term debt
|
|
|
|
40,940
|
|
|
|
|
5,000
|
|
Repurchases of common stock
|
|
|
|
(56,880
|
)
|
|
|
|
(35,561
|
)
|
Withholding taxes paid related to net share settlements
|
|
|
|
(32,850
|
)
|
|
|
|
(14,396
|
)
|
Principal payments on long-term debt
|
|
|
|
(35,335
|
)
|
|
|
|
(964
|
)
|
Net change in client funds obligation
|
|
|
|
230,957
|
|
|
|
|
161,541
|
|
Debt extinguishment costs
|
|
|
|
(823
|
)
|
|
|
|
-
|
|
Payment of debt issuance costs
|
|
|
|
(344
|
)
|
|
|
|
(78
|
)
|
Net cash provided by financing activities
|
|
|
|
145,665
|
|
|
|
|
115,542
|
|
Net change in cash and cash equivalents
|
|
|
|
(14,081
|
)
|
|
|
|
9,444
|
|
Cash and cash equivalents
|
|
|
|
|
|
|
Beginning of year
|
|
|
|
60,158
|
|
|
|
|
50,714
|
|
End of year
|
|
|
$
|
46,077
|
|
|
|
$
|
60,158
|
|
Supplemental disclosures of cash flow information:
|
|
|
|
|
|
|
Cash paid for interest, net of amounts capitalized
|
|
|
$
|
791
|
|
|
|
$
|
938
|
|
Cash paid for income taxes
|
|
|
$
|
18,332
|
|
|
|
$
|
9,323
|
|
Noncash investing and financing activities:
|
|
|
|
|
|
|
Purchases of property and equipment, accrued but not paid
|
|
|
$
|
6,686
|
|
|
|
$
|
4,651
|
|
Stock-based compensation for capitalized software
|
|
|
$
|
3,285
|
|
|
|
$
|
1,784
|
|
|
|
Paycom Software, Inc.
|
Reconciliation of GAAP to non-GAAP Financial Measures
|
(in thousands, except share and per share amounts)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
Year ended
|
|
|
|
December 31, 2017
|
|
|
December 31, 2016
|
|
|
December 31, 2017
|
|
|
December 31, 2016
|
Net income to Adjusted EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
$
|
12,905
|
|
|
|
$
|
8,633
|
|
|
|
$
|
66,807
|
|
|
|
$
|
43,840
|
|
Interest expense
|
|
|
|
153
|
|
|
|
|
303
|
|
|
|
|
911
|
|
|
|
|
1,036
|
|
Provision for income taxes
|
|
|
|
4,947
|
|
|
|
|
4,116
|
|
|
|
|
9,840
|
|
|
|
|
13,403
|
|
Depreciation and amortization expense
|
|
|
|
5,497
|
|
|
|
|
3,961
|
|
|
|
|
19,395
|
|
|
|
|
13,632
|
|
EBITDA
|
|
|
|
23,502
|
|
|
|
|
17,013
|
|
|
|
|
96,953
|
|
|
|
|
71,911
|
|
Non-cash stock-based compensation expense
|
|
|
|
6,759
|
|
|
|
|
3,689
|
|
|
|
|
38,513
|
|
|
|
|
22,546
|
|
Loss on early repayment of debt
|
|
|
|
923
|
|
|
|
|
-
|
|
|
|
|
923
|
|
|
|
|
-
|
|
Change in fair value of interest rate swap
|
|
|
|
649
|
|
|
|
|
-
|
|
|
|
|
649
|
|
|
|
|
-
|
|
Adjusted EBITDA
|
|
|
$
|
31,833
|
|
|
|
$
|
20,702
|
|
|
|
$
|
137,038
|
|
|
|
$
|
94,457
|
|
Total revenues
|
|
|
$
|
114,025
|
|
|
|
$
|
87,810
|
|
|
|
$
|
433,047
|
|
|
|
$
|
329,141
|
|
Adjusted EBITDA as a % of revenues
|
|
|
|
27.9
|
%
|
|
|
|
23.6
|
%
|
|
|
|
31.6
|
%
|
|
|
|
28.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
Year ended
|
|
|
|
December 31, 2017
|
|
|
December 31, 2016
|
|
|
December 31, 2017
|
|
|
December 31, 2016
|
Net income to non-GAAP net income
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
$
|
12,905
|
|
|
|
$
|
8,633
|
|
|
|
$
|
66,807
|
|
|
|
$
|
43,840
|
|
Non-cash stock-based compensation expense
|
|
|
|
6,759
|
|
|
|
|
3,689
|
|
|
|
|
38,513
|
|
|
|
|
22,546
|
|
Loss on early repayment of debt
|
|
|
|
923
|
|
|
|
|
-
|
|
|
|
|
923
|
|
|
|
|
-
|
|
Change in fair value of interest rate swap
|
|
|
|
649
|
|
|
|
|
-
|
|
|
|
|
649
|
|
|
|
|
-
|
|
Income tax effect on non-GAAP adjustments
|
|
|
|
(4,458
|
)
|
|
|
|
(1,556
|
)
|
|
|
|
(30,233
|
)
|
|
|
|
(14,790
|
)
|
Non-GAAP net income
|
|
|
$
|
16,778
|
|
|
|
$
|
10,766
|
|
|
|
$
|
76,659
|
|
|
|
$
|
51,596
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share, basic
|
|
|
$
|
0.22
|
|
|
|
$
|
0.15
|
|
|
|
$
|
1.15
|
|
|
|
$
|
0.76
|
|
Earnings per share, diluted
|
|
|
$
|
0.22
|
|
|
|
$
|
0.15
|
|
|
|
$
|
1.13
|
|
|
|
$
|
0.74
|
|
Non-GAAP net income per share, basic
|
|
|
$
|
0.29
|
|
|
|
$
|
0.19
|
|
|
|
$
|
1.33
|
|
|
|
$
|
0.90
|
|
Non-GAAP net income per share, diluted
|
|
|
$
|
0.29
|
|
|
|
$
|
0.18
|
|
|
|
$
|
1.30
|
|
|
|
$
|
0.87
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
58,100,141
|
|
|
|
|
57,652,531
|
|
|
|
|
57,839,155
|
|
|
|
|
57,550,204
|
|
Diluted
|
|
|
|
58,850,271
|
|
|
|
|
58,882,996
|
|
|
|
|
58,790,019
|
|
|
|
|
58,968,099
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
Year ended
|
|
|
|
December 31, 2017
|
|
|
December 31, 2016
|
|
|
December 31, 2017
|
|
|
December 31, 2016
|
Earnings per share to non-GAAP net income per share, basic:
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share, basic
|
|
|
$
|
0.22
|
|
|
|
$
|
0.15
|
|
|
|
$
|
1.15
|
|
|
|
$
|
0.76
|
|
Non-cash stock-based compensation expense
|
|
|
|
0.12
|
|
|
|
|
0.06
|
|
|
|
|
0.67
|
|
|
|
|
0.39
|
|
Loss on early repayment of debt
|
|
|
|
0.02
|
|
|
|
|
-
|
|
|
|
|
0.02
|
|
|
|
|
-
|
|
Change in fair value of interest rate swap
|
|
|
|
0.01
|
|
|
|
|
-
|
|
|
|
|
0.01
|
|
|
|
|
-
|
|
Income tax effect on non-GAAP adjustments
|
|
|
|
(0.08
|
)
|
|
|
|
(0.02
|
)
|
|
|
|
(0.52
|
)
|
|
|
|
(0.25
|
)
|
Non-GAAP net income per share, basic
|
|
|
$
|
0.29
|
|
|
|
$
|
0.19
|
|
|
|
$
|
1.33
|
|
|
|
$
|
0.90
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
Year ended
|
|
|
|
December 31, 2017
|
|
|
December 31, 2016
|
|
|
December 31, 2017
|
|
|
December 31, 2016
|
Earnings per share to non-GAAP net income per share, diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share, diluted
|
|
|
$
|
0.22
|
|
|
|
$
|
0.15
|
|
|
|
$
|
1.13
|
|
|
|
$
|
0.74
|
|
Non-cash stock-based compensation expense
|
|
|
|
0.12
|
|
|
|
|
0.06
|
|
|
|
|
0.66
|
|
|
|
|
0.38
|
|
Loss on early repayment of debt
|
|
|
|
0.02
|
|
|
|
|
-
|
|
|
|
|
0.02
|
|
|
|
|
-
|
|
Change in fair value of interest rate swap
|
|
|
|
0.01
|
|
|
|
|
-
|
|
|
|
|
0.01
|
|
|
|
|
-
|
|
Income tax effect on non-GAAP adjustments
|
|
|
|
(0.08
|
)
|
|
|
|
(0.03
|
)
|
|
|
|
(0.52
|
)
|
|
|
|
(0.25
|
)
|
Non-GAAP net income per share, diluted
|
|
|
$
|
0.29
|
|
|
|
$
|
0.18
|
|
|
|
$
|
1.30
|
|
|
|
$
|
0.87
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
Year ended
|
|
|
|
December 31, 2017
|
|
|
December 31, 2016
|
|
|
December 31, 2017
|
|
|
December 31, 2016
|
Adjusted gross profit:
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
|
$
|
114,025
|
|
|
|
$
|
87,810
|
|
|
|
$
|
433,047
|
|
|
|
$
|
329,141
|
|
Less: Total cost of revenues
|
|
|
|
(19,180
|
)
|
|
|
|
(15,482
|
)
|
|
|
|
(72,028
|
)
|
|
|
|
(54,066
|
)
|
Total gross profit
|
|
|
|
94,845
|
|
|
|
|
72,328
|
|
|
|
|
361,019
|
|
|
|
|
275,075
|
|
Plus: Non-cash stock-based compensation expense
|
|
|
|
751
|
|
|
|
|
492
|
|
|
|
|
3,950
|
|
|
|
|
2,217
|
|
Total adjusted gross profit
|
|
|
|
95,596
|
|
|
|
|
72,820
|
|
|
|
|
364,969
|
|
|
|
|
277,292
|
|
Total gross profit %
|
|
|
|
83.2
|
%
|
|
|
|
82.4
|
%
|
|
|
|
83.4
|
%
|
|
|
|
83.6
|
%
|
Total adjusted gross profit %
|
|
|
|
83.8
|
%
|
|
|
|
82.9
|
%
|
|
|
|
84.3
|
%
|
|
|
|
84.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
Year ended
|
|
|
|
December 31, 2017
|
|
|
December 31, 2016
|
|
|
December 31, 2017
|
|
|
December 31, 2016
|
Adjusted sales and marketing expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing expenses
|
|
|
$
|
44,052
|
|
|
|
$
|
36,556
|
|
|
|
$
|
150,512
|
|
|
|
$
|
119,258
|
|
Less: Non-cash stock-based compensation expense
|
|
|
|
(1,575
|
)
|
|
|
|
(933
|
)
|
|
|
|
(6,086
|
)
|
|
|
|
(3,656
|
)
|
Total adjusted sales and marketing expenses
|
|
|
$
|
42,477
|
|
|
|
$
|
35,623
|
|
|
|
$
|
144,426
|
|
|
|
$
|
115,602
|
|
Total revenues
|
|
|
$
|
114,025
|
|
|
|
$
|
87,810
|
|
|
|
$
|
433,047
|
|
|
|
$
|
329,141
|
|
Total adjusted sales and marketing expenses as a % of revenues
|
|
|
|
37.3
|
%
|
|
|
|
40.6
|
%
|
|
|
|
33.4
|
%
|
|
|
|
35.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
Year ended
|
|
|
|
December 31, 2017
|
|
|
December 31, 2016
|
|
|
December 31, 2017
|
|
|
December 31, 2016
|
Adjusted administrative expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Total administrative expenses
|
|
|
$
|
75,411
|
|
|
|
$
|
59,647
|
|
|
|
$
|
282,394
|
|
|
|
$
|
217,104
|
|
Less: Non-cash stock-based compensation expense
|
|
|
|
(6,008
|
)
|
|
|
|
(3,197
|
)
|
|
|
|
(34,563
|
)
|
|
|
|
(20,329
|
)
|
Total adjusted administrative expenses
|
|
|
$
|
69,403
|
|
|
|
$
|
56,450
|
|
|
|
$
|
247,831
|
|
|
|
$
|
196,775
|
|
Total revenues
|
|
|
$
|
114,025
|
|
|
|
$
|
87,810
|
|
|
|
$
|
433,047
|
|
|
|
$
|
329,141
|
|
Total adjusted administrative expenses as a % of revenues
|
|
|
|
60.9
|
%
|
|
|
|
64.3
|
%
|
|
|
|
57.2
|
%
|
|
|
|
59.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
Year ended
|
|
|
|
December 31, 2017
|
|
|
December 31, 2016
|
|
|
December 31, 2017
|
|
|
December 31, 2016
|
Adjusted research and development expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development expenses
|
|
|
$
|
7,426
|
|
|
|
$
|
6,672
|
|
|
|
$
|
30,430
|
|
|
|
$
|
20,966
|
|
Less: Non-cash stock-based compensation expense
|
|
|
|
(398
|
)
|
|
|
|
(160
|
)
|
|
|
|
(1,912
|
)
|
|
|
|
(836
|
)
|
Total adjusted research and development expenses
|
|
|
$
|
7,028
|
|
|
|
$
|
6,512
|
|
|
|
$
|
28,518
|
|
|
|
$
|
20,130
|
|
Total revenues
|
|
|
$
|
114,025
|
|
|
|
$
|
87,810
|
|
|
|
$
|
433,047
|
|
|
|
$
|
329,141
|
|
Total adjusted research and development expenses as a % of revenues
|
|
|
|
6.2
|
%
|
|
|
|
7.4
|
%
|
|
|
|
6.6
|
%
|
|
|
|
6.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
Year ended
|
|
|
|
December 31, 2017
|
|
|
December 31, 2016
|
|
|
December 31, 2017
|
|
|
December 31, 2016
|
Total research and development costs:
|
|
|
|
|
|
|
|
|
|
|
|
|
Capitalized research and development costs
|
|
|
$
|
4,773
|
|
|
|
$
|
2,212
|
|
|
|
$
|
15,821
|
|
|
|
$
|
8,817
|
|
Research and development expenses
|
|
|
|
7,426
|
|
|
|
|
6,672
|
|
|
|
|
30,430
|
|
|
|
|
20,966
|
|
Total research and development costs
|
|
|
$
|
12,199
|
|
|
|
$
|
8,884
|
|
|
|
$
|
46,251
|
|
|
|
$
|
29,783
|
|
Total revenues
|
|
|
$
|
114,025
|
|
|
|
$
|
87,810
|
|
|
|
$
|
433,047
|
|
|
|
$
|
329,141
|
|
Total research and development costs as a % of total revenues
|
|
|
|
10.7
|
%
|
|
|
|
10.1
|
%
|
|
|
|
10.7
|
%
|
|
|
|
9.0
|
%
|
Total adjusted research and development costs:
|
|
|
|
|
|
|
|
|
|
|
|
|
Total research and development costs
|
|
|
$
|
12,199
|
|
|
|
$
|
8,884
|
|
|
|
$
|
46,251
|
|
|
|
$
|
29,783
|
|
Less: Capitalized non-cash stock-based compensation
|
|
|
|
(706
|
)
|
|
|
|
(350
|
)
|
|
|
|
(3,285
|
)
|
|
|
|
(1,784
|
)
|
Less: Non-cash stock-based compensation expense
|
|
|
|
(398
|
)
|
|
|
|
(160
|
)
|
|
|
|
(1,912
|
)
|
|
|
|
(836
|
)
|
Total adjusted research and development costs
|
|
|
$
|
11,095
|
|
|
|
$
|
8,374
|
|
|
|
$
|
41,054
|
|
|
|
$
|
27,163
|
|
Total revenues
|
|
|
$
|
114,025
|
|
|
|
$
|
87,810
|
|
|
|
$
|
433,047
|
|
|
|
$
|
329,141
|
|
Total adjusted research and development costs as a % of total
revenues
|
|
|
|
9.7
|
%
|
|
|
|
9.5
|
%
|
|
|
|
9.5
|
%
|
|
|
|
8.3
|
%
|
|
|
Paycom Software, Inc.
|
Breakout of Non-Cash Stock-Based Compensation Expense
|
(in thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
Year ended
|
|
|
|
December 31, 2017
|
|
|
December 31, 2016
|
|
|
December 31, 2017
|
|
|
December 31, 2016
|
Stock-based compensation expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
$
|
751
|
|
|
$
|
492
|
|
|
$
|
3,950
|
|
|
$
|
2,217
|
Sales and marketing
|
|
|
|
1,575
|
|
|
|
933
|
|
|
|
6,086
|
|
|
|
3,656
|
Research and development
|
|
|
|
398
|
|
|
|
160
|
|
|
|
1,912
|
|
|
|
836
|
General and administrative
|
|
|
|
4,035
|
|
|
|
2,104
|
|
|
|
26,565
|
|
|
|
15,837
|
Total non-cash stock-based compensation expense
|
|
|
$
|
6,759
|
|
|
$
|
3,689
|
|
|
$
|
38,513
|
|
|
$
|
22,546
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20180206006394/en/
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