Paycom boosts revenue, but falls short in end-of-year 2024 expectations
Paycom made significant financial profits in 2024, but failed to reach market estimates, leading to cutbacks on spending and sending shares down to 3.3%.
The Oklahoma City-based human resource payroll company reported a total revenue of $1.9 million last year, an 11% increase from $1.7 million the prior year. Analysts had predicted $1.87 million in revenue.
Nonetheless, Bob Foster, the newly appointed chief financial officer at Paycom, expressed optimism about the company's earnings in the fourth quarter of 2024, which totaled $493.8 million, a 13.6% increase from the year before and above the $481.1 million forecast from analysts.
"It was a strong end to the year...' Foster said. 'That momentum, combined with our record-setting sales to start the year, positions us well for 2025.'
Paycom also reported recurring and other revenues of $1.8 million, an increase of 10.9% in 2023. Net income totaled $502 million and earnings per share amounted to $8.92, compared to $340.8 million and $5.88, respectively, the year before.
More: Paycom shrugged off the impact of COVID, nearly doubling its workforce in the last 5 years
The company expects revenue to increase 8% by mid-2025, according to its report. The company forecast a total revenue of $2.015 billion to $2.035 billion in total revenue this year as three new sales offices opened last month in Raleigh, North Carolina; Los Angeles, California; and Providence, Rhode Island.
"We expect recurring and other revenue growth to accelerate to consistent double digits in the second quarter through fourth quarter," Foster said. "And with the talented team we have in place, combined with a clear product vision, I have no doubt we'll build on our success and continue to provide the most automated solution in the industry."
However, analyst predictions estimated total revenue around $2.05 billion, and the company expects budget IT budget cuts and reduced spending amid uncertainty.
Chad Richison, Paycom founder, CEO and chairman, said its product's strong Return on Investment contributed to its strong end-of-the-year results.
'Throughout the year, we executed our plan of providing world-class service, solution automation and client ROI achievement, which empowered us to deliver better-than-expected results to close out the year,' Richison said in a news release Tuesday.
The global company recorded a total client count of 37,543 at the end of 2024, a 2% increase from the year before, though it remained relatively flat, according to the release.
"Our solution remains the most automated on the market and is delivering strong ROI for our clients," the CEO said.
Contributing Reuters
This article originally appeared on Oklahoman: Paycom OKC revenue fell short of 2024 market estimates
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