Paycom Software, Inc. ("Paycom") (NYSE:PAYC), a leading provider of a
comprehensive cloud-based human capital management software solution,
today announced its financial results for the quarter ended June 30,
"Our efforts to capture share of the Human Capital Management sector are
paying off," said Chad Richison, President and Chief Executive Officer
of Paycom. "Our second quarter results were highlighted by revenue
growth of 39.3% over the second quarter last year, and adjusted EBITDA
for the second quarter of 2014 representing 18.2% of total revenues. I
am very pleased with the traction that we are seeing with recent major
new application launches and new application enhancements. Our footprint
continues to grow, evidenced by the addition of five new sales offices
in the first half of 2014. We look forward to the opportunities these
new sales teams will afford Paycom in the coming months."
Financial Highlights for the Second Quarter of
Total Revenues of $33.3 million increased 39.3% compared to $23.9
million in the same period last year, primarily due to the addition of
clients in mature sales offices. Recurring revenues of $32.7
million also increased 39.6% from the comparable prior year period, and
comprised 98.2% of total revenues.
GAAP Net Income (Loss) was ($0.6) million, or ($0.01) per diluted
share, compared to $0.4 million, or $0.01 per diluted share in the same
period last year. The GAAP net loss for the second quarter of 2014 was
due to a one-time charge of $4.0 million to retire related-party debt
from the proceeds of our initial public offering ("IPO").
Adjusted EBITDA1 was $6.1 million, compared to
$4.4 million in the same period last year.
Non-GAAP Net Income1 was $2.1 million,
or $0.04 per diluted share, compared to $0.5 million, or $0.01 per
diluted share, in the same period last year.
Annualized New Recurring Revenue ("ANRR") was $11.5 million, up
from $8.3 million for the same period last year.
Cash and Cash Equivalents were $14.0 million as of June 30, 2014.
Total Debt was $27.4 million as of June 30, 2014. This debt
consisted of debt on the corporate headquarters. Paycom used net
proceeds from its IPO and existing cash in April to retire $65.0 million
of outstanding debt.
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.
Business Highlights for the Second Quarter of
Total Sales Teams and Offices consist of 31 sales teams in 30
offices. Paycom currently has a sales office in 25 of the 50 largest
Metropolitan Statistical Areas ("MSAs") in the United States.
Application Launches included Paycom Push Reporting, a new
capability that will increase the quality, speed and efficiency with
which human resource executives can populate, produce and analyze
employee data generated reports. With Push Reporting companies can pull
very complex reports in a very simple way.
Initial Public Offering - On April 21, 2014, Paycom
successfully completed an initial public offering whereby an aggregate
of 7,641,750 shares, including 4,606,882 primary shares generated net
proceeds of approximately $64.3 million to Paycom. Concurrent with the
IPO, Paycom retired $65.0 million of outstanding debt.
"With the completion of our IPO now behind us, and with the recent
record number of office and application launches, we believe we are very
well positioned to deliver rapid growth" continued Mr. Richison. "We
remain squarely focused delivering robust technology solutions across
our HCM suite, and expanding our national sales footprint into the
significant 'whitespace' opportunity that remains untapped. Our outlook
reflects our confidence in our ability to execute against our strategic
approach of transforming the payroll and human resources industry.
Paycom is a SaaS HCM provider that offers a single-database platform for
the entire employment life cycle, a key differentiator that sets us
Paycom provides the following expected financial guidance for the
quarter ending September 30, 2014, and year ending December 31, 2014:
Third Quarter 2014
Total Revenues in the range of $34 million to $35 million.
Adjusted EBITDA in the range of $4.5 million to $5.5 million.
Fiscal Year 2014
Total Revenues in the range of $143 million to $145 million.
Adjusted EBITDA in the range of $22 million to $24 million.
We have not reconciled the Adjusted EBITDA range for the quarter ending
September 30, 2014 or the year ending December 31, 2014 to net income
(loss) because applicable information for future periods, on which this
reconciliation is based, is not readily available due to uncertainty
regarding, and the potential variability of, depreciation and
amortization, interest expense, taxes, stock-based compensation expense
and other items. Accordingly, a reconciliation of these Adjusted EBITDA
ranges to net income are not available at this time without unreasonable
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 EBITDA, Adjusted EBITDA and non-GAAP net
income. We use earnings before interest, taxes, depreciation and
amortization ("EBITDA"), Adjusted EBITDA and non-GAAP net income, as
supplemental measures to review and assess our performance and planning
purposes. We define: (i) EBITDA as net income, plus interest expense,
taxes and depreciation and amortization, (ii) Adjusted EBITDA as net
income, plus interest expense, taxes, depreciation and amortization,
stock-based compensation expense, net loss on early extinguishment of
debt and certain transaction expenses that are not core to our
operations and (iii) non-GAAP net income as pro forma net income plus
tax adjusted stock-based compensation expense, tax adjusted net loss on
early extinguishment of debt and certain tax adjusted transaction
expenses that are not core to our operations. EBITDA, Adjusted EBITDA
and non-GAAP net income are metrics that we believe are useful to
investors in evaluating our performance and facilitating comparison with
other peer companies, many of which use similar non-GAAP financial
measures to supplement results under GAAP.
EBITDA, 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 (loss) or pro forma net income (loss), as
applicable, which we consider to be the most directly comparable GAAP
measures. EBITDA, Adjusted EBITDA and non-GAAP net income have
limitations as analytical tools, and when assessing our operating
performance, you should not consider EBITDA, Adjusted EBITDA and
non-GAAP net income in isolation, or as a substitute for "Net income
(loss)," "Pro forma net income (loss)" or other Condensed Consolidated
Statements of Income data prepared in accordance with GAAP. EBITDA,
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, August 5, 2014 at 5:00 p.m. Eastern Time to discuss the
company's financial results. To access this call, dial (888) 317-6003
(domestic) or (412)-317-6061 (international) with conference ID 0376659.
A live webcast, as well as the replay of the conference call will be
available on the Investor Relations page of the company's website at http://investors.paycom.com.
A replay of this conference call can also be accessed by dialing
(877)-344-7529 (domestic) or (877)-344-7529 (international) until August
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 serves businesses of all sizes and in every industry. As one of
the leading human capital management providers, Paycom serves clients in
all 50 states and has sales offices in 30 major cities across the nation.
Certain statements in this press release are, and certain statements on
the teleconference call may be, forward looking statements within the
meaning provided under the Private Securities Litigation Reform Act of
1995. Such forward-looking statements are made only as of the date
hereof. These statements involve known and unknown risks and
uncertainties that may cause Paycom's actual results to differ
materially from those stated or implied by such forward-looking
statements, as a result of various risks and uncertainties including:
changes in the demand for our solution, pricing changes and the impact
of competition; changes in technology; our ability to attract, hire and
retain skilled employees; our ability to attract and retain clients and
increase the number of applications utilized by our clients; our ability
to develop and market new applications, improve our existing
applications and increase the value of our solution; our ability to
maintain or increase our revenues and revenue growth rate; the
sufficiency of our cash and cash equivalents and cash generated from
operations to meet our working capital and capital expenditure
requirements; changes in laws regulating payroll taxes and employee
benefits; the possibility of a security breach that disrupts operations
or exposes client confidential data; and potentially unfavorable
outcomes related to pending legal matters.
Other factors that may cause such differences include, but are not
limited to, those discussed in our periodic filings with the Securities
and Exchange Commission, including those discussed in the prospectus
filed with the Securities and Exchange Commission on April 15, 2014, and
in particular the section entitled "Risk Factors" of the prospectus.
Paycom undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events, or otherwise, except as required by applicable securities
Property, plant and equipment, net of accumulated depreciation of
$14.1 million and $11.5 million, respectively
Intangible assets, net of accumulated amortization of $11.3
million and $10.5 million, respectively
(in thousands, except share amounts)
[ Back To NFVZone's Homepage ]