Paycom Software, Inc.
Paycom Software, Inc. provides cloud-based human capital management (HCM) solution delivered as software-as-a-service for small to mid-sized companies in the United States. The company offers functionality and data analytics that businesses need to manage the employment life cycle from recruitment to retirement. The company's HCM solution offers payroll applications comprising better employee transaction interface, payroll and payroll tax management, payroll card, Everyday, Paycom pay, Client Action Center, expense management, garnishment administration, and GL concierge applications; talent acquisition, including applicant tracking, background checks, on-boarding, e-verify, and tax credit services; and talent management applications that include employee self-service, compensation budgeting, performance management, position management, Paycom learning, certification management. The company also offers time and labor management, such as time and attendance, scheduling, time-off requests, and labor allocation solutions. Its HCM solution provides manager on-the-go that gives supervisors and managers the ability to perform a variety of tasks, such as approving time-off requests and expense reimbursements; direct data exchange; ask here, a tool for direct line of communication to ask work-related questions; document and checklist; government and compliance; benefits administration; COBRA administration; personnel action and performance discussion forms; Paycom surveys; retirement reporting; report center; and affordable care act applications, as well as Clue, which securely collects, tracks, and manages the vaccination and testing data of the workforce; and MyCom is a communications tool that provides organizations with a central place to share information with employees. Paycom Software, Inc. was founded in 1998 and is based in Oklahoma City, Oklahoma.
What does it do?
Paycom is a software company that handles all the boring but critical HR stuff that every business needs — think payroll, hiring, scheduling, and benefits, all in one place. Instead of a company using five different tools to pay its employees, track vacation days, and file taxes, Paycom bundles it all into a single app. Their standout product is called 'Beti,' which lets employees check and submit their own payroll before it gets processed, catching errors before they become headaches. They focus on small-to-mid-sized American businesses — think a regional restaurant chain or a logistics company with a few hundred employees.
Payroll and HR software is sticky — once a company builds its entire workforce operation around a platform, switching to a competitor is painful, expensive, and risky, which means Paycom keeps its customers for years. The HR tech space is massive and still fragmented, with many mid-sized businesses still running on outdated systems or spreadsheets. At a time when labor costs are one of the biggest expenses for businesses, tools that reduce payroll errors and automate HR tasks are seen as essential, not optional.
How does it make money?
Paycom makes almost all of its money through a subscription model — businesses pay a recurring fee based on the number of employees using the platform. With $2.1 billion in revenue last year, up from $1.9 billion the year before, the company is growing at roughly 10% annually. They also earn smaller fees tied to transaction volume, like processing payroll runs or handling tax filings. Because every employee added to a client's headcount means more revenue for Paycom, their income grows naturally alongside their customers' businesses.
Why do investors care?
The bull story is simple: Paycom has a sticky product in a massive, underpenetrated market of mid-sized U.S. companies. Their Beti product, which shifts payroll responsibility to employees themselves, is genuinely differentiated and hard for rivals to copy quickly. With $500 million in net profit on $2.1 billion in revenue, the company is already highly profitable, which is rare in software — it means they don't need to burn cash to grow. What has to go right: Paycom needs to keep winning new clients, hold onto existing ones, and potentially expand internationally to justify a higher valuation.
Deep Dive
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