Paycom to Report Q2 Earnings: What's in Store for the Stock?

Paycom Software, Inc. (PAYC) is set to report second-quarter 2025 results on Aug. 6, after market close.

The Zacks Consensus Estimate for second-quarter earnings is pinned at $1.78 per share, indicating a year-over-year increase of 9.9%. The consensus estimate for the bottom line has been revised downward by a penny over the past 30 days.

The Zacks Consensus Estimate for Paycom’s second-quarter revenues is pegged at approximately $472 million, suggesting a rise of 7.9% from the year-ago quarter’s sales of $437.5 million.

Paycom’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 7.5%.

Paycom Software, Inc. Price, Consensus and EPS Surprise

Paycom Software, Inc. price-consensus-eps-surprise-chart | Paycom Software, Inc. Quote

Factors Likely to Influence PAYC’s Q2 Results

Paycom’s second-quarter results are expected to benefit from sustained growth in recurring revenues, fueled by new client acquisitions and artificial intelligence (AI)-driven product innovations. The company’s continued investment in automation, international expansion and enhanced value propositions is likely to have strengthened its competitive position.

Paycom’s strategic push into AI-driven automation is likely to have played a key role in expanding its customer base. The integration of AI-enhanced payroll and HR tools is making its platform more efficient and attractive to businesses looking to streamline operations. Our estimate for recurring revenues is $445.5 million, reflecting a 9.9% year-over-year increase, underscoring the stickiness of its subscription-based model.

Paycom’s focus on improving Beti and GONE solutions is likely to have driven greater adoption. Beti enables employees to manage payroll independently, reducing administrative burdens, while GONE simplifies time-off requests. By offering a seamless employee experience, the company is increasing client engagement and improving retention. During the first quarter, Beti enabled up to 90% reduction in payroll processing effort, while GONE automated time-off approvals and delivered up to 800% ROI.

Despite strong product innovation, Paycom’s growth is expected to have been impacted by a weaker macroeconomic environment. Layoffs and hiring slowdowns in various industries could have weighed on transaction volumes and overall demand for payroll services. Additionally, geopolitical tensions and economic uncertainty are anticipated to have created near-term revenue headwinds.

Earnings Whispers for PAYC Stock

Our proven model conclusively predicts an earnings beat for Paycom this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is the exact case here.

Though Paycom has an Earnings ESP of +0.98%, it carries a Zacks Rank #4 (Sell) at present. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Stocks to Consider

Here are some companies worth considering, as our model indicates that they possess the right combination of factors to exceed earnings expectations in their upcoming releases:

Arista Networks (ANET) has an Earnings ESP of +0.96% and sports a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Arista Networks shares have appreciated 6.3% year to date. Arista Networks is set to report its second-quarter 2025 results on Aug. 5.

Bumble (BMBL) presently has an Earnings ESP of +37.01% and flaunts a Zacks Rank #1.

Bumble shares have lost 6.8% year to date. Bumble is scheduled to report its second-quarter 2025 results on Aug. 6.

MKS Inc. (MKSI) currently has an Earnings ESP of +1.33% and sports a Zacks Rank #1.

MKS shares are down 11.2% year to date. MKS is set to report its second-quarter 2025 results on Aug. 6.

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This article originally published on Zacks Investment Research (zacks.com).

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