Paycom Gears Up to Report Q4 Earnings: What's in Store for the Stock?

Paycom Software, Inc. PAYC is set to report fourth-quarter 2025 results on Feb. 11, after market close.

The Zacks Consensus Estimate for fourth-quarter earnings is pinned at $2.44 per share, indicating a year-over-year increase of 5.2%. The consensus estimate for the bottom line has remained unchanged over the past 30 days.

The Zacks Consensus Estimate for Paycom’s fourth-quarter revenues is pegged at approximately $542.7 million, suggesting a rise of 9.9% from the year-ago quarter’s sales of $493.8 million.

Paycom’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, while missing once, the average surprise being 9.8%.

Paycom Software, Inc. Price and EPS Surprise

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

Factors Likely to Influence PAYC’s Q4 Results

Paycom’s fourth-quarter performance is likely to have benefited from expanding its client base through its sustained focus on enhancing its product portfolio and a high-margin recurring revenue business model. The enhancement of its offerings through artificial intelligence (AI) implementation is likely to have gained new clients, driving the company’s revenues. Our model estimate for PAYC’s recurring revenues is pegged at $515.2 million, suggesting year-over-year growth of 10.8%.

Paycom’s focus on adding more functionality to its Beti and GONE solutions, while delivering a seamless employee experience, enables it to attract new customers. Beti reduces administrative burdens, enabling employees to manage their own payroll requirements independently, while GONE takes care of time-off requests. In the third quarter of 2025, management stated that Beti reduces payroll processing labor by up to 90% and cuts the time spent correcting payroll errors by up to 85%, improving efficiency and return on investment for clients.

Paycom’s fourth-quarter result is expected to reflect early benefits from the rollout of IWant, the company’s new AI command-driven tool that enhances user interaction through voice and text-based navigation. IWant’s command-driven AI engine is expected to increase usage among non-daily users, while also delivering better return on investment for its clients. The company’s innovative solutions are likely to have positively impacted the to-be-reported quarter’s performance.

Despite strong product innovation, Paycom’s growth is expected to have been negatively impacted by a weaker macroeconomic environment. Geopolitical tensions and economic uncertainty are anticipated to have created near-term revenue headwinds. Layoffs and hiring slowdowns in various industries could have weighed on transaction volumes while reducing the overall demand for payroll services. Together, these factors are expected to have weighed on the company's fourth-quarter overall performance.

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 not the case here.

Currently, Paycom has an Earnings ESP of 0.00% and carries a Zacks Rank #3. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Stocks to Consider

IPG Photonics IPGP has an Earnings ESP of +15.08% and sports a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

IPG Photonics is slated to report fourth-quarter 2025 results on Feb. 12. The Zacks Consensus Estimate for IPGP’s fourth-quarter 2025 earnings is pegged at 25 cents per share, up by a penny over the past 30 days, indicating an increase of 38.9% from the year-ago quarter’s reported figure.

Applied Materials AMAT has an Earnings ESP of +3.06% and carries a Zacks Rank #2 at present.

It is set to report first-quarter fiscal 2026 results on Feb. 12. The Zacks Consensus Estimate for Applied Materials’ first-quarter earnings is pegged at $2.19 per share, unchanged over the past 30 days, indicating a decline of 7.9% from the year-ago quarter’s reported figure.

Analog Devices ADI has an Earnings ESP of +2.98% and carries a Zacks Rank #2 at present.

Analog Devices is scheduled to report first-quarter fiscal 2026 results on Feb. 18. The Zacks Consensus Estimate for Analog Devices’ first-quarter fiscal 2026 earnings is pegged at $2.30 per share, up by 2 cents over the past 30 days, indicating a rise of 41.1% from the year-ago quarter’s reported figure.

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

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