• In February 2026, Paycom Software reported fourth-quarter 2025 revenue of US$544.3 million and net income of US$113.8 million, alongside full-year 2025 revenue of US$2.05 billion and net income of US$453.4 million, and issued 2026 revenue guidance of US$2.18–US$2.20 billion.
• Alongside these figures, Paycom highlighted 2025 margin expansion, improved revenue retention at 91%, and growing uptake of its AI engine IWant™, which a commissioned Forrester study suggested could deliver a very large three-year return on investment for a representative client organization.
• With 2026 revenue guidance calling for 6% to 7% growth, we’ll now examine how this tempered outlook affects Paycom’s earlier investment narrative.

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Paycom Software Investment Narrative Recap

To own Paycom, you need to believe its single-database HR platform and AI tools like IWant can keep deepening client usage and retention, even with slower growth guidance. Right now, the key near term catalyst is whether IWant-driven automation actually sustains recurring revenue and margins, while the biggest risk is that softer 6% to 7% revenue guidance signals demand headwinds that limit both adoption and pricing power. The latest results do not remove that risk.

The most relevant new data point is the 2026 revenue outlook of US$2.18–US$2.20 billion, paired with 91% revenue retention and a 180 basis point adjusted EBITDA margin expansion to 43%. This mix of moderating top line growth and improving profitability matters for investors who previously expected faster expansion from AI and automation, because it reframes the IWant story around efficiency and client stickiness rather than rapid acceleration in overall revenue.

But even with improving margins, investors should be aware that slower revenue guidance could amplify concerns about...

Paycom Software's narrative projects $2.5 billion revenue and $586.5 million earnings by 2028.

Uncover how Paycom Software's forecasts yield a $197.18 fair value, a 57% upside to its current price.

Exploring Other Perspectives

The most bullish analysts were assuming revenue could reach about US$2.6 billion and earnings US$638 million by 2029, which is far more optimistic than today’s 6% to 7% guidance and raises fresh questions about whether heavy AI and data center investment will really deliver the higher growth those forecasts were built on.

Explore 4 other fair value estimates on Paycom Software - why the stock might be worth just $197.18!

Build Your Own Paycom Software Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Paycom Software research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.
• Our free Paycom Software research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Paycom Software's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.