PAYCOM SOFTWARE, INC. 2026 Q2 Earnings Call

You may begin. Thank you, and welcome to Paycom's earnings conference call for the second quarter of 2026.

Certain statements made on this call that are not historical facts, including those related to our future plans, objectives, and expected performance, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent our outlook only as of the date of this conference call. While we believe any forward-looking statements made on this call are reasonable, actual results may differ materially because the statements are based on our current expectations and subject to risks and uncertainties. These risks and uncertainties are discussed in our filings with the SEC, including our most recent annual report on Form 10-K. You should refer to and consider these factors when relying on such forward-looking information.

Any forward-looking statement made speaks only as of the date on which it is made, and we do not undertake and expressly disclaim any obligation to update or alter our forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by applicable law. Also, during today's call, we will refer to certain non-GAAP financial measures, including adjusted EBITDA, non-GAAP net income, and certain adjusted expenses. We use these non-GAAP financial measures to review and assess our performance and for planning purposes. A reconciliation schedule showing GAAP versus non-GAAP results is included in the press release that we issued after the close of the market today and is available on our website at investors.paycom.com. I will now turn the call over to Chad Richison, Paycom's Founder and CEO.

Chad? Thanks, James, and thank you to everyone joining our call today.

I'll briefly comment on some of the new product launches and achievements so far this year. I will pass the call over to our President, Shane Hadlock, and then Bob will review our second quarter results and full year guidance. We will take questions. Let's get started. We delivered another solid quarter with results coming in ahead of expectations. The benefit of our software's full solution automation, coupled with world-class service, continue to drive industry-leading ROI, which is resonating in the market. With our strong first half results, we are well-positioned to exceed our initial 2026 plan on both the revenue and profitability basis. Demand for automation is increasing, and our platform remains the most intelligent solution in the industry.

Thanks to our early focus on data integrity and consolidation, we continue to expand our automation capabilities with AI and automated decisioning to deliver even more value to our clients. Earlier this year, we announced the release of our career and succession planning solution, and we are seeing solid client adoption. This is another automated product that equips leaders with a solution to more easily identify and develop talent, ensuring organizations are better prepared for the future. With this product, organizations have reliable data to discover workforce talent gaps and assess talent readiness. A client of ours with over 500 employees who is already using our performance and Paycom learning products added career and succession planning, and for the first time, they have all key positions and successors identified.

They were very pleased with how quickly they could identify leadership gaps and fill them with people who were developed to step into the roles. Clients are thrilled with this new functionality and the automation it creates for career development and succession. In July, we released our latest automated product, Asset Management. This solution enables businesses to manage their physical and digital assets, which represent one of their largest budgetary spends, ensuring those investments are deployed, tracked, and recovered through our automated software. The launch of Asset Management expands our capabilities into an entirely new multibillion-dollar TAM that fits perfectly within our software ecosystem. By combining Asset Management with the automated tools already in the Paycom system, we help our clients strengthen the security of their assets, bolster compliance, and reduce lost property.

Not only can organizations track all of their assets across their locations, they can also identify the exact resources a position requires, which ensures a consistent deployment and retrieval of all company assets. Even though it was just released a few weeks ago, client feedback has been very strong, and they're already adopting this new technology. Asset Management marks the 45th product we have developed, hosted, distributed, and serviced over our nearly 28 years in business. We take great pride in our ability to consistently release industry-leading technology that generates tremendous ROI for our clients. I would like to turn the call over to Shane Hadlock. Prior to his role as our president, he served as our Chief Client Officer, where he was instrumental in increasing retention, driving world-class service, building strong groups of leaders, and delivering tremendous automation across the organization.

Let me turn the call over to Shane.

Thanks, Chad. We are driving innovation across our industry. This quarter we released Project Arc. Project Arc was the largest system-wide release we have had in our company's history. This new release fundamentally changes the way clients and their employees experience Paycom. Clients love the new scalability and customization. This new release gives each user a unique experience, helping them quickly find the information and action items most relevant to them. Our clients say that their managers are raving about how customizable the system is, making it easier for them to do their jobs. One of our clients with a few thousand employees said that they were impressed with the new Arc release because it provides great customization and performance for their employees, managers, and organization. In addition to the new customizable features, Project Arc included significant updates to enhance the performance, scalability, and functionality of our software.

These changes to system performance and scalability have produced an experience for our clients that is much more efficient. In fact, a client of ours with over 10,000 employees reported their system performance increased by 4X. Client feedback has been incredible. They are enjoying the benefits of this customization and improved scale, making the industry's most intelligent solution even more powerful. Our award-winning AI solution, I Want, continues to accelerate speed to value for our clients by providing them with system intelligence that automates events and tasks within the system. For many new employees and new users of our software, utilizing I Want is their first interaction of our software, making it easier than ever to use. As we roll out more AI and automation across the platform, we are driving measurable value for our clients and their employees.

I Want has been a game changer for our clients and the industry. I am proud of our team and all the work we have accomplished over the course of the year to drive efficiency and client satisfaction. Across the board, we have great talent at Paycom, especially in the leadership team. We have a deep and experienced bench with institutional knowledge and a competitive mindset that sets us apart. I would like to thank our employees for their contributions to an excellent first half of 2026 and the robust results year to date. We are building strong momentum on a variety of new products to further automate businesses. During the quarter, our product and culture received several accolades. Paycom earned the 2026 Top Rated Award from TrustRadius, which reflects strong client satisfaction across multiple HR and payroll categories.

I was also pleased to see Paycom was named to Newsweek's Greatest Workplaces in Tech. Our sales organization was included in Selling Power's 60 Best Companies to Sell For. These awards highlight our differentiated product set, client satisfaction, and elite sales program. This is an exciting time to be part of Paycom. With that, let me turn the call over to Bob.