Paycom Software’s Amazing Performance in 3 Charts — The Motley Fool

Paycom Software (NYSE:PAYC) reported its latest outstanding quarter in August. Investors cheered the results, which included record revenue and adjusted EBITDA, helping propel the stock to recent all-time highs. With the fiscal year now half over, let’s take a look at how 2017 is playing out for the payroll and workforce management software provider compared to previous years.

Image source: Paycom Software. 

Revenue growth is slowing, but still mighty impressive

Paycom’s revenue growth is a sight to behold, rising from $76.8 million in 2012 to $329.1 million in 2016. How many companies have you seen grow revenue at rates north of 40% for four consecutive years?

Data source: Company Financials. Chart by the author.

As the company continues to scale up, that rate of growth will invariably moderate. And 2017 has a tough act to follow. Fiscal years 2015 and 2016 both received a good-sized revenue boost from a surge of new clients seeking compliance with the Affordable Care Act.

Even with that tailwind gone, 2017 revenue growth looks like it will still manage to clear the company’s long-term target of 30%. The company’s most recent guidance is for full-year revenue of $429.5 million to $431.5 million, representing 30.8% growth at the midpoint. And there’s plenty of growth still on the horizon. Paycom continues to aggressively open sales offices, marching steadily toward an annual sales capacity of somewhere between $730 million and $1 billion.

The margin trend is rock solid

Adjusted EBITDA margin measures a company’s operating profitability as a percentage of its revenue. As the company has grown, its adjusted EBITDA margin has increased substantially, from 16.7% in 2012 to 28.7% in 2016.

Data source: Company Financials. Chart by author.

In an attempt to maximize its top-line growth, Paycom announced earlier this year that it was making large investments in research and development,…

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