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