Paycom Software, Inc. (PAYC): Business Model Canvas [Dec-2025 Updated]

You're looking at a Human Capital Management powerhouse, and frankly, Paycom Software, Inc.'s 2025 blueprint is built to last. We're talking about a model where nearly all revenue is subscription-based, driving expected 2025 sales between $2.045 billion and $2.055 billion while maintaining a lean 43% Adjusted EBITDA margin. The secret sauce isn't just the interest income on client funds; it's the proprietary single-database platform that locks in clients with a 90% annual revenue retention rate, thanks to error-slashing tools like Beti. This isn't just software; it's operational infrastructure. Dive below to see the nine building blocks that engineer this performance.

Paycom Software, Inc. (PAYC) - Canvas Business Model: Key Partnerships

You're looking at how Paycom Software, Inc. builds trust and expands reach through its network, which is crucial when your core value is a single, unified system. Honestly, for a company that prides itself on not needing many external integrations, the partnerships they do maintain are highly strategic, focusing on security validation and market access.

Technology Partners for Platform Integrations and Security

Because Paycom Software, Inc. built its solution on a single database, the need for extensive third-party technology integrations (stitching different systems together) is intentionally minimized. This architecture is a key differentiator against competitors who rely on bolted-on modules. However, security validation is paramount, so the partnerships here are less about feature integration and more about rigorous external auditing.

Paycom Software, Inc. conforms to the CIS Cyber 18 control framework to inform its risk assessments. They protect data at rest using AES-256 encryption and data in transit with TLS encryption. They also maintain a 24/7/365 security command center to monitor threats against their platform, which serves approximately 37,500 clients as of year-end 2024.

Third-Party Auditors for ISO- and SOC-Certifications

This is where Paycom Software, Inc. puts its money where its mouth is regarding security and quality. They voluntarily undergo rigorous third-party examinations. These audits validate the integrity of their single-database approach and their operational resilience. If onboarding takes 14+ days, churn risk rises, so operational consistency is key.

Paycom Software, Inc. operates its own data centers and holds two of only 17 Tier IV certifications in the U.S., which is the highest award given by the Uptime Institute.

Certification/Audit Type	Standard/Focus	Frequency/Status
SOC 1 Examination	Internal controls over financial reporting	Published semiannually
SOC 2 Examination	Security, availability, processing integrity	Published annually
ISO/IEC 27001:2013	Information Security Management Systems	Certified
ISO/IEC 27701:2019	Privacy Information Management System	Certified
ISO 22301:2019	Business Continuity Management System	Certified
ISO 9001:2015	Quality Management Processes	Certified

Professional Associations and Franchise Networks for Referrals

Paycom Software, Inc. actively partners with various organizations to embed its solution within established networks. This strategy helps drive adoption through trusted channels, especially among independent owners who value compliance standardization. The goal is to make Paycom the default HR/payroll choice for the network's members.

Paycom Software, Inc. helps these groups streamline HR and payroll for independent owners, providing standardization to scale and real-time analytics to drive enterprise value for portfolio companies. The under 50 employee market represents about 3.5% of Paycom Software, Inc.'s revenue, but these smaller entities are often part of the franchise or association networks they target.

• Helps franchises ease onboarding and compliance.
• Provides standardization to scale for private equity portfolio companies.
• Keeps professional associations audit-ready for compliance support.
• Tech partners gain updated state and federal law compliance features.

High-Profile Brand Partnerships like the Sacramento Kings

These partnerships are less about direct technology integration and more about brand elevation and market visibility, especially to enterprise buyers. You want to see these translate into sales pipeline growth, even if the impact on near-term growth drivers is limited.

Paycom Software, Inc. announced a new partnership with the Sacramento Kings and Golden 1 Center as their official HR and payroll technology partner. They also sponsor the Oklahoma City Memorial Marathon's half-marathon and hold an exclusive partnership with the Paycom Center. Paycom Software, Inc. has also lined up major partnerships in the auto, tech, and music industries.

The company reported Q3 2025 revenue of $493.30 million, up 9.2% year-over-year, showing continued top-line momentum.

Private Equity Firms for Portfolio Company Standardization

For private equity firms, the value proposition centers on driving enterprise value across their holdings. Paycom Software, Inc. offers custom implementation to support growth from mergers and acquisitions, reinforcing compliance strategy with data accuracy. The more employees use the system, the greater the ROI, which Paycom Software, Inc. automatically measures and calculates its bottom-line impact using Ernst & Young data.

The company's annual revenue retention rate was 90% for both 2023 and 2024, indicating strong stickiness within their existing client base, which includes PE-backed entities. Analysts anticipate Paycom Software, Inc. will post $7.15 in EPS for the full fiscal year 2025.

Finance: draft 13-week cash view by Friday.

Paycom Software, Inc. (PAYC) - Canvas Business Model: Key Activities

You're looking at the core engine driving Paycom Software, Inc.'s performance as of late 2025. These aren't just tasks; they are the actions that generate the $483.6 million in total revenues reported for Q2 2025.

Continuous development of the single-database HCM platform

The foundation remains the single-database architecture. This design choice is key because it feeds the AI innovations. Paycom Software, Inc. spent $214.9 million on research and development in fiscal year 2024 to keep this platform ahead. The commitment continues, with plans for increased R&D spending in the second half of 2025 to accelerate adoption of new features.

The platform's core strength is its integration, which supports high client retention, reported at 99% in FY2024. This single system is what allows for the high-margin structure, with a trailing twelve months gross margin reported at 82.44%.

Sales force expansion, opening three new offices in early 2025

Expanding the sales footprint is a direct activity to drive new logo adds. Paycom Software, Inc. executed on opening three new offices in early 2025 as part of its market expansion strategy. The sales force is central to the business, aiming to capture more of the midsize business segment. Cities like Dallas, Oklahoma City, Manhattan, Fort Worth, and Plano show the most job openings for Paycom Sales roles, indicating where the expansion focus lies. The sales team is tasked with selling the efficiency gains from the automation suite.

AI/ML innovation for automation, including Beti and IWant

Innovation is a primary activity, focused heavily on Artificial Intelligence and Machine Learning. The IWant command-driven AI engine is now fully rolled out across the entire client base. This tool has already successfully responded to millions of queries from employees, managers, and executives. On the payroll side, Beti, the payroll automation solution, is a major differentiator.

The impact of these tools is quantifiable in efficiency gains:

• Beti reduces payroll processing labor by up to 90%.
• Beti cuts the time spent correcting payroll errors by up to 85%.
• IWant reduced HR service tickets by 25% in some analyses.

This AI-first strategy is designed to eclipse competitors in the HCM market.

Regulatory compliance and payroll tax management

Managing the complexity of payroll tax and compliance is a non-negotiable activity. Paycom Software, Inc. includes applications for Payroll Tax Management, Garnishment Administration, and GL Concierge as part of its core offering. The company's information security program is informed by the risk management framework defined by the ISO 27001 Information Security Management Standard. This focus is critical due to evolving privacy and cybersecurity laws.

Data center operations and security management

Keeping the single database secure and accessible requires significant operational investment. Paycom Software, Inc. invested approximately $100 million in AI-focused Capital Expenditures for data center expansion to support IWant and future AI developments in Q3 2025. The Chief Information Officer and IT Security teams oversee governance, risk, and compliance programs, reporting audit outcomes to the Board of Directors. The company maintains zero total debt as of June 30, 2025, supporting these operational expenditures through cash flow.

Here's a quick look at some key operational and financial metrics tied to these activities:

Key Metric	Value/Amount	Period/Context
Total Revenue (Q2 2025)	$483.6 million	Quarter Ended June 30, 2025
Adjusted EBITDA Margin (Q2 2025)	41.4%	Quarter Ended June 30, 2025
Recurring Revenue Percentage	94.1%	Q2 2025
FY2024 R&D Spend	$214.9 million	Fiscal Year 2024
Projected FY2025 Adjusted EBITDA	$872.0 million to $882.0 million	Full Year 2025 Guidance
Data Center CapEx (Q3 2025)	$100 million	Investment for AI support

Paycom Software, Inc. (PAYC) - Canvas Business Model: Key Resources

The core strength of Paycom Software, Inc. resides in its proprietary technology and the financial assets it manages through its platform.

Proprietary, single-database Human Capital Management (HCM) software is the foundation. This architecture, which combines all HR and payroll data in one place, is designed to eliminate data inconsistencies associated with integrating multiple systems. The platform includes modules for payroll processing, talent acquisition, performance management, and learning management. The company reinvested heavily in its technology, with Research and Development expenses reported at $242.6 million for fiscal year 2024.

The resource base is significantly enhanced by AI-driven automation tools like Beti and IWant. The award-winning payroll solution, Betty, is cited as reducing payroll processing labor by up to 90% and cutting the time spent correcting payroll errors by up to 85%. This automation drives service operation efficiency, resulting in a reported 20% to 30% year-over-year decline in internal tickets and inbound client call volume as of Q3 2025.

The company maintains an extensive U.S. sales force and physical office network to drive adoption. Paycom Software, Inc. opened three new sales offices in January 2025, continuing its plan to expand its physical footprint to support sales execution.

A significant financial resource is the client funds held for payroll and tax processing. As of the third quarter of 2025, the average daily balance on these funds was approximately $2.5 billion, marking a 9% year-over-year increase. The revenue generated from these funds is a key component of the overall financial structure.

The balance sheet provides a strong liquidity position, with cash and cash equivalents of $375.0 million as of Q3 2025 (September 30, 2025). Furthermore, Paycom Software, Inc. reported Total Debt of $0 as of that same date. The operating cash flow generated in the third quarter of 2025 was approximately $177.8 million.

Here's a quick look at the financial scale supporting these resources as of the third quarter of 2025:

Financial Metric	Amount/Value	Period/Date
Cash and Cash Equivalents	$375.0 million	September 30, 2025
Average Daily Client Funds Balance	$2.5 billion	Q3 2025
Total Debt	$0	September 30, 2025
Total Revenues	$493.3 million	Q3 2025
Recurring and Other Revenues Percentage of Total	94.6%	Q3 2025
Full-Year Guidance: Interest on Funds Held for Clients	$113 million	Full Year 2025 Estimate

The platform's reliance on its single database architecture is complemented by its ability to generate revenue from client float, which is projected to yield approximately $113 million in interest for the full year 2025. The recurring revenue stream, which constituted 94.6% of total revenues in Q3 2025 at $466.5 million, demonstrates the sticky nature of this core resource.

• Proprietary single-database HCM software platform.
• AI automation tools like Betty reducing labor by up to 90%.
• Sales force driving expansion with three new offices in January 2025.
• $375.0 million in cash and cash equivalents on the balance sheet.
• Managing an average daily float of $2.5 billion in client funds.

Paycom Software, Inc. (PAYC) - Canvas Business Model: Value Propositions

You're looking at the core promises Paycom Software, Inc. makes to its customers-the reasons they choose one true single-database Human Capital Management (HCM) system over the fragmented setups many still use. Honestly, the value is in the automation that drives out the cost of manual work.

Employee-driven payroll (Beti) reducing errors by up to 85%.

Beti, Paycom Software, Inc.'s employee-guided payroll experience, is a major differentiator. It shifts the responsibility for initial data entry and review to the employee, which drastically cuts down on downstream fixes. A Forrester Consulting study showed that using the single HR software featuring Beti reduced time spent correcting payroll errors by a verified 85%. This is a concrete number that speaks directly to reducing rework.

Unified, single-database HCM system for all HR functions.

Paycom Software, Inc. runs on a true single database, which is key to data integrity. To give you context on the problem this solves, a Forrester study found that companies often use an average of 6.17 HCM providers. Furthermore, 80% of HR leaders surveyed indicated that having disparate or duplicate employee data negatively impacts their ability to create accurate workforce reports. Paycom Software, Inc.'s architecture avoids this by keeping all HR and payroll data in one place.

Significant reduction in HR administrative labor (up to 90% in payroll processing).

The automation Paycom Software, Inc. delivers translates directly into saved labor hours. For payroll processing specifically, Beti lowered the required labor by 90% in a composite organization analysis. Beyond payroll, a Forrester Total Economic Impact study on a composite organization showed over 45% in total time saved by HR annually. This efficiency is so significant that, as of the third quarter of 2025, the company disclosed a reduction of approximately 500 administrative employees across its client base as a direct result of automation. Here's the quick math on the cost of not automating: the average cost of manual data entry by an HR professional reached $4.86 per instance in 2025.

Proactive compliance and real-time data accuracy.

Real-time data accuracy is a byproduct of the single database, which helps with compliance tasks that used to eat up time. That same Forrester study noted an 80% reduction in time spent on compliance work for the composite organization. When looking at the benefits of a unified system, 84% of respondents believed it would positively impact their business goals, with improved data accuracy being the top expected benefit. This proactive stance helps avoid costly manual lookups; for instance, manually obtaining information to compare benefit plans could cost as high as $23.27 per instance according to EY estimates.

AI-powered command-driven employee support (IWant).

The introduction of IWant, the command-driven AI engine, adds another layer of immediate value. By Q3 2025, IWant had 'already successfully responded to millions of queries from employees, managers and executives.' This instant access eliminates the time HR or managers spend searching for data. Without IWant, the estimated labor cost for an HR or manager searching for employee information is $11.75 per instance. This is a clear value exchange: you invest in the AI, and you immediately save on the labor cost of information retrieval.

You can see how these value propositions stack up against the financial reality of Paycom Software, Inc. as of late 2025. For example, the company projected full-year 2025 total revenue between $2.045 billion and $2.055 billion, with an expected Adjusted EBITDA margin of approximately 43% at the midpoint. The commitment to these value drivers is reflected in their balance sheet, which showed $375 million in cash and cash equivalents and $0 total debt as of September 30, 2025.

Here is a summary of the quantified benefits from the Forrester Consulting study on a composite organization:

Metric	Quantified Benefit	Timeframe/Basis
Reduction in Time Correcting Payroll Errors	85%	With Beti
Reduction in Labor for Payroll Processing	90%	With Beti
Total Time Saved by HR Annually	Over 45%	Composite Organization
Reduction in Time Spent on Compliance Work	80%	Composite Organization
Estimated Labor Cost Per Information Search (Without IWant)	$11.75	Per Instance

The overall value proposition is built on tangible, measurable efficiency gains, which is why the composite organization in the Forrester study saw a three-year Return on Investment (ROI) of 362%. Finance: draft 13-week cash view by Friday.

Paycom Software, Inc. (PAYC) - Canvas Business Model: Customer Relationships

You're looking at how Paycom Software, Inc. keeps its clients close and satisfied in late 2025, which is key when you consider their expected full-year 2025 revenue guidance is between $2.045 billion and $2.055 billion. The relationship strategy leans heavily on personalized attention backed by powerful automation.

Dedicated, high-touch sales and implementation teams

Paycom Software, Inc. structures its client engagement around dedicated personnel from the start. They offer hands-on implementation, analyzing client needs and goals to provide tailored solutions. This high-touch approach is supported by a growing sales footprint; in January 2025, Paycom expanded by opening three new sales offices in Raleigh, North Carolina; Los Angeles, California; and Providence, Rhode Island. This physical expansion supports the relationship-driven sales model. The company prides itself on service excellence, evidenced by winning the G2 Best Support Spring 2025 award.

The structure includes:

• Assigning a single point of contact, a dedicated specialist who knows the client's business.
• Using in-house receptionists to answer all calls during business hours and direct clients immediately.
• Providing ongoing best-practice consultation and training at no extra charge.

Consultative service model for mid-market clients

While the search results don't explicitly detail a separate 'mid-market' tier service, the entire service model is inherently consultative, focusing on maximizing Return on Investment (ROI) through deep product adoption. For example, a Forrester Total Economic Impact study on a composite client showed a three-year 362% ROI after deploying Paycom's full-solution automation. This consultative focus ensures clients move beyond basic payroll to leverage the full HCM suite, which is critical for retention. The company's commitment to client success is recognized, as Paycom Software, Inc. was named one of the Most Trustworthy Companies in America 2025 by Newsweek and Statista.

Self-service and automation via the Beti and IWant platforms

Automation is central to reducing client effort and driving value, which strengthens the relationship by delivering tangible time and cost savings. The employee-guided payroll experience, Beti, is a major differentiator, reportedly reducing payroll processing labor by up to 90% and cutting the time spent correcting errors by up to 85%. Furthermore, the command-driven AI engine, IWant, which fully rolled out across the client base in 2025, has already successfully responded to millions of queries from employees, managers, and executives as of Q3 2025. This AI adoption also translated to operational efficiency for Paycom Software, Inc. itself, with IWant reducing HR service tickets by 25% in Q2 2025.

Here's a snapshot of the operational metrics supporting the value proposition as of late 2025:

Metric	Value/Range (Latest Available)	Reporting Period/Context
Full Year 2025 Revenue Guidance Midpoint	$2.050 billion	Guidance as of Q3 2025
Full Year 2025 Adjusted EBITDA Margin Guidance Midpoint	43%	Guidance as of Q3 2025
Q3 2025 Total Revenues	$493 million	Q3 2025 Results
Q3 2025 Recurring and Other Revenues	$466.5 million	Q3 2025 Results (Up 10.6% YoY)
Cash and Cash Equivalents	$375.0 million	As of September 30, 2025
Total Debt	$0	As of September 30, 2025

High annual revenue retention rate of 90%

Client stickiness is a hallmark of the business model, directly reflecting the perceived value of the integrated platform. The annual revenue retention rate for the year ended December 31, 2024, was 90%, which was consistent with the prior year. This high rate is supported by the success of automation tools; one study noted Beti achieved a 99% client retention rate in the context of its usage benefits. The company ended 2024 with a total client count of 37,543, an increase of 2% year-over-year.

Client Action Center for ongoing support

Ongoing support is delivered through a combination of dedicated human interaction and digital resources. Beyond the initial implementation specialist, clients have access to the Help Center inside the software for administrators seeking information on configuration and best practices at any time. This digital resource is augmented by smart AI serving relevant articles. The commitment to live support means that when a client calls, they are directed to a real, knowledgeable person within seconds, avoiding phone trees or queues, which is a key component of their 'world-class service' claim.

Paycom Software, Inc. (PAYC) - Canvas Business Model: Channels

You're looking at how Paycom Software, Inc. gets its product in front of clients and how clients interact with the service. This is all about the touchpoints, from the first sales call to daily employee use.

The direct sales effort relies on a physical presence across the U.S. to drive new logo acquisition. The company complements this with digital access points for existing users.

• Direct in-house sales force supported by a network of offices, including headquarters in Oklahoma City and regional/inside sales offices in key U.S. markets like Texas, Illinois, Michigan, and Missouri.
• Online platform and mobile application for client and employee access, which has contributed to a 20% to 30% year-over-year decline in internal tickets and inbound client call volume as of Q3 2025.
• National advertising campaigns to build brand awareness, with marketing spend ramping up in Q3 2025 to support the launch of the iOne platform.
• Preferred partner network for referrals.
• Investor Relations and press room for corporate communication, maintaining transparency with stakeholders.

The investment in these channels is reflected in the financial results. For instance, the Sales and marketing operating expense for the third quarter of 2025 was reported at $19.1 million.

The scale of the digital channel can be inferred from the user base and platform activity. As of fiscal 2024, Paycom Software, Inc. serviced slightly over 37,500 customers and stored data on over 7 million employees. Furthermore, the AI-powered product, IWant, had already successfully responded to millions of queries from employees, managers, and executives by the end of Q3 2025.

Here's a quick look at the revenue context surrounding these distribution and access points for the third quarter of 2025:

Metric	Q3 2025 Amount	Year-over-Year Change
Total Revenues	$493 million	9.1% increase
Recurring and Other Revenues	$467 million	10.6% increase
Sales and Marketing Expense	$19.1 million	Increase from $13.6 million in Q3 2024
Adjusted EBITDA Margin	39%	Increase of 150 basis points

The full-year 2025 guidance reinforces the expected scale of the business being reached through these channels, projecting total revenues in the range of $2.045 billion to $2.055 billion.

The platform's ability to handle high volume efficiently is a key channel benefit. The company's Q3 2025 Adjusted EBITDA margin reached 39%, showing operational leverage on the revenue generated through these channels.

• Client base as of FY 2024: slightly over 37,500 customers.
• Employee records stored as of FY 2024: over 7 million.
• IWant queries responded to by Q3 2025: millions.

Finance: confirm the Q4 2025 Sales & Marketing budget allocation by next Tuesday.

Paycom Software, Inc. (PAYC) - Canvas Business Model: Customer Segments

You're looking at who Paycom Software, Inc. (PAYC) is actually selling its single-database Human Capital Management (HCM) platform to. Honestly, the focus is sharp, which is key for a company that prides itself on deep automation like Beti.

The core target here is clearly defined, though the company is seeing some pull upmarket. Paycom Software, Inc. focuses on Small-to-Medium Businesses (SMBs) with 50 to 5,000 employees. To be fair, management has noted they are being pulled more upmarket, but the primary focus remains in this mid-market space, though they do have a smaller segment, with the under 50 employee market representing about 3.5% of their revenue as of late 2024.

Geographically, Paycom Software, Inc. is heavily concentrated in the U.S. While they serve businesses internationally, the vast majority of the customer base is U.S.-based companies, which aligns with the requirement of representing over 97% of the customer base, though the search results confirm a strong domestic presence, noting Paycom currently has 5% market share within the US. This concentration helps them maintain control over compliance and service delivery, which is critical for payroll.

The sheer volume of clients gives you a sense of scale. As of December 31, 2024, Paycom Software, Inc. had approximately 37,543 total clients when counted on a taxpayer identification number or client code basis. This base generated $1,883.2 million in Total Revenues for the full year 2024.

The ideal customer is one that needs to move away from integrating multiple systems. These are industries seeking full-suite HR automation and compliance, where the administrative burden of manual processes is high. Furthermore, they attract clients with complex payroll needs across multiple states because the single-database architecture is built to handle that complexity seamlessly.

Here's a quick look at the key customer metrics we have for the end of 2024:

Metric	Value/Range	Data Source Year
Total Clients (TIN/Client Code Basis)	37,543	2024 Year-End
Targeted Employee Size Range	50 to 10,000 employees (Primary Target)	2025
US Market Share	5%	2024
Annual Revenue Retention Rate	90%	2024
Total FY 2024 Revenue	$1,883.2 million	2024

The types of businesses that see the most immediate ROI are those that can leverage the automation features across their workforce. You see this reflected in the high retention rate, which management suggests understates true loyalty because it gets reduced by clients who are acquired or cease operations entirely.

The profile of the customer Paycom Software, Inc. is winning looks like this:

• Companies prioritizing a single, integrated HCM platform.
• Organizations where payroll errors and manual data entry are significant cost centers.
• Businesses with multi-state operations needing consistent, centralized compliance.
• Clients seeking to empower employees with direct access to their own HR data.
• Firms with over 500 employees showed 11% year-over-year client count growth in 2023.

If onboarding takes 14+ days, churn risk rises, so the speed of implementation is a key factor for these segments.

Finance: draft 13-week cash view by Friday.

Paycom Software, Inc. (PAYC) - Canvas Business Model: Cost Structure

You're looking at the major drains on Paycom Software, Inc.'s cash flow as of late 2025. Honestly, running a high-growth, direct-sales SaaS business like this means you're spending heavily on acquiring and supporting customers, plus you're pouring money into the tech itself.

High cost of Sales and Marketing for the direct sales model is a primary driver. The direct sales approach requires a large, well-compensated sales force to land new logos, which hits the income statement hard. For the twelve months ending September 30, 2025, Selling, General, and Administrative (SG&A) expenses totaled $734 million. To be fair, management indicated they planned to increase marketing budgets in the back half of the year to support the IWant product launch.

Significant Research and Development (R&D) investment shows the commitment to staying ahead in automation and AI. For the twelve months ending September 30, 2025, Paycom Software, Inc.'s R&D expenses reached $278 million. This investment is clearly tied to product differentiation, like the Beti payroll automation solution and the IWant AI engine. For the third quarter ending September 30, 2025, the quarterly R&D expense was $74.10 million.

The company is making concrete, large-scale investments in its infrastructure. You see this in the Capital expenditure of about $100 million in 2025 for AI-focused data center expansion. This specific CapEx was noted in the third quarter of 2025 to support IWant and future AI developments, which the CEO views as a sustainable competitive advantage.

Payroll and benefits for a large employee base is baked into both operating expenses and G&A. Historically, revenue growth and expansion drove increases in headcount, leading to higher salaries, benefits, and facility costs. While a standalone 2025 payroll figure isn't isolated here, the sheer size of the Sales & Marketing and G&A lines reflects this significant personnel cost.

General and administrative expenses for corporate overhead are substantial, covering everything from compliance to corporate functions. For the first quarter of 2025, Total administrative expenses were reported at $260.8 million. Looking at more recent quarterly data, Administrative expenses for the third quarter ending September 30, 2025, were $125.7 million. This is a major fixed cost component you need to factor in.

Here's a breakdown of some key operating expense components based on recent reported periods:

Expense Category	Latest Reported Period	Amount (in millions USD)
SG&A Expenses (TTM)	Twelve Months ending September 30, 2025	$734.0
Research & Development (TTM)	Twelve Months ending September 30, 2025	$278.0
Administrative Expenses (Quarterly)	Q3 2025 (ending September 30, 2025)	$125.7
Sales and Marketing (Quarterly)	Q3 2025 (ending September 30, 2025)	$125.7
AI-Focused Data Center CapEx	Q3 2025 Investment	$100.0

The cost structure is heavily weighted toward growth and innovation. You can see the pressure points:

• Direct sales force compensation and travel costs.
• Sustained high investment in R&D for AI features.
• Significant, one-time-like CapEx for proprietary data centers.
• The overhead required to support a growing, multi-product platform.

Finance: draft 13-week cash view by Friday.

Paycom Software, Inc. (PAYC) - Canvas Business Model: Revenue Streams

You're looking at the engine room of Paycom Software, Inc. (PAYC) financials, and honestly, it's built for stability. The primary driver here is the subscription model, which is exactly what you want to see in a Software-as-a-Service business.

Recurring and other revenue from subscription services is pegged at approximately 90% of total revenue, giving the business a very solid, predictable foundation. This recurring base is defintely the core of the business, but the float income is still a material contributor.

For the full fiscal year 2025, Paycom Software, Inc. expects total revenue to land in a tight range between $2.045 billion and $2.055 billion. This guidance suggests year-over-year growth of approximately 9% at the midpoint.

The revenue streams break down into a few key areas:

• Recurring and other revenue from subscription services, expected to grow approximately 10% year-over-year for FY2025.
• Interest income on funds held for clients, which is projected to be approximately $113 million for the full year 2025.
• Implementation and professional service fees, which make up the remainder of the revenue not captured by the subscription base or client fund interest.

To give you a concrete look at how this played out recently, here's the quick math from the third quarter of 2025:

Revenue Component	Q3 2025 Amount (USD Millions)	Percentage of Total Revenue (Q3 2025)
Total Revenues	493.3	100%
Recurring & Other Revenue	466.5	94.6%
Interest on Funds Held for Clients	26.8	5.4%

The interest income projection of $113 million for 2025 is notable, though it is projected to be down about 10% year-over-year from the prior period, assuming rate cuts. Still, that's a material, non-subscription-based cash flow component.

Profitability metrics also reflect the strength of this model. Paycom Software, Inc. expects the Adjusted EBITDA margin to be approximately 43% at the midpoint for 2025. This margin expansion is driven by automation and operational efficiencies, which is key to translating high recurring revenue into strong bottom-line results.

Here are the key financial expectations for the 2025 fiscal year:

• Total Expected Revenue Range: $2.045 billion to $2.055 billion.
• Projected Interest Income on Client Funds: $113 million.
• Expected Adjusted EBITDA Margin (Midpoint): Approximately 43%.
• Recurring Revenue Share: Approximately 90% of total.

Finance: draft 13-week cash view by Friday.