Paycom’s fourth quarter results met Wall Street’s revenue and non-GAAP profit expectations but were met with a negative market reaction, as shares fell following the release. Management attributed the quarter’s performance to continued investment in full solution automation, which includes advanced AI-driven tools and increased adoption of its “IWant” and “Beti” platforms. CEO Chad Richison highlighted that automation initiatives contributed to a record number of returning clients and improved revenue retention, which reached 91%. However, the company’s operating margin declined year over year, reflecting ongoing investment in sales and service capacity.

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While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions From Paycom’s Q4 Earnings Call

• Raimo Lenschow (Barclays): asked why guidance suggests slower growth despite product success and improved retention. CEO Chad Richison responded that bookings have continued to increase and guidance reflects what management can “see right now.”
• Samad Samana (Jefferies): inquired about contributors to the 7-8% recurring revenue growth outlook and possible upside. Richison emphasized new client acquisitions as the largest growth driver and highlighted ongoing investments in sales capacity.
• Mark Marcon (Baird): questioned whether slower growth reflects macro trends or sales execution. Richison said there is no change in customer demand but acknowledged the focus on sales training to ensure prospects grasp the full value of automation.
• Jason Celino (KeyBanc): asked about the impact of new sales offices and returning customers on client growth. Richison confirmed that new offices ramped quickly but overall growth was broad-based, with both new and returning clients contributing.
• Jared Levine (TD Cowen): pressed for details on retention assumptions in the 2026 outlook and potential for further improvement. Richison declined to disclose specific retention targets but reiterated the company’s focus on continued usage and value delivery.

Catalysts in Upcoming Quarters

In the coming quarters, our analyst team will monitor (1) Paycom’s ability to accelerate new client acquisitions following sales leadership changes and expanded training, (2) increased adoption and monetization of automation products, especially among larger enterprises, and (3) sustained improvements in revenue retention. Developments in macroeconomic conditions and the company’s pace of product innovation will also be important to watch.

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