PAYC 2Q26 Preview: Building, Not Raising

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PAYC 2Q26 Preview: Building, Not Raising

July 20, 2026

Jacob Smith jacob.smith@guggenheimpartners.com PAYC 2Q26 Preview: Building, Not Raising

212 518 9286

John DiFucci Key Message: We expect Paycom to deliver modest upside to 2Q26 Recurring and other

john.difucci@guggenheimpartners.com revenue and view the numerical setup as favorable into the print. Consensus implies

212 518 9670 a larger New ARR decline than we’re modeling, and we view the bar as achievable

given implementations run 6-12 weeks, making 2Q revenue largely a function of 4Q25

bookings signed ahead of the December/January sales retraining. We also see room for

upside to margin and EPS from operational efficiencies, sales turnover, and continued

share repurchases, though likely to a lesser extent than the $1.1B bought back in 1Q.PAYC BUY On 2026 guidance, we believe PAYC could raise the low end of the 7-8% full-year Paycom Software, Inc.

Sector: Software range on first half outperformance but view a raise to the high end as less likely

given second half weighted bookings and new sales reps ramping. We’d also

Earnings Preview question whether the stock would be rewarded for a raise that potentially introduces a

higher bar in the back half in the eyes of investors. Growth should accelerate in 3Q on Share Price $149.71

an extra Wednesday before stepping down in 4Q. All things considered, our thesis is Price Target $180.00

largely unchanged with differentiated single-database automation, structurally attractive

margins, and meaningful runway in the 50-5,000 employee cohort while trading at 4x

EV/NTM recurring revenue. We continue to view the sales retraining and second half Revenue ($M)

(FY DEC) 1Q 2Q 3Q 4Q FY weighted bookings as a key area to monitor but if bookings do accelerate, along with