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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______

Commission File Number: 001-36393

Paycom Software, Inc.

(Exact name of registrant as specified in its charter)

     Delaware
(State or other jurisdiction 
of incorporation or organization)

     80-0957485
(I.R.S. Employer 
Identification No.)

     7501 W. Memorial Road
Oklahoma City, Oklahoma
(Address of principal executive offices)

     73142
 (Zip Code)

Registrant’s telephone number, including area code: (405) 722-6900

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	PAYC	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of October 28, 2025, there were 56,269,005 shares of common stock, par value of $0.01 per share, outstanding, including 1,362,888 shares of restricted stock.

Paycom Software, Inc.

Table of Contents


	PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements	3
	Unaudited Consolidated Balance Sheets	3
	Unaudited Consolidated Statements of Comprehensive Income	4
	Unaudited Consolidated Statements of Stockholders’ Equity	5
	Unaudited Consolidated Statements of Cash Flows	6
	Notes to the Unaudited Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	32
Item 4.	Controls and Procedures	32
	PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	33
Item 1A.	Risk Factors	33
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	34
Item 5.	Other Information	34
Item 6.	Exhibits	35
	Signatures	36

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Paycom Software, Inc.

Unaudited Consolidated Balance Sheets

(in millions, except per share amounts)


	September 30, 2025			December 31, 2024
Assets
Current assets:
Cash and cash equivalents	$	375.0		$	402.0
Accounts receivable		50.4			39.2
Prepaid expenses		63.0			44.4
Inventory		1.8			1.4
Income tax receivable		77.3			11.9
Deferred contract costs		154.6			140.4
Current assets before funds held for clients		722.1			639.3
Funds held for clients		1,819.9			3,665.5
Total current assets		2,542.0			4,304.8
Property and equipment, net		659.8			561.4
Intangible assets, net		40.9			46.2
Goodwill		51.9			51.9
Long-term deferred contract costs		838.3			783.6
Operating lease right-of-use assets		79.7			80.6
Other assets		32.6			31.4
Total assets	$	4,245.2		$	5,859.9
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	20.4		$	23.9
Accrued commissions and bonuses		24.3			33.0
Accrued payroll and vacation		54.6			59.0
Deferred revenue		29.9			30.0
Operating lease liabilities		23.4			20.4
Accrued expenses and other current liabilities		106.0			74.8
Current liabilities before client funds obligation		258.6			241.1
Client funds obligation		1,819.9			3,665.7
Total current liabilities		2,078.5			3,906.8
Deferred income tax liabilities, net		259.3			149.7
Long-term deferred revenue		121.2			114.6
Long-term operating lease liabilities		61.1			63.0
Other long-term liabilities		15.7			49.9
Total long-term liabilities		457.3			377.2
Total liabilities		2,535.8			4,284.0
Commitments and contingencies (Note 12 “Commitments and Contingencies”)
Stockholders’ equity:
Common stock, $0.01 par value (100.0 shares authorized, 63.5 and 63.0 shares issued at September 30, 2025 and December 31, 2024, respectively; 55.3 and 55.9 shares outstanding at September 30, 2025 and December 31, 2024, respectively)		0.6			0.6
Additional paid-in capital		843.3			724.8
Retained earnings		2,162.5			1,887.5
Accumulated other comprehensive earnings (loss)		0.4			(0.6	)
Treasury stock, at cost (8.2 and 7.1 shares at September 30, 2025 and December 31, 2024, respectively)		(1,297.4	)		(1,036.4	)
Total stockholders’ equity		1,709.4			1,575.9
Total liabilities and stockholders’ equity	$	4,245.2		$	5,859.9

See accompanying notes to the unaudited consolidated financial statements.

Paycom Software, Inc.

Unaudited Consolidated Statements of Comprehensive Income

(in millions, except per share amounts)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
Revenues
Recurring and other	$	466.5		$	421.8		$	1,421.6		$	1,293.4
Interest on funds held for clients		26.8			30.1			85.8			95.9
Total revenues		493.3			451.9			1,507.4			1,389.3
Cost of revenues
Operating expenses		64.1			70.8			198.8			201.9
Depreciation and amortization		21.3			17.5			58.8			48.9
Total cost of revenues		85.4			88.4			257.6			250.9
Administrative expenses
Sales and marketing		125.7			104.5			352.6			326.9
Research and development		74.1			63.0			211.2			175.9
General and administrative		71.9			70.6			207.8			92.6
Depreciation and amortization		23.6			20.5			68.1			57.2
Total administrative expenses		295.3			258.7			839.7			652.6
Total operating expenses		380.7			347.1			1,097.3			903.5
Operating income		112.6			104.9			410.1			485.8
Interest expense		(1.1	)		(0.8	)		(2.7	)		(2.4	)
Other income (expense), net		41.3			4.2			52.9			14.0
Income before income taxes		152.8			108.3			460.3			497.5
Provision for income taxes		42.1			35.0			120.7			109.1
Net income	$	110.7		$	73.3		$	339.6		$	388.4
Earnings per share, basic	$	1.97		$	1.31		$	6.06		$	6.90
Earnings per share, diluted	$	1.96		$	1.31		$	6.02		$	6.89
Weighted average shares outstanding:
Basic		56.1			55.9			56.1			56.3
Diluted		56.4			56.0			56.4			56.4
Comprehensive earnings:
Net income	$	110.7		$	73.3		$	339.6		$	388.4
Unrealized net gains on available-for-sale securities		0.4			0.1			0.9			1.3
Tax effect		(0.2	)		—			0.1			(0.4	)
Other comprehensive income, net of tax		0.2			0.1			1.0			0.9
Comprehensive earnings	$	110.9		$	73.4		$	340.6		$	389.3

See accompanying notes to the unaudited consolidated financial statements.

Paycom Software, Inc.

Unaudited Consolidated Statements of Stockholders’ Equity

(in millions)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
Common stock:
Balance at beginning of period	$	0.6		$	0.6		$	0.6		$	0.6
Vesting of restricted stock		—			—			—			—
Balance at end of period		0.6			0.6			0.6			0.6

Additional paid-in capital:
Balance at beginning of period		801.9			667.2			724.8			724.4
Stock-based compensation		40.2			30.7			117.3			(26.6	)
Employee stock purchase program		1.2			—			1.2			—
Balance at end of period		843.3			697.9			843.3			697.9

Retained earnings:
Balance at beginning of period		2,073.3			1,743.6			1,887.5			1,470.0
Net income		110.7			73.3			339.6			388.4
Dividends declared ($0.375 per share)		(21.5	)		(21.4	)		(64.6	)		(62.9	)
Balance at end of period		2,162.5			1,795.5			2,162.5			1,795.5

Accumulated other comprehensive earnings (loss):
Balance at beginning of period		0.2			(0.3	)		(0.6	)		(1.0	)
Other comprehensive earnings, net of tax		0.2			0.1			1.0			0.9
Balance at end of period		0.4			(0.2	)		0.4			(0.2	)

Treasury stock:
Balance at beginning of period		(1,074.1	)		(984.6	)		(1,036.4	)		(891.0	)
Repurchases of common stock		(225.6	)		(44.6	)		(263.3	)		(138.1	)
Employee stock purchase program		2.3			—			2.3			—
Balance at end of period		(1,297.4	)		(1,029.2	)		(1,297.4	)		(1,029.2	)
Total stockholders' equity	$	1,709.4		$	1,464.7		$	1,709.4		$	1,464.7


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Common stock:
Shares at beginning of period		63.5		62.9		63.0		62.7
Vesting of restricted stock		—		—		0.5		0.2
Shares at end of period		63.5		62.9		63.5		62.9

Treasury stock:
Shares at beginning of period		7.2		6.7		7.1		6.1
Repurchases of common stock		1.0		0.3		1.2		0.9
Employee stock purchase program(1)		—		—		—		—
Shares at end of period		8.2		7.0		8.2		7.0
Shares outstanding at end of period		55.3		55.9		55.3		55.9

(1)

During the nine months ended September 30, 2025, we issued 15,529 shares of common stock from treasury shares for purchases under our employee stock purchase program.

See accompanying notes to the unaudited consolidated financial statements.

Paycom Software, Inc.

Unaudited Consolidated Statements of Cash Flows

(in millions)


	Nine Months Ended September 30,
	2025			2024
Cash flows from operating activities
Net income	$	339.6		$	388.4
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		126.9			106.2
Stock-based compensation expense		91.8			(45.5	)
Amortization of debt issuance costs		1.1			0.8
Gain on disposition of property and equipment		(0.1	)		—
Accretion of discount on available-for-sale securities		(9.2	)		(0.1	)
Non-cash marketing expense		0.9			1.2
Deferred income taxes, net		109.6			(3.8	)
Gain on modification of naming rights agreement		(35.6	)		—
Other		0.5			(0.1	)
Changes in operating assets and liabilities:
Accounts receivable		(11.2	)		(4.1	)
Prepaid expenses		(16.9	)		(8.0	)
Inventory		(0.4	)		0.9
Other assets		(2.3	)		(1.7	)
Deferred contract costs		(65.5	)		(84.4	)
Income taxes, net		(65.4	)		8.1
Accounts payable		(2.8	)		13.1
Accrued commissions and bonuses		(8.7	)		(7.1	)
Accrued payroll and vacation		(4.4	)		(6.6	)
Deferred revenue		6.5			11.8
Accrued expenses and other liabilities		26.5			3.9
Net change in operating right-of-use assets and operating lease liabilities		1.9			0.6
Net cash provided by operating activities		482.8			373.5
Cash flows from investing activities
Purchases of investments from funds held for clients		(711.9	)		(24.9	)
Proceeds from investments from funds held for clients		250.0			200.0
Purchases of property and equipment		(197.4	)		(141.5	)
Proceeds from sale of property and equipment		0.1			—
Net cash (used in) provided by investing activities		(659.2	)		33.5
Cash flows from financing activities
Repurchases of common stock		(218.9	)		(122.8	)
Withholding taxes paid related to net share settlements		(42.4	)		(14.4	)
Dividends paid		(64.1	)		(63.7	)
Proceeds from employee stock purchase plan		3.0			—
Net change in client funds obligation		(1,845.8	)		(888.4	)
Net cash used in financing activities		(2,168.2	)		(1,089.3	)
Decrease in cash, cash equivalents, restricted cash and restricted cash equivalents		(2,344.6	)		(682.3	)
Cash, cash equivalents, restricted cash and restricted cash equivalents
Cash, cash equivalents, restricted cash and restricted cash equivalents, beginning of period		4,042.8			2,422.8
Cash, cash equivalents, restricted cash and restricted cash equivalents, end of period	$	1,698.2		$	1,740.5

See accompanying notes to the unaudited consolidated financial statements.

Paycom Software, Inc.

Unaudited Consolidated Statements of Cash Flows, continued

(in millions)


	Nine Months Ended September 30,
	2025		2024
Reconciliation of cash, cash equivalents, restricted cash and restricted cash equivalents
Cash and cash equivalents	$	375.0	$	325.8
Restricted cash included in funds held for clients		1,323.2		1,414.7
Total cash, cash equivalents, restricted cash and restricted cash equivalents, end of period	$	1,698.2	$	1,740.5

Supplemental disclosures of cash flow information:
Non-cash investing and financing activities:
Purchases of property and equipment, accrued but not paid	$	6.0	$	3.6
Stock-based compensation for capitalized software	$	20.4	$	13.9
Right-of-use assets obtained in exchange for operating lease liabilities	$	13.2	$	17.5

See accompanying notes to the unaudited consolidated financial statements.

Paycom Software, Inc.

Notes to the Unaudited Consolidated Financial Statements

(tabular dollars and shares in millions, except per share and per unit amounts)

ORGANIZATION AND DESCRIPTION OF BUSINESS

Paycom Software, Inc. (“Software”), together with its wholly owned subsidiaries (collectively, the “Company”), is a leading provider of a comprehensive, cloud-based human capital management (“HCM”) solution delivered as Software-as-a-Service. Unless we state otherwise or the context otherwise requires, the terms “we,” “our,” “us” and the “Company” refer to Software and its consolidated subsidiaries.

We provide functionality and data analytics that businesses need to manage the complete employment lifecycle, from recruitment to retirement. Our solution requires virtually no customization and is based on a core system of record maintained in a single database for all HCM functions, including payroll, talent acquisition, talent management, human resources (“HR”) management and time and labor management applications.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Our significant accounting policies are discussed in Note 2 “Summary of Significant Accounting Policies” in the notes to our audited consolidated financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2024 (the “Form 10-K”) filed with the Securities and Exchange Commission (“SEC”) on February 20, 2025.

Basis of Presentation

The accompanying unaudited interim consolidated financial statements include the financial results of Software and its wholly owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the SEC regarding interim financial statements that permit reduced disclosure for interim periods. Intercompany balances and transactions have been eliminated in consolidation. In the opinion of management, the accompanying unaudited consolidated financial statements include all adjustments necessary for the fair presentation of our results for the interim periods presented. These unaudited consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and related notes presented in the Form 10-K. The results of operations for the three and nine months ended September 30, 2025 are not necessarily indicative of the results expected for the full year.

In 2024, the Office of the Comptroller of the Currency (the “OCC”) issued final approval to Paycom National Trust Bank, National Association (the “Paycom National Trust Bank”), our wholly owned subsidiary, to operate as a national trust bank pursuant to the National Bank Act and relevant OCC regulations. Paycom National Trust Bank is the primary trustee of Paycom Client Trust, our grantor trust (the “Client Trust”), which now holds substantially all client payroll and related funds and is responsible for the oversight and management of those client funds. We have determined that the Client Trust is a variable interest entity that meets the criteria established for consolidation in accordance with Accounting Standards Codification (“ASC”) 810, “Consolidation”. We are the sole beneficial owner of the Client Trust, and we have the power to direct its activities and a controlling financial interest in its economic performance.

For the year ended December 31, 2024, we changed the presentation of revenues on the consolidated statements of comprehensive income to disaggregate interest on funds held for clients and combine recurring and other revenues. Prior period amounts have been reclassified to conform to this presentation. Reclassifications for the presentation of revenue did not have a material impact on previously reported amounts or change total revenues.

In the fourth quarter of 2024, we adopted the presentation of dollar amounts in millions, except amounts per share. As a result, amounts presented for prior periods may differ immaterially from those reported in previous filings and some amounts may not sum due to rounding. All percentages have been calculated using unrounded amounts.

Recently Adopted Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). ASU 2023-07 expands reportable segment disclosure requirements for public business entities by requiring disclosures of significant reportable segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within each reported measure of segment’s profit or loss. The ASU is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. We adopted this ASU retrospectively on December 31, 2024. See Note 14 “Segment Reporting” for further information.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant

Paycom Software, Inc.

Notes to the Unaudited Consolidated Financial Statements

(tabular dollars and shares in millions, except per share and per unit amounts)

estimates include income taxes, loss contingencies, the useful lives of property and equipment and intangible assets, the life of our client relationships, the fair value of our stock-based awards and the fair value of our financial instruments, intangible assets and goodwill. These estimates are based on historical experience, where applicable, and other assumptions that management believes are reasonable under the circumstances. Actual results could materially differ from these estimates.

In the third quarter of 2025, we completed an assessment of the useful lives of our servers and network equipment. Based on this assessment, we increased the estimated useful lives of these assets from three years to six years, effective as of the beginning of the third quarter of 2025. This change in accounting estimate has been applied prospectively and resulted in an immaterial decrease to depreciation and amortization expense for the three and nine months ended September 30, 2025. Further, we expect an immaterial decrease to depreciation and amortization expense related to the change in estimated useful lives for the full year.

Seasonality

Our revenues are seasonal in nature. Generally, we expect our first and fourth quarter recurring revenues to be higher than other quarters during the year because payroll tax filing forms and Affordable Care Act (“ACA”) forms are typically processed in the first quarter, and unscheduled payroll runs (such as bonuses) for our clients are typically concentrated in the fourth quarter. In addition, these seasonal fluctuations in recurring revenues impact operating income. Historical results impacted by these seasonal trends should not be considered a reliable indicator of our future results of operations.

Segment Information

We operate in a single operating segment and a single reporting segment. Operating segments are defined as components of an enterprise about which separate financial information is regularly evaluated by the CODM function (which is fulfilled by our Chief Executive Officer) in deciding how to allocate resources and in assessing performance. Our Chief Executive Officer allocates resources and assesses performance based upon financial information at the consolidated level. See Note 14 “Segment Reporting” for additional information.

Funds Held for Clients and Client Funds Obligation

As part of our payroll and payroll tax filing services, we collect funds from our clients for employment taxes and payroll obligations, which we remit to the appropriate tax agencies and accounts designated by our clients. We typically invest these funds and earn interest income during the period between receipt and disbursement of such funds.

These investments are shown in our consolidated balance sheets as funds held for clients, and the associated liability for the tax filings is shown as client funds obligation. The liability is recorded in the accompanying consolidated balance sheets at the time we obtain the funds from clients. The client funds obligation represents liabilities that will be repaid within one year of the consolidated balance sheet date. We typically invest funds held for clients in money market funds, demand deposit accounts, certificates of deposit, commercial paper and U.S. treasury securities. Short-term investments in instruments with an original maturity of less than three months are classified as cash and cash equivalents within funds held for clients in the consolidated balance sheets. Investments in instruments with an original maturity greater than three months are classified as available-for-sale securities and are also included within funds held for clients in the consolidated balance sheets. These available-for-sale securities are recorded at fair value, with the difference between the amortized cost and fair value of these available-for-sale securities recorded as unrealized net gains (losses) on available-for-sale securities, and are included within comprehensive earnings (loss) in the consolidated statements of comprehensive income.

Funds held for clients are classified as a current asset in the consolidated balance sheets because the funds are held solely to satisfy the client funds obligation. Additionally, the funds held for clients is classified as restricted cash and restricted cash equivalents and presented within the reconciliation of cash, cash equivalents, restricted cash and restricted cash equivalents on the consolidated statements of cash flows.

We report the cash flows related to the purchases of investments from funds held for clients and related to the proceeds from the maturities of investments from funds held for clients on a gross basis in the cash flows from investing activities section of the consolidated statements of cash flows. Additionally, we report cash flows related to cash received from and paid on behalf of clients on a net basis within net change in client funds obligation in the cash flows from financing activities section of the consolidated statements of cash flows.

Stock Repurchase Plan

In May 2016, our Board of Directors authorized a stock repurchase plan allowing for the repurchase of shares of our common stock in open market transactions at prevailing market prices, in privately negotiated transactions or by other means in accordance with federal securities laws, including Rule 10b5-1 programs. Since the initial authorization of the stock repurchase

Paycom Software, Inc.

Notes to the Unaudited Consolidated Financial Statements

(tabular dollars and shares in millions, except per share and per unit amounts)

plan, our Board of Directors has amended and extended and authorized new stock repurchase plans from time to time. Most recently, in July 2024, our Board of Directors authorized the repurchase of up to $1.5 billion of our common stock. As of September 30, 2025, there was $1.22 billion available for repurchases under our stock repurchase plan. Our stock repurchase plan may be suspended or discontinued at any time. The actual timing, number and value of shares repurchased depends on a number of factors, including the market price of our common stock, general market and economic conditions, shares withheld for taxes associated with the vesting of equity incentive awards and other corporate considerations. The current stock repurchase plan will expire on August 15, 2026.

During the nine months ended September 30, 2025, we repurchased an aggregate of 1,176,494 shares of our common stock at an average cost of $222.05 per share, including 172,642 shares withheld to satisfy tax withholding obligations for certain employees upon the vesting of equity incentive awards.

Recently Issued Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”). ASU 2023-09 requires disaggregated information about a reporting entity’s effective tax rate reconciliation, as well as information on income taxes paid. This ASU is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The guidance allows for adoption using either a prospective or retrospective transition method. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and disclosures.

In November 2024, the FASB issued ASU No. 2024-03, “Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses” (“ASU 2024-03”). ASU 2024-03 requires public businesses disclose additional information about specific expense categories in the notes to the financial statements. This ASU is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. Upon adoption, the guidance should be applied retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and disclosures.

REVENUE RECOGNITION

Revenues are recognized when control of the promised goods or services is transferred to our clients in an amount that reflects the consideration we expect to be entitled to for those goods or services. Substantially all of our revenues are derived from contracts with clients. Sales and other applicable taxes are excluded from revenues.

Recurring and Other Revenues

Recurring revenues are derived primarily from our payroll, talent acquisition, talent management, HR management and time and labor management applications, fees charged for form ﬁlings and delivery of client payroll checks and reports, and revenues associated with background checks and income and employment verification services. Payroll includes Beti®, Payroll and Payroll Tax Management, Vault, Everyday®, Paycom Pay®, Client Action Center, Expense Management, Garnishment Administration and GL Concierge applications. Talent acquisition includes our Applicant Tracking, Enhanced Background Checks®, Onboarding, E-Verify® and Tax Credits applications. Talent management includes our Employee Self-Service®, Compensation Budgeting, Performance Management, Position Management and Paycom Learning applications. HR management includes our Manager on-the-Go®, Direct Data Exchange®, Ask Here, Documents and Checklists, Government and Compliance, Beneﬁts Administration, COBRA Administration, Personnel Action Forms and Performance Discussion Forms, Paycom Surveys, Enhanced ACA and Clue® applications. Time and labor management includes Time and Attendance, Scheduling, Time-Off Requests featuring GONE®, and Labor Allocation applications. In addition, with Global HCM™, a number of our HCM applications and tools are available in 15 languages and dialects and are accessible to users in more than 190 countries. Enhancing the value of our comprehensive product suite is IWant™, our industry-first command driven AI engine empowering users to navigate and access their information within our unified database.

We consider our commitment in our customer contracts to be a series of distinct services that together constitute a single performance obligation that is generally satisfied over time and recognized during each client’s payroll period. The agreed-upon fee is variable consideration that is determined by client usage, billed and collected as part of our processing of the client’s payroll. The client’s use of our applications routinely fluctuates based upon factors that include the number of payrolls run and changes in the client’s employee population. These usage-based fluctuations do not change our core performance obligation to stand ready to provide the customer with services for the remainder of the contractual term. Collectability is reasonably assured as the fees are generally collected through an automated clearing house as part of the client’s payroll cycle or through direct wire transfer, which minimizes the default risk.

Paycom Software, Inc.

Notes to the Unaudited Consolidated Financial Statements

(tabular dollars and shares in millions, except per share and per unit amounts)

The contract period for the majority of contracts associated with these revenues is one month due to the fact that both we and the client typically have the unilateral right to terminate a wholly unperformed contract without compensating the other party by providing 30 days’ notice of termination. We consider the total price charged to a client in a given period to be indicative of the standalone selling price, as the total amount charged is within a reasonable range of prices typically charged for our goods and services for comparable classes of client groups, which we periodically assess for price adjustments. Because the variable consideration in our client contracts is allocated entirely to a wholly unsatisfied promise to transfer a series of distinct services forming a single performance obligation, we are not required to disclose the value of unsatisfied performance obligations.

Other revenues consist of nonrefundable implementation fees, which are charged upfront to new clients to offset the expense of new client set-up as well as revenues from the sale of time clocks as part of our time and attendance application. Although these revenues are related to our recurring revenues, they represent distinct performance obligations. The nonrefundable upfront fee charged to our clients results in an implied performance obligation in the form of a material right to the client related to the client’s option to renew at the end of the contract period. The nonrefundable upfront fee is typically collected upon contract inception and is deferred and recognized ratably over the period that our client realizes the benefits from the material right (i.e., 10-year estimated client life). We conduct an annual analysis of client retention data to support our client life estimate. A change in our client life estimate could have a material impact on the timing and amounts recognized as revenue for nonrefundable upfront fees.

Revenues from the sale of time clocks are recognized when control is transferred to the client upon delivery of the product. We estimate the standalone selling price for the time clocks by maximizing the use of observable inputs such as our specific pricing practices for time clocks.

For additional information, see Note 14 “Segment Reporting”.

Interest on Funds Held for Clients

Interest income on funds held for clients is earned on funds that are collected from clients in advance of either the applicable due date for payroll tax submissions or the applicable disbursement date for employee payment services. The interest earned on these funds is included in revenues in the consolidated statements of comprehensive income as the collection, holding, and remittance of these funds are essential components of providing these services.

Contract Balances

The timing of revenue recognition for recurring services is consistent with the invoicing of clients as they both occur during the respective client payroll period for which the services are provided. Therefore, we generally do not recognize a contract asset or liability resulting from the timing of revenue recognition and invoicing.

Changes in deferred revenue for the three and nine months ended September 30, 2025 and 2024 were as follows:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
Balance, beginning of period	$	149.7		$	142.4		$	144.6		$	130.5
Recognition of revenue included in beginning of period balance		(11.1	)		(11.6	)		(32.5	)		(27.6	)
Contract balance, net of revenue recognized during the period		12.5			11.5			39.0			39.4
Balance, end of period	$	151.1		$	142.3		$	151.1		$	142.3

We expect to recognize $10.5 million of deferred revenue in the remainder of 2025, $26.2 million in 2026, and $114.4 million thereafter.

Paycom Software, Inc.

Notes to the Unaudited Consolidated Financial Statements

(tabular dollars and shares in millions, except per share and per unit amounts)

Assets Recognized from the Costs to Obtain and Costs to Fulfill Revenue Contracts

We recognize an asset for the incremental costs of obtaining a contract with a client if we expect the amortization period to be longer than one year. We also recognize an asset for the costs to fulfill a contract with a client if such costs are specifically identifiable, generate or enhance resources used to satisfy future performance obligations, and are expected to be recovered. We have determined that substantially all costs related to implementation activities are administrative in nature and also meet the capitalization criteria under ASC 340-40, “Other Assets and Deferred Costs”. These capitalized costs to fulfill principally relate to upfront direct costs that are expected to be recovered through margin and that enhance our ability to satisfy future performance obligations. The assets related to both costs to obtain, and costs to fulfill, contracts with clients are accounted for utilizing a portfolio approach and are capitalized and amortized ratably over the expected period of benefit, which we have determined to be the estimated life of the client relationship of 10 years, primarily because we incur no new costs to obtain, or costs to fulfill, a contract upon renewal. A change in our client life estimate could have a material impact on the timing and amounts recognized as amortization expense.

Additional commission costs may be incurred when an existing client purchases additional applications; however, these commission costs relate solely to the additional applications purchased and are not related to contract renewal. Furthermore, additional fulfillment costs associated with existing clients purchasing additional applications are minimized by our seamless single-database platform.

The assets related to both costs to obtain, and costs to fulfill, contracts with customers are presented as deferred contract costs in the accompanying consolidated balance sheets. Amortization expense related to costs to obtain and costs to fulfill a contract is included in sales and marketing expenses and general and administrative expenses in the accompanying consolidated statements of comprehensive income. We regularly review our assets recognized from the costs to obtain and costs to fulfill client contracts for potential impairment and did not recognize an impairment loss during the nine months ended September 30, 2025 or 2024.

The following tables present the asset balances and related amortization expense for these contract costs:


	As of and for the Three Months Ended September 30, 2025
	Beginning		Capitalization					Ending
	Balance		of Costs		Amortization			Balance
Costs to obtain a contract	$	444.7	$	28.3	$	(18.5	)	$	454.5
Costs to fulfill a contract	$	527.7	$	30.8	$	(20.1	)	$	538.4

	As of and for the Three Months Ended September 30, 2024
	Beginning		Capitalization					Ending
	Balance		of Costs		Amortization			Balance
Costs to obtain a contract	$	397.0	$	27.2	$	(16.2	)	$	407.9
Costs to fulfill a contract	$	459.7	$	36.8	$	(16.8	)	$	479.7


	As of and for the Nine Months Ended September 30, 2025
	Beginning		Capitalization					Ending
	Balance		of Costs		Amortization			Balance
Costs to obtain a contract	$	425.7	$	83.0	$	(54.2	)	$	454.5
Costs to fulfill a contract	$	498.3	$	98.1	$	(58.0	)	$	538.4

	As of and for the Nine Months Ended September 30, 2024
	Beginning		Capitalization					Ending
	Balance		of Costs		Amortization			Balance
Costs to obtain a contract	$	378.5	$	76.9	$	(47.4	)	$	407.9
Costs to fulfill a contract	$	420.0	$	107.7	$	(48.0	)	$	479.7

Paycom Software, Inc.

Notes to the Unaudited Consolidated Financial Statements

(tabular dollars and shares in millions, except per share and per unit amounts)

PROPERTY AND EQUIPMENT

Property and equipment and accumulated depreciation and amortization were as follows:


	September 30, 2025			December 31, 2024
Property and equipment
Software and capitalized software development costs	$	628.7		$	497.2
Buildings		300.1			275.6
Computer equipment		275.5			203.2
Rental clocks		51.5			48.0
Furniture, fixtures and equipment		42.8			41.9
Other		20.9			20.7
		1,319.5			1,086.6
Less: accumulated depreciation and amortization		(697.4	)		(576.4	)
		622.1			510.2
Construction in progress		1.2			14.7
Land		36.5			36.5
Property and equipment, net	$	659.8		$	561.4

We capitalize software development costs related to software developed or obtained for internal use in accordance with ASC 350-40, “Other Assets and Deferred Costs”. For the three and nine months ended September 30, 2025, we capitalized $43.5 million and $114.2 million, respectively, of software development costs related to software developed or obtained for internal use. For the three and nine months ended September 30, 2024, we capitalized $33.4 million and $94.4 million, respectively, of software development costs related to software developed or obtained for internal use.

Rental clocks included in property and equipment, net in the consolidated balance sheets, represent time clocks issued to clients under month-to-month operating leases. As such, these items are transferred from inventory to property and equipment and depreciated over their estimated useful lives.

Prior to the repayment of our debt on November 21, 2023, we capitalized interest costs incurred for indebtedness related to construction in progress. For the three and nine months ended September 30, 2025, we incurred interest costs of $1.1 million and $2.7 million, respectively, none of which was capitalized. For the three and nine months ended September 30, 2024, we incurred interest costs of $0.8 million and $2.4 million, respectively, none of which was capitalized.

Depreciation and amortization expense for property and equipment was $41.5 million and $121.5 million for the three and nine months ended September 30, 2025, respectively. Depreciation and amortization expense for property and equipment was $37.1 million and $103.2 million for the three and nine months ended September 30, 2024, respectively.

GOODWILL AND INTANGIBLE ASSETS, NET

As of both September 30, 2025 and December 31, 2024, goodwill was $51.9 million. We have selected June 30 as our annual goodwill impairment testing date. We performed a qualitative impairment test of our goodwill and concluded that, as of June 30, 2025, it was more likely than not that the fair value exceeded the carrying value and, therefore, goodwill was not impaired. As of September 30, 2025 and December 31, 2024, there were no indicators of impairment.

In June 2021, in connection with our marketing initiatives, we purchased the naming rights to the downtown Oklahoma City arena that is currently home to the Oklahoma City Thunder National Basketball Association franchise. Under the terms of the naming rights agreement, we committed to make escalating annual sponsorship fee payments from 2021 to 2035. In July 2025, the naming rights agreement was amended to provide, among other things, that the agreement and our obligation to make the previously disclosed annual sponsorship fee payments thereunder will terminate on the earlier of (i) September 30, 2028 or (ii) the date of the last event hosted or presented at the current arena (subject to earlier termination in certain limited circumstances), with a reduction in the sponsorship fee if the term of the agreement ends prior to September 30, 2028 and in certain other limited circumstances. The amendment did not otherwise impact our obligation to make the previously disclosed annual sponsorship fee payments for the remainder of the amended agreement term. The cost of the naming rights has been recorded as an intangible asset with an offsetting liability as of the date of the contract. The intangible asset is being amortized over the remainder of the agreement term on a straight-line basis. The difference between the present value of the offsetting liability and actual cash payments is being relieved through sales and marketing expense using the effective interest method over the remainder of the agreement term.

Paycom Software, Inc.

Notes to the Unaudited Consolidated Financial Statements

(tabular dollars and shares in millions, except per share and per unit amounts)

As a result of the amendment to the naming rights agreement, the Company recognized a $35.6 million gain with respect to the released portion of the liability. The gain is included in other income (expense), net in the consolidated statements of comprehensive income.

All of our intangible assets other than goodwill are considered to have definite lives and, as such, are subject to amortization. The following tables present the components of intangible assets within our consolidated balance sheets:


	September 30, 2025
	Weighted Average Remaining Useful Life	Gross		Accumulated Amortization			Net
	(Years)
Intangibles:
Naming rights	3.0	$	60.2	$	(19.3	)	$	40.9
Total		$	60.2	$	(19.3	)	$	40.9


	December 31, 2024
	Weighted Average Remaining Useful Life	Gross		Accumulated Amortization			Net
	(Years)
Intangibles:
Naming rights	11.8	$	60.2	$	(14.0	)	$	46.2
Total		$	60.2	$	(14.0	)	$	46.2

Amortization of intangible assets for the three and nine months ended September 30, 2025 was $3.4 million and $5.4. million, respectively. Amortization of intangible assets for the three and nine months ended September 30, 2024 was $1.0 million and $2.9 million, respectively. We estimate the aggregate amortization expense will be $3.4 million for the remainder of 2025, $13.6 million for each of 2026 and 2027, and $10.3 million for 2028.

LONG-TERM DEBT

Paycom Payroll, LLC, Software, and certain other subsidiaries of Software (collectively, the “Loan Parties”) are party to a credit agreement (as amended from time to time, the “Credit Agreement”) with JPMorgan Chase Bank, N.A., as a lender, swingline lender and issuing bank, the lenders from time to time party thereto (collectively with JPMorgan Chase Bank, N.A., the “Lenders”), and JPMorgan Chase Bank, N.A., as the administrative agent.

The Credit Agreement provides for a senior secured revolving credit facility (the “Revolving Credit Facility”) in the aggregate principal amount of up to $1.0 billion, and the ability to request an incremental facility of up to an additional $500.0 million, subject to obtaining additional lender commitments and certain approvals and satisfying certain other conditions. The Credit Agreement includes a $25.0 million sublimit for swingline loans and a $6.5 million sublimit for letters of credit. All loans under the Credit Agreement will mature on July 29, 2027 (the “Scheduled Maturity Date”). Unamortized debt issuance costs of $1.7 million as of September 30, 2025 are included in other assets on our consolidated balance sheets.

As of September 30, 2025, there was no debt outstanding under the Revolving Credit Facility.

Subject to certain conditions set forth in the Credit Agreement, we may borrow, prepay and reborrow under the Revolving Credit Facility and terminate or reduce the Lenders’ commitments at any time prior to the Scheduled Maturity Date. We are required to pay a quarterly commitment fee on the daily amount of the undrawn portion of the revolving commitments under the Revolving Credit Facility at a rate per annum of (i) 0.20% if the Company’s consolidated leverage ratio is less than 1.0 to 1.0; (ii) 0.225% if the Company’s consolidated leverage ratio is greater than or equal to 1.0 to 1.0 but less than 2.0 to 1.0; (iii) 0.25% if the Company’s consolidated leverage ratio is greater than or equal to 2.0 to 1.0 but less than 3.0 to 1.0; or (iv) 0.275% if the Company’s consolidated leverage ratio is greater than or equal to 3.0 to 1.0.

Under the Credit Agreement, we are required to maintain as of the end of each fiscal quarter a consolidated interest coverage ratio of not less than 3.0 to 1.0 and a consolidated leverage ratio of not greater than 3.25 to 1.0, stepping down to 3.0 to 1.0 as of December 31, 2025 and thereafter. Additionally, the Credit Agreement contains customary affirmative and negative covenants, including covenants limiting our ability to, among other things, grant liens, incur debt, effect certain mergers, make investments, dispose of assets, enter into certain transactions, including swap agreements and sale and leaseback transactions, pay dividends or distributions on our capital stock, and enter into transactions with affiliates, in each case subject to customary

Paycom Software, Inc.

Notes to the Unaudited Consolidated Financial Statements

(tabular dollars and shares in millions, except per share and per unit amounts)

exceptions. As of September 30, 2025, we were in compliance with these covenants. Our obligations under the Credit Agreement are secured by a senior security interest in all personal property of the Loan Parties.

CORPORATE INVESTMENTS AND FUNDS HELD FOR CLIENTS

The tables below present our cash and cash equivalents, the funds held for clients cash and cash equivalents as well as the investments that were included within funds held for clients on the consolidated balance sheets:


	September 30, 2025
Type of issue	Amortized cost		Gross unrealized gains		Gross unrealized losses			Fair value
Cash and cash equivalents	$	375.0	$	—	$	—		$	375.0
Funds held for clients cash and cash equivalents		1,323.2		—		—			1,323.2
Available-for-sale securities(1):
U.S. treasury securities		496.0		0.7		—			496.7
Total investments	$	2,194.2	$	0.7	$	—		$	2,194.9


	December 31, 2024
Type of issue	Amortized cost		Gross unrealized gains		Gross unrealized losses			Fair value
Cash and cash equivalents	$	402.0	$	—	$	—		$	402.0
Funds held for clients cash and cash equivalents		3,640.8		—		—			3,640.8
Available-for-sale securities(1):
U.S. treasury securities		24.9		—		(0.2	)		24.7
Total investments	$	4,067.7	$	—	$	(0.2	)	$	4,067.5

(1)

All available-for-sale securities were included within the funds held for clients.

The unrealized losses and fair values of available-for-sale securities that have been in an unrealized loss position for a period of less than and greater than 12 months as of September 30, 2025, are as follows:


	September 30, 2025
	Securities in unrealized loss position for less than 12 months				Securities in unrealized loss position for greater than 12 months				Total
Type of issue	Gross unrealized losses		Fair value		Gross unrealized losses		Fair value		Gross unrealized losses		Fair value
U.S. treasury securities	$	—	$	24.9	$	—	$	—	$	—	$	24.9
Total	$	—	$	24.9	$	—	$	—	$	—	$	24.9

The unrealized losses and fair values of available-for-sale securities that have been in an unrealized loss position for a period of less than and greater than 12 months as of December 31, 2024, are as follows:


	December 31, 2024
	Securities in unrealized loss position for less than 12 months					Securities in unrealized loss position for greater than 12 months				Total
Type of issue	Gross unrealized losses			Fair value		Gross unrealized losses		Fair value		Gross unrealized losses			Fair value
U.S. treasury securities	$	(0.2	)	$	24.7	$	—	$	—	$	(0.2	)	$	24.7
Total	$	(0.2	)	$	24.7	$	—	$	—	$	(0.2	)	$	24.7

We did not make any reclassification adjustments out of accumulated other comprehensive income for realized gains or losses on the sale or maturity of available-for-sale securities for the nine months ended September 30, 2025 or 2024. There were no realized gains or losses on the sale of available-for-sale securities for the nine months ended September 30, 2025 or 2024.

We regularly review the composition of our investment portfolio and did not recognize any credit impairment losses during the nine months ended September 30, 2025 or 2024. We believe it is probable that the principal and interest will be

Paycom Software, Inc.

Notes to the Unaudited Consolidated Financial Statements

(tabular dollars and shares in millions, except per share and per unit amounts)

collected in accordance with contractual terms and that the unrealized losses on these securities were due to changes in interest rates and were not due to increased credit risk. As of September 30, 2025, our U.S. treasury securities held a rating of AA+.

Expected maturities of available-for-sale securities at September 30, 2025 are as follows:


Expected maturity	Amortized cost		Fair value
One year or less	$	454.2	$	454.5
One year to five years		41.8		42.2
Total available-for-sale securities	$	496.0	$	496.7

FAIR VALUE OF FINANCIAL INSTRUMENTS

Our financial instruments consist primarily of cash and cash equivalents, accounts receivable, accounts payable, funds held for clients and client funds obligation. The carrying amount of cash and cash equivalents, accounts receivable, accounts payable, funds held for clients and client funds obligation approximates fair value.

Our corporate investments consist primarily of money market funds and demand deposit accounts and are classified as cash and cash equivalents on the consolidated balance sheets.

As discussed in Note 2 “Summary of Significant Accounting Policies”, we typically invest the funds held for clients in money market funds, demand deposit accounts, certificates of deposit, commercial paper and U.S. treasury securities. Short-term investments in instruments with an original maturity of less than three months are classified as cash and cash equivalents within funds held for clients in the consolidated balance sheets. Investments in instruments with an original maturity greater than three months are classified as available-for-sale securities and are also included within funds held for clients in the consolidated balance sheets. These available-for-sale securities are recognized at fair value, with the difference between the amortized cost and fair value of these available-for-sale securities recorded as unrealized net gains (losses) within comprehensive earnings (loss) in our consolidated statements of comprehensive income. See Note 7 “Corporate Investments and Funds Held for Clients” for additional information.

The accounting standard for fair value measurements establishes a three-level fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

•

Level 1 – Observable inputs such as quoted prices in active markets

•

Level 2 – Inputs other than quoted prices in active markets for identical assets or liabilities that are observable either directly or indirectly or quoted prices that are not active

•

Level 3 – Unobservable inputs in which there is little or no market data

Included in the following tables are the Company’s major categories of assets and liabilities measured at fair value on a recurring basis as of September 30, 2025 and December 31, 2024:


	September 30, 2025
	Level 1		Level 2		Level 3		Total
Assets:
U.S. treasury securities	$	—	$	496.7	$	—	$	496.7


	December 31, 2024
	Level 1		Level 2		Level 3		Total
Assets:
U.S. treasury securities	$	—	$	24.7	$	—	$	24.7

EMPLOYEE SAVINGS PLAN AND EMPLOYEE STOCK PURCHASE PLAN

Employees over the age of 18 who have completed 30 days of service are eligible to participate in our employee savings plan (401(k) plan). We have made a Qualified Automatic Contribution Arrangement (“QACA”) election, whereby the Company matches the contribution of our employees equal to 100% of the first 1% of salary deferrals and 50% of salary deferrals between 2% and 6%, up to a maximum matching contribution of 3.5% of an employee’s salary each plan year. We are allowed to make additional discretionary matching contributions and discretionary profit sharing contributions. Employees are 100% vested in amounts attributable to salary deferrals and rollover contributions. The QACA matching contributions as well as the

Paycom Software, Inc.

Notes to the Unaudited Consolidated Financial Statements

(tabular dollars and shares in millions, except per share and per unit amounts)

discretionary matching and profit sharing contributions vest 100% after two years of employment from the date of hire. Matching contributions were $5.3 million and $15.7 million for the three and nine months ended September 30, 2025, respectively. Matching contributions were $4.7 million and $14.7 million for the three and nine months ended September 30, 2024, respectively.

The Paycom Software, Inc. Employee Stock Purchase Plan (the “ESPP”) has overlapping offering periods, with each offering period lasting approximately 24 months. At the beginning of each offering period, eligible employees may elect to contribute, through payroll deductions, up to 10% of their compensation, subject to an annual per-employee maximum of $25,000. Eligible employees purchase shares of the Company’s common stock at a price equal to 85% of the fair market value of the shares on the exercise date. The maximum number of shares that may be purchased by a participant during each offering period is 2,000 shares, subject to limits specified by the Internal Revenue Service. The maximum aggregate number of shares of the Company’s common stock that may be purchased by all participants under the ESPP is 2.0 million shares. During the nine months ended September 30, 2025, eligible employees purchased 50,813 shares of common stock under the ESPP, consisting of 35,284 shares purchased in the open market and 15,529 shares issued from treasury stock. During the nine months ended September 30, 2024, eligible employees purchased 74,466 shares of common stock under the ESPP, all of which were purchased in the open market. Compensation expense related to the ESPP is recognized on a straight-line basis over the requisite service period.

10.

EARNINGS PER SHARE

Basic earnings per share is computed by dividing net income by the weighted average number of shares of common stock outstanding for the period. Diluted earnings per share is computed in a similar manner to basic earnings per share after assuming the issuance of shares of common stock for all potentially dilutive equity incentive awards using the treasury stock method.

The following is a reconciliation of net income and the shares of common stock used in the computation of basic and diluted earnings per share:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Numerator:
Net income	$	110.7	$	73.3	$	339.6	$	388.4
Denominator:
Basic weighted average shares outstanding (in thousands)		56,113		55,929		56,068		56,307
Dilutive effect of unvested restricted stock and restricted stock units (in thousands)		314		35		314		58
Diluted weighted average shares outstanding (in thousands)		56,427		55,964		56,382		56,365
Earnings per share:
Basic	$	1.97	$	1.31	$	6.06	$	6.90
Diluted	$	1.96	$	1.31	$	6.02	$	6.89

11.

STOCK-BASED COMPENSATION

The Company recognizes stock-based compensation expense related to awards of (i) restricted stock subject to time-based or no vesting conditions (“Time-Based Restricted Stock Awards”), (ii) restricted stock subject to market-based vesting conditions (“Market-Based Restricted Stock Awards”), (iii) restricted stock units subject to time-based vesting conditions (“RSUs”) and (iv) restricted stock units subject to performance-based vesting conditions (“PSUs”). During the three and nine months ended September 30, 2025, awards were granted pursuant to the Paycom Software, Inc. 2023 Long-Term Incentive Plan.

Paycom Software, Inc.

Notes to the Unaudited Consolidated Financial Statements

(tabular dollars and shares in millions, except per share and per unit amounts)

The following table summarizes restricted stock awards activity for the nine months ended September 30, 2025:


	Time-Based					Market-Based
	Restricted Stock Awards					Restricted Stock Awards
	Shares			Weighted Average Grant Date Fair Value		Shares			Weighted Average Grant Date Fair Value
	(in thousands)			(in dollars)		(in thousands)			(in dollars)
Unvested shares of restricted stock outstanding at December 31, 2024		1,140.3		$	230.10		195.7		$	244.14
Granted		656.7		$	221.42		188.4		$	203.53
Vested		(337.0	)	$	248.49		(159.8	)	$	187.98
Forfeited

Paycom Software, Inc. 10-Q