Paycom Software, Inc. Segments Disclosure
The Company conducts business as a operating segment, which is based upon the Company’s current organizational and management structure, as well as information used by the to allocate resources. The Company derives revenues from customers by providing a cloud-based HCM solution delivered as Software-as-a-Service. Our payroll application is the foundation of our solution and is based on a core system of record to maintain a single database for all HCM functions. The Company derives revenue primarily in North America and manages the business activities on a consolidated basis. No individual client represents 10% or more of total revenues.
The accounting policies of the segment are the same as those described in Note 2 “Summary of Significant Accounting Policies”. The Company’s CODM is our . The CODM assesses performance for the segment and decides how to allocate resources based on net income, as reported on the consolidated statements of comprehensive income. Net income is used monthly to monitor budget versus actual results. The CODM manages the business using consolidated expense information as well as regularly provided budgeted or forecasted expense information for the single operating segment. The total assets of the segment are reported on the consolidated balance sheets. Significant non-cash items including expenditures for purchases of long-lived assets and non-cash stock-based compensation expense of the segment are reported on the consolidated statements of cash flows.
The Company does not have any intra-entity sales or transfers.
The table below highlights the Company’s revenues, expenses and net income for our single reportable segment, which are consistent with amounts reported on the consolidated statements of comprehensive income for the years ended December 31, 2025, 2024 and 2023.
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Year Ended December 31, |
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2025 |
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2024 |
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2023 |
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Revenues |
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Recurring |
|
$ |
1,912.7 |
|
|
$ |
1,733.9 |
|
|
$ |
1,563.4 |
|
Implementation and other |
|
|
26.0 |
|
|
|
24.4 |
|
|
|
22.3 |
|
Interest on funds held for clients |
|
|
113.0 |
|
|
|
124.9 |
|
|
|
108.0 |
|
Total revenues |
|
|
2,051.7 |
|
|
|
1,883.2 |
|
|
|
1,693.7 |
|
Cost of revenues |
|
|
|
|
|
|
|
|
|
|||
Operating expenses |
|
|
263.0 |
|
|
|
267.4 |
|
|
|
223.7 |
|
Depreciation and amortization |
|
|
82.4 |
|
|
|
67.2 |
|
|
|
52.6 |
|
Total cost of revenues |
|
|
345.4 |
|
|
|
334.6 |
|
|
|
276.3 |
|
Gross profit |
|
|
1,706.3 |
|
|
|
1,548.6 |
|
|
|
1,417.4 |
|
Administrative expenses |
|
|
|
|
|
|
|
|
|
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Sales and marketing |
|
|
482.8 |
|
|
|
434.4 |
|
|
|
417.6 |
|
Research and development |
|
|
283.4 |
|
|
|
242.6 |
|
|
|
199.0 |
|
General and administrative |
|
|
279.0 |
|
|
|
158.6 |
|
|
|
288.1 |
|
Depreciation and amortization |
|
|
93.9 |
|
|
|
78.7 |
|
|
|
61.4 |
|
Total administrative expenses |
|
|
1,139.1 |
|
|
|
914.3 |
|
|
|
966.1 |
|
Total operating expenses |
|
|
1,484.5 |
|
|
|
1,248.9 |
|
|
|
1,242.4 |
|
Operating income |
|
|
567.2 |
|
|
|
634.3 |
|
|
|
451.3 |
|
Interest expense |
|
|
(3.4 |
) |
|
|
(3.4 |
) |
|
|
(1.9 |
) |
Other income, net |
|
|
55.6 |
|
|
|
18.1 |
|
|
|
23.0 |
|
Income before income taxes |
|
|
619.4 |
|
|
|
649.0 |
|
|
|
472.4 |
|
Provision for income taxes |
|
|
166.0 |
|
|
|
147.0 |
|
|
|
131.6 |
|
Net income |
|
$ |
453.4 |
|
|
$ |
502.0 |
|
|
$ |
340.8 |
|
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 19, 2026 | Showing above |
| 2024 | Feb 20, 2025 | |
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.