Paycom

Paycom just posted 531 million dollars in revenue, up almost 10 percent from a year ago, and came in ahead of what management had promised. Profit jumped to 107 million dollars, or 20 cents of every sales dollar. Results were strong enough that management raised its outlook for the rest of the year to 2.2 billion dollars in revenue.

About 95 percent of Paycom's money is recurring, meaning 505 million dollars of the quarter came from customers who pay again automatically. That steady stream funded 346 million dollars of stock buybacks and nearly 18 million dollars in dividends this quarter alone. Cash profits hit 235 million dollars, which is 44 cents of every sales dollar.

Growth is now stuck in single digits. Full year guidance calls for just 7 to 8 percent revenue growth, a long way from the 20 percent plus pace this company used to deliver. Payroll software is a crowded field, and giants like ADP and Paychex are fighting for the same customers.

Cash on the balance sheet fell from 370 million dollars at year end to 198 million by June, largely because of heavy buybacks. That leaves a thinner cushion if the job market softens or an acquisition opportunity shows up. Paycom's revenue also rises and falls with how many people its clients employ, so a hiring slowdown hits the top line directly.