Paycom

Paycom just turned 27 cents of every sales dollar into pure profit, posting 156 million dollars in net income on 572 million in revenue. Adjusted earnings margins hit 48 percent of sales, one of the strongest readings the company has ever printed. That kind of profitability lets management mail money back to shareholders without breaking a sweat.

Management spent over 1 billion dollars buying back stock this quarter alone, scooping up 8.4 million shares while the price was depressed. They also paid out nearly 18 million in dividends. With recurring revenue making up 95 percent of the top line, the cash keeps rolling in to fuel more buybacks ahead.

Revenue growth slowed to just 7.8 percent this quarter, and full year guidance calls for only 6 to 7 percent growth in 2026. That is a big step down from the double digit pace investors used to expect. The HR software market is crowded, and bigger rivals like ADP and Paychex are not making it any easier.

Cash on the balance sheet dropped from 370 million dollars at year end to just 154 million by March, after the company spent over 1 billion on buybacks. That aggressive return of capital is great for shareholders but leaves less dry powder for acquisitions or surprises. Management is essentially betting the farm on its own stock price recovering.