Paycom Software, Inc. PAYC is set to report second-quarter 2026 results after market close on Aug. 5.
The Zacks Consensus Estimate for second-quarter earnings is pinned at $2.28 per share, indicating a 10.7% year-over-year increase. The consensus estimate for the bottom line has remained unchanged over the past 60 days.
The Zacks Consensus Estimate for Paycom Software’s second-quarter revenues is pegged at approximately $512.3 million, suggesting a rise of 5.9% from the year-ago quarter’s sales of $483.6 million.
Paycom Software’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters while missing once, the average surprise being 5.7%.
Let’s see how things are shaping up for the upcoming quarterly results.
Paycom Software, Inc. Price and EPS Surprise
Paycom Software, Inc. price-eps-surprise | Paycom Software, Inc. Quote
Factors Likely to Have Shaped PAYC’s Q2 Performance
Paycom Software’s second-quarter performance is likely to have benefited from an expanding client base through its sustained focus on enhancing its product portfolio and a high-margin recurring revenue business model. The enhancement of its offerings through artificial intelligence (AI) implementation is likely to have gained new clients, driving the company’s revenues. Our model estimate for PAYC’s recurring revenues is pegged at $485.7 million, suggesting year-over-year growth of 6.7%.
Paycom Software’s second-quarter results are expected to reflect the benefits of the growing adoption of IWant, the company’s new AI command-driven tool that enhances user interaction through voice and text-based navigation. IWant’s command-driven AI engine is expected to increase usage among non-daily users while also delivering better return on investment for its clients. The company’s innovative solutions are likely to have positively impacted the to-be-reported quarter’s performance.
Paycom Software’s focus on adding more functionality to its Beti and GONE solutions, while delivering a seamless employee experience, enables it to attract new customers. Beti reduces administrative burdens, enabling employees to manage their payroll requirements independently, while GONE takes care of time-off requests. Beti reduces payroll processing labor by up to 90% and cuts the time spent correcting payroll errors by up to 85%, improving efficiency and return on investment for clients.
Despite strong product innovation, Paycom Software’s growth is expected to have been negatively impacted by a weaker macroeconomic environment. Geopolitical tensions and economic uncertainty are anticipated to have created near-term revenue headwinds. Layoffs and hiring slowdowns in various industries could have weighed on transaction volumes while reducing the overall demand for payroll services. Together, these factors are expected to have weighed on the company's second-quarter overall performance.
Q2 Earnings Whispers for Paycom Software
Our proven model does not conclusively predict an earnings beat for PAYC this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, that’s not the case here.
Paycom Software currently carries a Zacks Rank #2 and has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Stocks to Consider
Here are a few companies worth considering in the broader Zacks Computer and Technology sector, as our model indicates that these possess the right combination of factors to exceed earnings expectations in their upcoming releases:
SanDisk Corporation SNDK is scheduled to report fourth-quarter fiscal 2026 results on Aug. 5. Currently, it has an Earnings ESP of +4.13% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for SanDisk’s fourth-quarter earnings is pegged at $34.24 per share, indicating a year-over-year surge of 11,707%. Earnings estimates for the quarter have been revised upward by 5.7% over the past 60 days. Shares of SanDisk have soared 457.3% year to date (YTD).
Western Digital Corporation WDC is scheduled to report fourth-quarter fiscal 2026 results on Aug. 5. Currently, it has an Earnings ESP of +3.22% and sports a Zacks Rank #1.
The Zacks Consensus Estimate for Western Digital’s fourth-quarter earnings is pegged at $3.35 per share, calling for a year-over-year increase of 101.8%. Earnings estimates for the quarter have been revised upward by 3 cents in the past 30 days. Shares of Western Digital have surged 217.5% YTD.
MKS Inc. MKSI is scheduled to report second-quarter 2026 results on Aug. 5. Currently, it has an Earnings ESP of +2.64% and carries a Zacks Rank #2.
The Zacks Consensus Estimate for MKS’ second-quarter earnings is pegged at $2.93 per share, calling for a year-over-year jump of 65.5%. Earnings estimates for the quarter have been revised northward by a penny in the past 30 days. Shares of MKS have rallied 83.5% YTD.
Zacks' Research Chief Names "Stock Most Likely to Double"
Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.
This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.
Free: See Our Top Stock And 4 Runners UpPaycom Software, Inc. (PAYC) : Free Stock Analysis Report
Western Digital Corporation (WDC) : Free Stock Analysis Report
Sandisk Corporation (SNDK) : Free Stock Analysis Report
MKS Inc. (MKSI) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
