Paycom Software, Inc. PAYC is set to report first-quarter 2026 results on May 6, after market close.
The Zacks Consensus Estimate for first-quarter earnings is pinned at $2.93 per share, indicating a year-over-year increase of 4.6%. The consensus estimate for the bottom line has remained unchanged over the past 60 days.
The Zacks Consensus Estimate for Paycom Software’s first-quarter revenues is pegged at approximately $567.4 million, suggesting a rise of approximately 7% from the year-ago quarter’s sales of $530.5 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%.
Paycom Software, Inc. Price and EPS Surprise
Paycom Software, Inc. price-eps-surprise | Paycom Software, Inc. Quote
Factors Likely to Influence PAYC’s Q1 Results
Paycom Software’s first-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 $538.2 million, suggesting year-over-year growth of 7.6%.
Paycom Software’s first-quarter results are expected to reflect benefits from the rollout 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 first-quarter overall performance.
Q1 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 #3 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:
AudioEye AEYE is scheduled to report first-quarter 2026 results on May 12. Currently, it has an Earnings ESP of +9.62% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for AudioEye’s first-quarter earnings is pegged at 17 cents per share, indicating a year-over-year increase of 13.3%. Earnings estimates for the quarter have been revised downward by 2 cents over the past 60 days. Shares of AudioEye have plunged 23.5% year to date (YTD).
Match Group MTCH is scheduled to report first-quarter 2026 results on May 5. Currently, it has an Earnings ESP of +3.26% and carries a Zacks Rank #2.
The Zacks Consensus Estimate for Match Group’s first-quarter earnings is pegged at 92 cents per share, suggesting a year-over-year jump of 37.3%. Earnings estimates for the quarter have remained unchanged over the past 60 days. Shares of Match Group have risen 19.8% YTD.
Arista Networks ANET is scheduled to report first-quarter 2026 results on May 5. Currently, it has an Earnings ESP of +2.79% and carries a Zacks Rank #2.
The Zacks Consensus Estimate for Arista Networks’ first-quarter earnings is pegged at 81 cents per share, calling for a year-over-year increase of 24.6%. Earnings estimates for the quarter have remained unchanged over the past 60 days. Shares of Arista Networks have rallied 31.8% YTD.
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Arista Networks, Inc. (ANET): Free Stock Analysis Report
Paycom Software, Inc. (PAYC): Free Stock Analysis Report
Match Group Inc. (MTCH): Free Stock Analysis Report
Audioeye, Inc. (AEYE): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).