• Salesforce for Human Resources and Payroll.
• The cloud-native alternative to ADP or Paychex.

• Payroll Services: Comprehensive processing of employee wages, taxes, and deductions, ensuring compliance with regulations.
• Time and Labor Management: Tools for tracking employee work hours, managing schedules, and administering leave requests.
• Talent Acquisition: Solutions for recruiting, applicant tracking, background checks, and streamlined onboarding processes.
• Talent Management: Features supporting performance reviews, goal setting, learning and development, and compensation administration.
• HR Management: Services for benefits administration, maintaining employee data, ensuring compliance, and providing HR analytics.

Paycom Software (PAYC) Customer Information

Paycom Software (PAYC) primarily sells its human capital management (HCM) software solution to other companies, not individuals. These companies utilize Paycom's platform for various HR functionalities including payroll, time and attendance, talent management, benefits administration, and more.

Due to the nature of its Software-as-a-Service (SaaS) business model, Paycom serves a broad and diverse client base across numerous industries. The company does not publicly disclose a list of specific "major customers" by name, as its revenue is diversified among a large number of client businesses rather than concentrated in a few named entities.

However, Paycom's target customer base can be characterized by the following categories of companies:

• Small to Mid-Sized Businesses (SMBs): Historically, Paycom's core focus and strongest market penetration have been with companies typically having between 50 and 5,000 employees. These businesses benefit from Paycom's comprehensive, single-database solution to streamline complex HR processes, improve efficiency, and ensure compliance.
• Companies Across Diverse Industries: Paycom's clients span a wide array of sectors, including retail, healthcare, hospitality, manufacturing, professional services, technology, and more. The need for efficient payroll and HR management is universal, making their solution applicable across various economic segments.
• Growing Enterprises: While traditionally strong in the SMB and mid-market, Paycom is increasingly expanding its reach to larger enterprises. These companies seek robust, scalable HCM solutions to manage their larger workforces, complex regulatory requirements, and multi-state or multi-national operations.

As Paycom's customer base consists of a vast number of private and public companies across various sizes and industries, and no individual customer accounts for a significant portion of its revenue, specific customer company names and symbols are not publicly identifiable or disclosed as "major customers" in the traditional sense.

1. Intense Competition and Market Saturation

Paycom operates in a fiercely competitive human capital management (HCM) software market, facing established industry giants such as Automatic Data Processing (ADP) and Paychex, as well as an increasing number of aggressive new entrants. This intense competition can lead to slowing organic revenue growth and pressure on pricing power due to a lack of significant product differentiation. Some analyses suggest that the total addressable market (TAM) for Paycom may be more saturated than the company's management indicates, making it more challenging to gain further market share. Legacy leaders like ADP have also "retrenched and gone on offense," making the competitive landscape even more challenging.

2. Economic Slowdown and Impact on Employment

Paycom's business model relies heavily on a per-employee billing structure for its payroll and HR services. Consequently, an economic downturn that leads to increased unemployment directly and negatively impacts the company's fundamentals and recurring revenue growth. For example, during the COVID-19 pandemic in 2020, a spike in unemployment significantly reduced Paycom's recurring revenue growth rate due to client headcount reductions. This sensitivity to employment levels makes the company vulnerable to broader economic conditions.

3. Data Security and Compliance Risks

As a provider of human capital management solutions, Paycom handles vast amounts of highly sensitive personal and financial data for its clients and their employees. This makes the company a prime target for cyber-attacks, including data breaches, phishing, and malicious software. A data breach that occurred between May and June 2023, which exposed personal information including driver's license numbers for thousands of individuals, underscores this risk and resulted in a class-action lawsuit alleging unauthorized access to customer accounts and re-routing of direct deposits. Such incidents can lead to significant financial liabilities, reputational damage, loss of customer trust, and increased operational costs for remediation and enhanced security measures.

Paycom Software Inc. (PAYC) operates in the Human Capital Management (HCM) software market, offering a comprehensive suite of cloud-based solutions including payroll processing, talent acquisition, talent management, human resource management, and workforce management systems.

The estimated addressable market for Paycom's main products and services in the United States varies depending on the specific segmentation:

• The total addressable market (TAM) for Paycom's cloud-based Human Capital Management (HCM) software solutions, primarily targeting mid-sized companies and large enterprises, is estimated to be $22.4 billion.
• Management estimates the addressable market for its services, primarily targeting small-to-medium size businesses (SMBs) with 50 to 5,000 employees, to be $24 billion in the U.S., with an anticipated annual growth rate of 9-10%.
• The total addressable market (TAM) for U.S. HCM software is estimated to be around $25 billion, growing at approximately 10% to 12% annually.

For the broader payroll and HCM industry, the market is estimated to be $70 billion, comprised of a $50 billion payroll market and a $20 billion HCM market. The U.S. payroll services market alone is expected to reach $8.44 billion in 2025 and grow to $11.06 billion by 2030.

Paycom Software (PAYC) is expected to drive future revenue growth over the next 2-3 years through several key strategies:

1. Continued Product Innovation and Automation: Paycom is heavily investing in and expanding its suite of automated, AI-driven solutions such as "Beti" and "IWant." These products aim to enhance efficiency, reduce manual tasks, and improve overall client experience, thereby driving adoption and sales. Beti, the payroll solution, is noted for significantly reducing payroll processing labor and error correction time, while the AI-powered "IWant" is transforming how clients engage with HR and payroll data, leading to increased client engagement and expanded sales pipelines.

2. New Client Acquisition and Market Share Expansion: The company continues to prioritize acquiring new clients and increasing its market share. This includes further penetration into the small to mid-sized business market, as well as a strategic shift towards targeting larger enterprises. Efforts in sales execution and streamlined sales processes are aimed at winning new "logos" (clients) across various market segments.

3. International Expansion: Paycom is actively pursuing growth opportunities through international expansion. Recent efforts include investments in this area and the launch of "Global HCM" with native payroll processing capabilities in countries like Mexico and Canada, indicating a strategic push to broaden its geographical footprint.

4. Cross-selling and Upselling Additional Modules: With its comprehensive, cloud-based human capital management (HCM) platform, Paycom aims to drive revenue by cross-selling and upselling additional software modules to its existing client base. The introduction of new, innovative products and enhanced automation capabilities is expected to increase "product attach rates" and enable clients to derive more value, leading to the adoption of more services.

5. Enhanced Client Retention through Operational Efficiencies: By providing high-ROI solutions and improving operational efficiencies through automation, Paycom aims to significantly boost client satisfaction and retention. Automation has led to a notable decline in internal support tickets and inbound client call volumes, which are positive indicators for client loyalty. Strong client retention is a critical component of Paycom's recurring revenue model and overall growth.

Capital Allocation Decisions (Last 3-5 Years)

Share Repurchases

• Paycom's board of directors authorized an increase to its stock repurchase plan to $1.5 billion through August 15, 2026, as of July 31, 2024.
• Since July 2023, the company repurchased approximately 2.3 million shares for nearly $413 million. Since the beginning of 2023, Paycom repurchased 4.1 million shares of common stock for $806 million.
• As of October 31, 2025, approximately $1.1 billion remained available under the current buyback authorization.

Capital Expenditures

• Approximately $100 million was invested in AI-focused capital expenditures for Phoenix and Oklahoma City data centers, largely completed by Q3 2025, to support AI initiatives such as iOne.
• Capital expenditures for the expansion of its corporate headquarters commenced in Q4 2021 and continued throughout 2022, with an estimated cost of $70 million to $75 million, with construction expected to be completed in the first half of 2024.
• Paycom anticipates capital expenditures to be in the single digits as a percentage of revenue for the upcoming year (presumably 2026).