(Reuters) – Paycom projected third-quarter revenue in line with market estimates on Tuesday and beat earnings expectations for the April-June period as demand for its human resource and payroll services withstood an uncertain economy.
The results follow a strong report from rival Automatic Data Processing and show a stable labour market is feeding demand for payroll services providers, even as rising interest rates and still-high inflation cloud the industry’s outlook.
Paycom forecast current-quarter revenue between $410 million and $412 million, compared with estimates of $412 million, according to analysts polled by Refinitiv.
It also nudged up both the bottom and top end of its full-year revenue forecast by $2 million to a range of $1.715 billion to $1.717 billion.
“Demand for our differentiated HR and payroll solution continues to increase,” said founder and CEO Chad Richison.
Paycom has in recent years benefited from rising demand for its Beti service, which allows for self-payroll and automation. The company said on Tuesday it was expanding Beti into Canada.
For the quarter to June 30, the company reported revenue of $401.1 million, higher than expectations of $398.1 million. Adjusted profit of $1.62 per share also came in above estimates of $1.59.
Its adjusted gross margin came in at 84%, compared with 84.6% a year ago.
(Reporting by Zaheer Kachwala and Aditya Soni; Editing by Devika Syamnath)
