PAYC · 10-Q · 2026Q3 · Full report

Gross Margin Drivers

Paycom Software, Inc. · 2026-11-05 · Importance 49 · Surprise 32

Third-quarter 2026 total cost of revenues increased 2.1% to $87.2 million, while revenue rose 10.2% to $543.8 million. Nine-month cost of revenues increased 2.4% to $263.6 million against 9.3% revenue growth. Cost-of-revenue operating expenses decreased $1.4 million in the quarter and $8.7 million over nine months, principally because employee-related expenses declined $4.7 million and $17.4 million, respectively, due to lower headcount. Depreciation and amortization rose $3.3 million in the quarter and $14.7 million over nine months, primarily from additional technology development and fixed-asset purchases.