PAYC · 10-Q · 2026Q3 · Full report

Operating Expense Trends

Paycom Software, Inc. · 2026-11-05 · Importance 36 · Surprise 40 · From source text

Third-quarter 2026 sales and marketing expense decreased 14.1% year over year to $108.0 million, primarily reflecting $15.6 million less marketing and advertising expense and $3.4 million less employee-related expense. Nine-month sales and marketing expense declined 2.3% to $344.4 million, including decreases of $5.7 million in employee-related expense and $3.9 million in marketing and advertising. Research and development expense fell 48.1% to $38.5 million in the quarter and 28.4% to $151.1 million over nine months, primarily because of lower employee-related expenses from reduced headcount; capitalized R&D also fell 60% and 49%, respectively. General and administrative expense increased 22.6% to $88.2 million in the quarter and 12.9% to $234.8 million over nine months, including an $11.0 million legal-settlement charge; quarterly increases also included $3.9 million in employee-related costs and $3.0 million in technology and communications expense.

Key facts

• Paycom’s total operating expenses were $348.0 million for the three months ended September 30, 2026, down 8.6%, and $1,072.3 million for the nine months, down 2.3%. source
• Paycom’s general and administrative expenses increased $16.2 million in the three months ended September 30, 2026, including an $11.0 million legal settlement charge, a $3.9 million increase in employee-related expenses, and a $3.0 million increase in technology and communications expenses. source
• Paycom’s general and administrative expenses increased $26.9 million in the nine months ended September 30, 2026, including an $11.0 million legal settlement charge, a $9.0 million increase in technology and communications expenses, and a $4.0 million increase in professional fees. source
• Paycom’s sales and marketing expenses decreased $17.7 million in the three months ended September 30, 2026, including a $15.6 million decrease in marketing and advertising and a $3.4 million decrease in employee-related expenses. source
• For the nine months ended September 30, 2026, Paycom’s cost-of-revenues operating expenses decreased $8.7 million, primarily because employee-related expenses fell $17.4 million due to lower headcount, partly offset by $4.1 million higher banking-related fees and $1.1 million higher shipping and supplies fees. source
• Paycom’s cost-of-revenues depreciation and amortization expense increased $14.7 million in the nine months ended September 30, 2026, primarily due to additional technology development and fixed-asset purchases, partly offset by the immaterial impact of longer estimated useful lives for servers and network equipment implemented at the beginning of the third quarter of 2025. source
• Paycom’s sales and marketing expenses decreased $8.2 million in the nine months ended September 30, 2026, including a $5.7 million decrease in employee-related expenses and a $3.9 million decrease in marketing and advertising expenses. source
• For the three months ended September 30, 2026, Paycom’s cost-of-revenues operating expenses decreased $1.4 million, primarily because employee-related expenses fell $4.7 million due to lower headcount, partly offset by $2.1 million higher banking-related fees. source

Impact estimates